RAISING the employment rate to the target of 75 per cent will require that approximately 74,000 people join the ranks of the employed in Finland, estimates Sami Pakarinen, the chief economist at the Confederation of Finnish Industries (EK).
“You have to adjust more than a couple of notches to be better on course towards this target,” he commented on Twitter on Sunday.
“You have to keep in mind that the need of 60,000 employed people identified in the government programme to reach an employment rate of 75 per cent was probably based on figures from March. The target is slipping out of reach, because the latest data indicates you’d need 74,000 more employed people.”
Raising the employment rate to at least 75 per cent and the number of employed people by at least 60,000 by 2023 is one of the key objectives of the government of Prime Minister Antti Rinne (SDP).
Tuomas Malinen, an adjunct professor of economics at the University of Helsinki, views that it is no longer a question of whether the government will meet the target but rather of how far short the government will fall of it.
“Short in an upswing and well short in a downswing,” he answered his own question. “As the revenues of pension companies, for example, are falling simultaneously, the sustainability deficit will deteriorate noticeably. What will you do then?”
Run up more debt, views Pakarinen.
“It’s undeniably alarming that no matter how things go, the government will contract more debt at least until 2022. If employment doesn’t increase in accordance with the objective, the contraction of debt will intensify further. The latter is currently looking like the more likely eventuality,” he analysed.
Patrizio Lainá, an economist at the Central Organisation of Finnish Trade Unions (SAK), reminded earlier yesterday that the government is only expecting employment growth to fund 25 per cent of its permanent spending increases of 1.2 billion euros. The rest of the permanent increases are to be funded by re-allocating funds and raising taxes.
“It has been claimed that the government programme is economically founded on an employment rate of 75 per cent,” he said. “Even if the employment rate didn’t increase at all, it’d only mean a deficit increase of 0.1 per cent of GDP.”
The three billion euros set aside for so-called future investments is to be raised by offloading state-owned assets.
Mika Lintilä (Centre), the Minister of Economic Affairs, told Helsingin Sanomat on Saturday that all five ruling parties are ready to make considerable spending cuts if necessary.
Aleksi Teivainen – HT
Source: Uusi Suomi