Erkki Liikanen, the governor of the Bank of Finland, said Friday that the country needed to go beyond efficiency improvements in public services and efforts to extend working lives in order to rebalance public finances.

"Calculations of the long-term trend in public finances carried out at the Bank of Finland reinforce the outcome of the Ministry of Finance's analysis: there is now a pressing need to readjust public finances," Mr Liikanen said at the University of Tampere.

He added that tax increases and expenditure cuts were "probably" unavoidable.

STT