Minister of Finance Riikka Purra (PS) and Prime Minister Petteri Orpo (NCP) talked to reporters ahead of the framework session in Helsinki on Monday, 15 April 2024. The framework session produced three billion euros worth of measures to narrow the deficit in central government budget. (Heikki Saukkomaa – Lehtikuva)

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GOVERNMENT DEBT in Finland increased last year in relative terms more than in any other country in the European Union, reveal statistics published on Monday by Eurostat.

The Finnish central government owed 210.5 billion euros to creditors at the end of last year, a sum that corresponds with 75.8 per cent of gross domestic product. The debt-to-output ratio increased by 2.3 percentage points from the previous year, more than in any other member state.

Along with Finland, the debt-to-output ratio increased in only eight member states – by 1.8 points in Latvia, 1.3 points in Romania, 1.1 points in Estonia, 0.9 points in both Belgium and Luxembourg, 0.5 points in Bulgaria and 0.4 points in Poland. The ratio decreased by 13.4 points in Portugal, 10.8 points in Greece, 8.3 points in Cyprus, 4.8 points in Croatia and 4.0 points in Spain.

The EU as a whole registered a 1.7-point reduction in the debt-to-output ratio, from 83.4 to 81.7 per cent. In the eurozone, the ratio decreased by 2.3 points to 88.6 per cent.

Member states with the largest relative debt burdens at the end of last year were Greece (161.9% of GDP), Italy (137.3%), France (110.6%), Spain (107.7%), Belgium (105.2%) and Portugal (99.1%).

The Finnish government unveiled last week a series of measures to avoid triggering the excessive deficit procedure of the EU. The measures consist of spending cuts worth roughly 1.6 billion euros and tax increases worth roughly 1.6 billion euros.

The procedure can be launched if a member state has or is at risk of breaching the deficit threshold of three per cent of output, or has failed to bring down government from a level exceeding 60 per cent of output at a “satisfactory pace”. Finland and Belgium were last year the only member states that failed to bring down their debt ratio from a level exceeding 60 per cent.

Aleksi Teivainen – HT

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