The cross-party working group on fiscal policy published its report in Parliament on Wednesday. The group sets an average deficit target of around 3 per cent of GDP for 2027–2033, with a more precise goal of 2–2.5 per cent in 2031.
The Ministry of Finance forecasts a general government deficit of 4.5 per cent in 2026. In 2024, the deficit stood at 4.4 per cent. Finland’s debt-to-GDP ratio is projected to rise to 91.6 per cent next year. Under EU rules, the reference level stands at 60 per cent.
The working group calculates that meeting the 2031 target will require fiscal adjustment of €8–11bn over the next parliamentary term. The estimate draws on the ministry’s winter 2025 forecast and will be revised in December 2026.
All parliamentary parties except the Left Alliance committed to the framework.
Ville Valkonen, chair of the working group and an MP for the National Coalition Party, said broad agreement sends a signal. “We have agreed that debt will be turned by 2031. That path is binding. We must move towards it,” he told reporters.
He added that the agreement does not specify measures. Parties will present their own plans before the general election in April next year.
Jani Mäkelä of the Finns Party said the framework reflects external constraints. “The limits come from outside. If not from the EU, then from credit rating agencies,” he said.
Markus Lohi of the Centre Party said the task ahead requires both spending cuts and revenue measures. He urged the current government to review its decision to lower corporate tax to 18 per cent in 2027. “It would be responsible to reassess measures that weaken the revenue base,” he said.
Saara Hyrkkö of the Greens warned against poorly timed reductions. “Misallocated and mistimed cuts risk costing Finland,” she said. She called on the present government to begin work towards the target.
The Left Alliance filed a dissenting opinion. Hanna Sarkkinen, the party’s MP in the group, said setting a binding target before elections limits the next government’s room for manoeuvre. “The calculations are uncertain. A target set now restricts the future government unnecessarily,” she said.
Sarkkinen said the party would support a deficit range of 2–3 per cent and accepts EU-mandated adjustment. She said the Left Alliance will publish its own fiscal plan before the election. The party opposes cuts to social and health services, education and social security, and favours higher taxation on large incomes and wealth.
Prime Minister Petteri Orpo addressed the issue during the opening debate of the parliamentary session. He defended the government’s fiscal record. “The government has worked with determination and saved Finland from uncontrolled debt growth,” he said.
Orpo stated that the current administration has already implemented €10bn in adjustment and that the next government faces a task of similar scale. “None of the decisions taken can be reversed. Instead, more decisions must be made,” he said.
The European Commission confirmed last week that it will not require additional adjustment from Finland in 2026 or 2027 under the excessive deficit procedure
Under the working group’s baseline scenario, adjustment would amount to €1.2bn in 2028 and more than €2bn annually thereafter. Over the seven-year period from 2028 to 2034, the total need would reach €8.3bn.
The Finnish Confederation of Professionals, STTK, warned that the scale of adjustment poses risks to growth. Chair Else-Mai Kirvesniemi said the smallest possible adjustment within EU rules should be chosen.
The debt brake aims to lower Finland’s debt ratio first towards 60 per cent of GDP and in the longer term to 40 per cent. An independent fiscal council will monitor compliance and alert the government if it deviates from the path.
The working group will refine its estimates later this year. Parties are expected to present detailed measures as the election approaches.
HT
