(MENAFN) Finland could come under the EU’s Excessive Debt Procedure due to long-term economic weaknesses and slow revenue growth, the country’s finance minister has warned, as stated by reports.

Speaking to parliament, Riikka Purra cited the European Commission’s forecast, noting that Finland’s public debt is expected to surpass the 90% of GDP limit as early as 2026. “Finland will be subject to the Excessive Debt Procedure from the beginning of the year,” she said, adding that the figures make this outcome “very clear.” The commission predicts that public debt could reach 92.3% of GDP by 2027, potentially ranking Finland as the sixth most indebted EU member.

Purra emphasized that the issue stems from structural economic problems and weak revenue growth rather than defense spending. She highlighted rising social welfare and benefit transfer expenditures as major factors behind the deficit.

If Finland enters the procedure, it will need to submit more frequent reports on public finances and debt reduction efforts, and EU rules require governments to reduce the debt ratio by at least 1% per year. Non-compliance can result in sanctions, although the threshold for such penalties is high.

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