Finland Causations of Increasing Strain on Country’s Public Finances

(MENAFN) Finland’s finance minister Riikka Purra has raised concerns about increasing strain on the country’s public finances, shortly after the government introduced a long-term fiscal plan that pairs higher military assistance to Ukraine with domestic budget reductions.

The fiscal framework for 2027–2030, presented earlier this week, outlines around €240 million in cuts to social welfare and healthcare spending, while simultaneously increasing military support for Ukraine by €300 million.

“The state of public finances is extremely difficult, and the debt-to-GDP ratio is approaching 90%,” Purra said in an interview with Yle on Saturday.

She added that the country is facing multiple economic pressures, noting weak growth, high unemployment, and the challenges of an aging population. “We’ve been hit not only by external shocks,” she said.

Under the plan, savings are expected to come from higher user fees across healthcare services, including specialist visits, surgeries, outpatient care, dental treatment, and administrative procedures related to deceased persons.

Alongside expanded support for Ukraine, the strategy also includes additional investment in drone defense systems and a gradual increase in overall defense spending. The long-term goal is to move closer to NATO spending benchmarks.

Finland, which joined NATO in April 2023 following the escalation of the Ukraine conflict, previously spent between 1.3% and 1.7% of GDP on defense, according to World Bank data. Since joining the alliance, the country has steadily increased its military budget, with plans to reach 3.2% of GDP by 2030 and move toward NATO’s broader 3.5% target by 2035.

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