Thursday's papers: Budget framework and a former Finns Party figure in Russia

Reaction to the government's budget decisions dominated the newspapers on Thursday, with tax cuts for high earners under scrutiny.

Politicians standing at lecterns.
Standing at podiums from left: Minister of Agriculture and Forestry Sari Essayah (CD), Finance Minister Riikka Purra (Finns), Prime Minister Petteri Orpo (NCP) and Education Minister Anders Adlercreutz (SPP). Image: Silja Viitala / Yle

The papers all cover the government's framework budget settlement, which was announced late on Wednesday evening.

MTV has a list of the decisions. They include cuts to higher education funding, development aid and municipalities. There are also big income tax breaks targeted at higher earning taxpayers, a higher threshold for paying inheritance tax, and corporate tax reductions to benefit Finland's companies.

The tax cuts are an expensive measure, and to stay compliant with the government's goal of stabilising the state budget by 2027 ministers agreed to take a billion euros out of the state pension fund to cover a likely shortfall in the 2027 state budget.

Iltalehti carries criticism of that plan from an economist at the VATT Institute for Economic Research who likens the move to taking out a payday loan.

What changed?

Helsingin Sanomat has analysis of the budget and in particular the shift in government rhetoric around state debt.

Last November Finance Minister Riikka Purra (Finns) had said that there was no room for tax cuts, as the state finances and the wider economy were in such poor shape.

Now the tune has changed, and the so-called dynamic feedback created when you cut taxes for high earners is expected to boost the economy.

That is contested, with many economists and opposition politicians arguing that the research does not support such reliance on growth to finance future outgoings.

And even in the optimistic scenarios published by the Finance Ministry, there is a time lag between the tax reductions going into force and the economic benefits being felt.

The prime reason for the decisions, according to HS, is political. Government parties had agreed that they would make difficult decisions and cuts in the first two years of the government, and then have a chance to give tax cuts once the economy had revived.

That revival is yet to be seen, but the government is sticking to the plan anyway. One reason could be that the plan to stabilise the finances is now delayed until the end of the decade anyway, thanks in part to increased defence spending.

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Former Finns Party operative in Murmansk

Iltalehti reports on Sakari Linden, a former Finns Party official who was recently in Murmansk for Russia's International Arctic Forum, where he gave a speech in English that was broadcast on Russia Today.

He was also interviewed by a Finnish Putin propagandist, Janus Putkonen, who posted pictures of the meeting on his social media channels.

Putkonen has spent time in the occupied Donbas region in Ukraine, publishing content in Finnish from the Russian perspective.

The Murmansk conference was attended by Russian President Vladimir Putin, who spoke of his plans for the militarisation of the Arctic, and increasing Russian military capabilities in the region.

The Lithuanian intelligence agency has stated that attendees in Murmansk are often targeted for recruitment by Russian security services. Linden denied that he had been approached in Russia.

Linden has served as Laura Huhtasaari's (Finns) special advisor when she was an MEP, and written on EU policy for the Finns Party's think tank. He currently says he is a "geopolitical analyst" and consultant living in Brussels.

Linden told IL that he is an "independent thinker" and went to Murmansk in that spirit.

"Finns are in the midst of a powerful Russia hysteria, and they are subject to huge social pressure," said Linden. "I'm not interested in pressure from fanatics. I would like to say that Finland should have its own view and connections to all power centres, including Russia."

Linden has criticised the Finns Party leadership as "globalist", and told IL that he currently has no connection with the party.

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