Finance Minister Riikka Purra (Finns) has told Yle that the government must decide on a new round of budget cuts worth about one billion euros during this coming autumn.
"I would like these decisions to be made this year. The closer we get to the election, the harder it becomes to make them," Purra said, adding that some of the saving measures may be implemented in 2027.
According to the Ministry of Finance's budget chief Mika Niemelä, Finland needs roughly another billion euros in fiscal adjustments during the current government term.
Purra had already floated the idea earlier this year, while stressing that social security and healthcare should remain off the chopping block.
She acknowledged the scale of the savings target.
"A billion is a very large amount," she said, adding, "Purchasing power must not be weakened in this situation. The measures must be targeted where they cause the least harm."
Despite the difficulty, she remained confident.
"We will find the billion and it won't even be that hard," Purra said.
The government has already passed 2.6 billion euros in spending cuts, not including dynamic effects or savings made by regional wellbeing service counties.
Targeted cuts
Earlier this summer, Purra ruled out tax hikes and suggested cuts could come from development aid or corporate subsidies.
"I'm convinced we can find something in that area too," she said regarding the business subsidies.
However, efforts to trim subsidies have proven difficult in the past.
"We cannot make savings decisions that increase unemployment," she further noted, acknowledging the political and economic complexity of cutting corporate support.
The ministry produced a list of possible subsidy cuts in the spring, but the government's April budget negotiations yielded just 12 million euros in reductions from over one billion euros in annual direct business support.
Finland's state budget stands at around 76 billion euros annually.
Cuts to pensions not up for discussion
In addition to healthcare and social benefits, Purra said pensions and property taxes will also be spared.
"This government will not touch pensions," she pledged.
She noted that pension reforms have already been implemented, and taxes on pensioners have increased in the past.
"We cannot make decisions that weaken purchasing power," she stated for a second time.
On property taxes, she said that she does not support tax increases.
Debt and growth outlook
Finland is expected to borrow 13.2 billion euros this year.
While the EU's fiscal rules limit public debt to 60 percent of GDP, Finland's debt is now over 80 percent. However, the European Commission has largely overlooked this discrepancy in recent years as many governments had to borrow during the Covid era and accompanying financial crises.
Finland's government has also set a goal of creating 100,000 new jobs during its term, though Purra did not confirm whether she still believes that target is realistic, given Finland's unemployment rate is the second-highest in the EU.
"Once our economy improves and reforms move forward, new jobs will be created. Employment will be better than it would be without these measures," she said.
She admitted, however, that current unemployment figures are "very poor."
Based on the finance ministry's economic outlook, the government will not meet its employment goal.
"I don't see any need to criticise civil servants," Purra said when asked about the ministry's assessment.
