Last month, Finland was issued with a warning by the European Union commission over the size of its budget deficit, which is expected to rise above 4 percent of GDP this year. Finland, Cyprus and Denmark were censured for breaching the limit for budget deficits of 3 percent of GDP which the EU stability pact imposes on member states. The commission urged Helsinki to take action to return state finances below the 3 percent limit by 2011...
Finland suffered the worst contraction in the 16-member eurozone in 2009, as GDP fell by around 8 percent. The decline continued in to the first quarter of 2010, falling a further 0.8 percent. Unemployment has been consistently above 10 percent for over a year, standing at 10.5 percent in May. Across the eurozone as a whole, unemployment is estimated to be 10 percent.
Pressure is growing for the government to take action. In a recent report, the IMF urged the government to remove the tax breaks it currently offers for interest payments on home loans, claiming that this could save the state between 500-900 million euros. The IMF report went on to recommend a programme of spending cuts rather than tax hikes, a recipe for the destruction of jobs and social services.
http://www.wsws.org/articles/2010/jul2010/finl-j23.shtml
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