Credible fiscal policy requires predictability and sustained fiscal adjustment

The Economic Policy Council has completed its first statutory assessment of the Government’s measures to strengthen general government finances in relation to EU targets in line with the new fiscal rules. The opinion of the Economic Policy Council is a weighty text, and the Government takes it very seriously.

According to the Council, the Government has implemented significant fiscal adjustment measures, putting Finland on track to comply with the net expenditure path in 2024–2026. However, there is a risk that the targets will not be met in 2027 and 2028. In the Council’s view, the Government should adopt some new adjustment measures in the 2026 government budget session or at least refrain from making new decisions that could weaken general government finances.
 

The Government has decided on significant fiscal adjustment measures and will continue to implement them until the end of its term

In the 2027 Budget, direct spending cuts will reach EUR 4.8 billion. New decisions to curb indebtedness will be implemented to the tune of nearly EUR one billion. As the Government agreed in its spending limits session, new savings will be directed at central government and grants for organisations, among others. During the parliamentary term, we have introduced additional savings measures worth billions of euros on several occasions, beyond those agreed on in the Government Programme.