Finland no longer the 'sick man of Europe' but mid-term
problems loom: finance minister
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[November 29, 2017]
By Jussi Rosendahl and Tuomas Forsell
HELSINKI (Reuters) - Finland is recovering
at rapid pace from decade-long stagnation but the government must push
more economic reforms because of the ageing population and growing
public debt, Finance Minister Petteri Orpo said in an interview.
The Finnish economy -- dubbed by Orpo's predecessor Alexander Stubb as
the sick man of Europe -- expanded 3.6 percent in the third quarter from
a year ago, preliminary data showed.
The government projects 2.9 percent for this year as a whole, a number
Orpo said may well be lifted in December.
"This is not just a peak, it is broad-based growth that seems to hold up
in the coming years, and that is a big thing," Orpo, sitting in his
office in the government palace, told Reuters.
"But to cope with the upcoming challenges, we need to make more
structural reforms to boost employment and secure continuing growth."
Finland's output is still below levels prior to the financial crisis,
having taken a string of internal and external hits, including a decline
in the once dominant Nokia's <NOKIA.HE> phone business, labor market
rigidity, and recession in neighboring Russia.
A fast-ageing population will also increase public spending and
government debt after 2020, a problem which the three-party center-right
government has sought to tackle with spending cuts and complicated
reforms in labor markets and health care.
Orpo said a 2016 labor reform pact, which cut workers'benefits for the
first time in a century, helped to boostgrowth but wasn't enough.
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FinlandŐs Finance Minister Petteri Orpo listens to the media in
Helsinki, Finland, November 29, 2017. REUTERS/Tuomas Forsell
"The employment rate has increased to around 70 percent now. We need 75 percent
for the 2020's."
He said there remained welfare traps to cut, while wage negotiations should be
held more often at companies rather than unions.
Orpo said he believed the government -- led by Prime Minister Juha Sipila -- was
more united now following the co-ruling Finns party's split-up in June.
A leadership change at the nationalist party led to its dismissal from the
coalition, while a group of its lawmakers formed a new, more moderate "Blue
Reform" party that kept a ruling position.
Health care reform, a key plan to cut future annual costs by3 billion euros,
will be completed after years of talks that almost brought down the government
in 2015, Orpo said. "We are very close already, no-one in the government wants
to fail in this."
(Reporting by Jussi Rosendahl and Tuomas Forsell Editing by Jeremy Gaunt)
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