HELSINKI: Finland should be wary of making too many cuts too fast in an effort to reduce debt, believes economist Klaus Weyerstrass of the Austrian Institute for Advanced Studies.
“The incurrence of liabilities should be targeted at beneficial consumer debt investments. At the same time, you should work at rooting out debt burden that is increasing too fast,” says Weyerstrass.
The consensus on the need for cuts has been strengthened in Finland after the European Commission gave Finland a serious warning about the EU’s Growth and Stability Pact budget deficit and a breach of the rules on the debt ratio. The Treasury has previously estimated that the fiscal adjustment requirements in the long term are 10 billion euros and in the next electoral period 6 billion euros.
