HELSINKI The Finnish government will raise taxes and cut spending to bring down the budget deficit, Prime Minister Jyrki Katainen said on Tuesday.
The budget framework agreement, where the government sets spending and taxation plans for the next three years, led to the small Left Alliance exiting the government as it rejected the austerity measures. The government still commands a parliamentary majority.
The measures announced aim at bringing the government deficit down to 1 percent of gross domestic product by 2018, the government said. It was 2 percent of GDP last year.
"These were not easy decisions, but they were necessary," Prime Minister Jyrki Katainen told a news conference.