HELSINKI, Sept 24 Finland may need to trim a
further one billion euros ($1.35 billion) from public spending
next year to rein in its debt and must push through welfare
reform despite opposition if it wants to keep its triple-A
rating, a minister said.
Carl Haglund, defence minister and the leader of the small
Swedish People's Party, said in an interview published in
Helsingin Sanomat newspaper on Tuesday that further austerity
was needed to sort out the country's finances.
The Nordic country's officials said last week Finnish debt
was expected to breach the European Union's limit of 60 percent
of gross domestic product next year, raising doubts over the
economy's triple-A credit rating.
The six-party government has already announced spending cuts
and tax hikes totalling 5 billion euros to rein in debt in a
country, once hailed for its solid finances. Finland fell into
recession earlier this year as the downturn in Europe hurt its
exports of paper, machines and ships.
"Nothing indicates that growth would fill the gap between
costs and revenue," Haglund said.
He said plans by the government, led by centre-right Prime
Minister Jyrki Katainen, to scale back the generous Finnish
welfare system should not be abandoned, but that several details
needed further negotiation.
"I think there is a large risk that the government or the
parliament loses courage, which would be a catastrophe," the
minister said. "If we can't turn the debt down, the triple-A
rating is in danger."