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Finnish finance minister warns of new public spending cuts

HELSINKI, Nov 26 (Reuters) - Finland may need to cut public spending by a further 1 to 2 billion euros next year, Finnish Finance Minister Petteri Orpo said on Saturday.

Orpo said in an interview with newspaper Helsingin Sanomatthe that the centre-right government needed to implement new cuts if the Nordic country’s economy does not show clear signs of recovery before spring.

The government is on track to make 4 billion euros ($4 billion) of spending cuts by 2019 and, with reforms, it aims to save 10 billion by 2030.

“Forecasts show one percent growth for the near future. It is not enough to curb our debt from growing, or to tackle unemployment”, Orpo said.

The euro zone member’s economy is struggling to restore growth after a decade of stagnation as the impact of the sharp decline in Nokia’s former phone business was exacerbated by high labour costs and a recession in neighbouring Russia.

According to preliminary data, Finland’s economy expanded 0.5 percent in the third quarter after stagnating in the previous quarter.

European Commission forecasts expect the Finnish economy to expand by 0.8 percent next year, less than any other country in the European Union. ($1 = 0.9443 euros) (Reporting by Tuomas Forsell; Editing by Alexander Smith)

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