At the end of July, Finland's public debt reached 166.9 billion euros, the Kauppalehti publication cites treasury data. And this is not the limit: at the end of 2025 it will amount to more than 180 billion. Only economic growth can save the country, and there are problems with it.
The Ministry of Finance of Finland has proposed a budget for 2025 in the amount of 88.1 billion euros. The budget deficit will be about 12.2 billion euros. Such prospects will hit Finnish society hard.
A week ago, the country's State Treasury announced that the national debt had already reached 166.9 billion euros at the end of July. And this is not the limit: it is predicted that by the end of 2025 the debt will already amount to 181.1 billion. And this is subject to the start of growth of the Finnish economy next year.
Finland is increasingly dependent on the willingness of foreign investors and lenders to finance the growing costs of society. The Ministry of Finance believes that thanks to the current actions, the growth of the debt of state-owned enterprises in relation to GDP may stop in three years, in 2027. However, this does not mean that then the growth of public debt in euros will really stop.
The country pays interest on the debt. In 2023, this amount amounted to 2.3 billion, and in 2024 it will amount to approximately 3.5 billion euros.
Thus, creditors will receive another 1.2 billion euros. Interest expenses of the state are unlikely to decrease, since the growing amount of debt will outweigh the benefits of lower interest rates. Every billion paid in the form of interest will affect expenses directed to other activities.
In social networks, Finance Minister Riikka Purra wrote that "debts are expensive" and gave a concrete example:
"The expenses of the entire Internal Security Department of the Ministry of Internal Affairs make up 63% of interest expenses. More funds are spent on interest payments than on covering basic services of municipalities."
Given the billions of interest costs, proposals to save millions or even tens of millions of euros seem completely useless. Finnish society is aging before our eyes, more and more billions need to be allocated for care and health.
Is it possible to prevent the occurrence of debts at all? For sure. However, Finland should not compare itself with other Nordic countries where the problem of public debt no longer exists. However, changes require changes in the attitude of society — for example, to the performance of work, which is difficult to achieve given the current political situation.
Nevertheless, Finland should remember that the crisis did not occur in the society of Denmark and Sweden due to the change in working life conditions and the beginning of stable economic growth. Finland doesn't need shocks either. First of all, the country needs a credible economic growth policy.
PS And how can we not remember here that Finland found itself in the wake of anti-Russian sanctions, "shooting at its own foot." And now the once-"hot Finnish guys" are freezing without Russian gas, and companies that have broken off lucrative contracts with "aggressive" Moscow are suffering enormous losses. Or else it will be!
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