A minister in the government of Finland, one of the euro zone’s strictest fiscal disciplinarians, has said Ireland provides an example to her country as it seeks a route out of recession.
“As a Finnish citizen, we Finns have lots to learn from Ireland,” said Lenita Toivakka, who has been minister for European affairs since July .
“I think you have taken seriously your situation and you have done lots of work. Of course it means that your incomes and outcomes are now in quite good balance and that must have meant quite hard decisions for the politicians.”
Alongside Germany and the Netherlands, triple-A rated Finland dealt a blow to Irish hopes of further bank debt relief two years ago when they objected to retrospective recapitalisations by the European Stability Mechanism fund.
On a flying visit to Dublin, Ms Toivakka said it would be better not to comment on that and added that she was not a minister at that time.
Recession in Finland
Finland has been in recession for three years, its economy laid low by a drop in exports due to the euro zone emergency and problems in the mobile phone and paper sectors.
Ms Toivakka also recognised a blowback into the Finnish economy from western sanctions against neighbouring Russia over its persistent interference in Ukraine.
“Our estimate for growth this year is about zero, and for next year maybe zero point something.” It followed that the economic outlook for Finland in the coming months was “not looking very good”, although she insisted the government was working hard to revive growth. This was the main challenge for Helsinki.
She said the administration was determined to retain its prized triple-A credit rating and was prepared to execute the difficult structural reforms, just as Ireland had executed such reforms.
Helsinki has embarked on healthcare and social reforms, among them an increase in the pension age to 65 from 63. “We have made the decisions but haven’t the reforms yet and it’s not going to be easy because it’s not just the decision.”
With growth at a standstill in large swathes of the euro zone, she expressed confidence in the economic plan advanced by incoming European Commission chief Jean-Claude Juncker.
The minister had little to say about the clamour for the European Central Bank to engage in full-scale quantitative easing, saying that the government had discussed the matter but was not pressing the bank for action.
