Council Opinion of 31 January 2000 on the updated stability programme of Finland, 1999 to 2003
Date: 2000-01-31
Institutions: Council of the European Union
Subjects: Finland, economic stabilisation, public finance

2.3.2000

EN

Official Journal of the European Communities

C 60/3

COUNCIL OPINION

of 31 January 2000

on the updated stability programme of Finland, 1999 to 2003

(2000/C 60/03)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European
Community,

Having regard to Council REgulation (EC) No 1466/97 of 7
July 1997 on the strengthening of the surveillance of budgetary
positions and the surveillane and coordination of economic
policies (1), and in particular Article 5(3) thereof,

Having regard to the recommendation of the Commission,

After consulting the Economic and Financial Committee,

HAS DELIVERED THIS OPINION:

On 31 January 2000 the Council examined Finland’s updated
Stability Programme, which covers the period 1999 to 2003.
The Council notes with satisfaction that the Finnish general
government balance turned into a surplus in 1998 and, after
an expected outturn of
is
projected to register surpluses above 4 % of GDP throughout
the period 2000 to 2003, while the general Government debt
to GDP ratio is projected to continue to decline. Moreover, the
Council considers that the Programme is consistent with the
Broad Economic Policy Guidelines.

just over 3 % of GDP in 1999,

The Council welcomes the record of implementation of the
1998 Programme (2), where the projections then made for
the improvement of the budget balance and the reduction in
government debt have been exceeded.

The macroeconomic scenario presented in the updated Stability
Programme appears realistic for 1999 and 2000, but it carries
the risk that the economy may overheat and threaten price
therefore
stability
important that wage moderation is sustained.

if wage moderation weakens.

is

It

The Council commends the fiscal strategy of
the updated
Stability Programme. This builds on the previous Programme
and aims at reaching surpluses above 4 % of GDP through a
reduction in government expenditure in relation to GDP but at
the same time reduces the tax burden.

The Council notes with satisfaction that the debt reduction
could now actually exceed the expectations in the updated
Programme due to more extensive privatisation measures (cid:151)
with proceeds directed towards debt
reduction (cid:151) than
assumed in the Programme.

Finland has already fulfilled the requirements of the Stability
and Growth Pact in 1999. This will continue to be the case
during the updated Programme period as the surplus target of
4,7 % of GDP in 2003 is clearly sufficient to provide a safety
margin against breaching the 3 % of GDP deficit threshold in
normal cyclical fluctuations. Moreover, the Council considers
that the continued fiscal consolidation effort embodied in the
the future
updated Programme is also justified in view of
effects of population ageing.

it

expenditure,

is opportune

The Council welcomes the fact that the updated Programme
addresses the issue of structural reforms. Fiscal and labour
market reform is needed to reduce the current heavy overall
taxation and social contribution burden on labour. Regarding
to review benefit
public
entitlements and the structure of
the pension system. The
reductions in Government expenditure and revenue relative
to GDP foreseen in the Programme are themselves consistent
with increasing employment, which the Government identifies
as its main economic objective. Further structural reforms in
market services and in the labour market would also support
recommends that such
employment creation. The Council
reforms be applied with energy and consistency.

(1) OJ L 209, 2.8.1997, s. 1.
(2) The first stability programme of Finland, 1998 to 2002, was the
subject of a Council opinion of 12 October 1998 (OJ C 372,
2.12.1998, p. 1).