COMMISSION STAFF WORKING DOCUMENT Assessment of the 2012 national reform programme and stability programme for FINLAND Accompanying the document Recommendation for a COUNCIL RECOMMENDATION on Finland’s 2012 national reform programme and delivering a Council Opinion on Finland’s updated stability programme for 2012-2015
Date: 2012-05-30
Institutions: European Commission
Subjects: Finland, administrative reform, budgetary equilibrium, competitiveness, free competition, long-term unemployment, pay policy, population ageing, public expenditure, public service, retirement conditions

EUROPEAN COMMISSION 

Brussels, 30.5.2012  
SWD(2012) 312 final 

COMMISSION STAFF WORKING DOCUMENT 

Assessment of the 2012 national reform programme and stability programme for  
FINLAND 

Accompanying the document 

Recommendation for a  

COUNCIL RECOMMENDATION 

on Finland’s 2012 national reform programme and delivering a Council Opinion on 
Finland’s updated stability programme for 2012-2015 

{COM(2012) 312 final} 

EN 

   EN 

 
 
 
 
  
 
 
 
 
CONTENT 

EXECUTIVE SUMMARY................................................................................................. 3 

1. 

INTRODUCTION....................................................................................................... 4 

2.  ECONOMIC DEVELOPMENTS AND CHALLENGES .......................................... 5 

2.1.  Recent economic developments and outlook .................................................... 5 

2.2.  Challenges ......................................................................................................... 5 

3.  ASSESSMENT OF POLICY AGENDA .................................................................... 8 

3.1.  Fiscal policy and taxation.................................................................................. 8 

3.2.  Financial sector ............................................................................................... 13 

3.3.  Labour market, education and social policies ................................................. 14 

3.4.  Structural measures promoting growth and competitiveness.......................... 16 

3.5.  Modernisation of public administration .......................................................... 20 

4.  OVERVIEW TABLE................................................................................................ 21 

ANNEX ............................................................................................................................. 25 

2

 
 
 
EXECUTIVE SUMMARY 

In  2012,  Finland's  economic  activity  is  expected  to  grow  by  0.8%  and  by  1.6%  in  2013. 
Unemployment is foreseen stay at 8%. 

Finland has experienced a strong recovery in recent years and economic fundamentals remain 
strong. The country is on track for balancing the general government finances by 2015. and it 
is taking steps to ensure the long-term sustainability of public finances (e.g. by introducing a 
reform to reorganize the municipal sector). 

However, Finland is facing important challenges with respect to the long-term sustainability 
of  the  current  standard  of  living  due  to  an  ageing  population,  industrial  restructuring  and  a 
loss  of  competitiveness  on  international  markets.  For  the  first  time  in  nearly  20  years,  the 
current  account  turned  into  deficit  in  2011  and  is  expected  to  remain  in  deficit  in  2012. 
Strengthening competition in product and services market has become increasingly important 
for boosting productivity and enhancing potential economic growth. Notwithstanding the past 
strong Finnish R&D and innovation performance, without a significant increase in the number 
of  internationalising  innovative  high  growth  firms,  Finland’s  ranking  as  an  EU  innovation 
leader risks declining. There is continued need to lengthen working careers and to combat the 
rise in long-term unemployment as well as youth unemployment. 

3

 
 
 
1. 

INTRODUCTION 

Procedural aspects 

the  Council  of 

the  European  Union  adopted  five  country-specific 
In  July  2011 
recommendations  (CSRs)  for  economic  and  structural  reform  policies  in  Finland.  These 
recommendations  concerned  public  finances,  the  pension  system,  the  labour  market, 
efficiency of public services and competition in the services sector. 

In  November  2011  the  Annual  Growth  Survey  for  2012  (AGS  2012)  set  out  the  basis  for 
building the necessary common understanding about the priorities for action at national and 
EU  levels  in  2012.  It  focused  on  five  priorities  —  ensuring  growth-friendly  fiscal 
the  economy,  promoting  growth  and 
to 
consolidation, 
competitiveness,  tackling  unemployment  and  the  social  consequences  of  the  crisis,  and 
modernising public administration — and encouraged Member States to implement them in 
the 2012 European Semester. 

restoring  normal 

lending 

Finland presented updates of its national reform programme and the stability programme on 
April  19 2012.  These  programmes  specify  the  progress  made  since  July  2011  and  plans  for 
the  future.  They  build  on  the  update  of  the  national  reform  programme  submitted  in 
November 2011 after the election of the new government in Finland. 

This Staff Working Document assesses the state of implementation of the 2011 CSRs as well 
as the AGS 2012 in Finland, identifies current policy challenges and, on this basis, examines 
the country’s latest policy plans. 

Overall assessment 

Overall, at least partial progress has been made on all the recommendations. 

Finland  managed  to  achieve  general  government  deficit  of  0.5%  in  2011  while  the  stability 
programme  target  was  0.9%  of  GDP.  Significant  consolidation  efforts  were  made  and,  in 
addition,  economic  growth  continued  to  be  strong  in  2011.  Discretionary  tax  increases  and 
expenditure cuts improved the general government budgetary position in 2011. As from 2012, 
the government has introduced further fiscal measures, aimed at shifting taxation from direct 
to  indirect,  and  increasing  social  spending  while  cutting  administrative  expenditure  and 
transfers to local governments. Additional measures will take effect in 2013. 

The  Finnish  government  has  introduced  a  major  reform  proposal  aimed  at  obtaining  a 
significant decrease in the number of local municipalities, leading to better and more efficient 
provision of public services. 

To tackle the unemployment problems, the government has guaranteed that all young people 
under  25  and  all  recent  graduates  under  30  will  be  provided  with  a  job  or  training,  study 
into 
placement,  workshop  or  rehabilitation  placement  no 
unemployment. For long-term, unemployed, a fixed-term pilot programme has been launched 
transferring  the  primary  responsibility  for  management  of  an  individual’s  employment 
support to the municipality/municipalities after a 12-month period of unemployment.  

three  months 

later 

than 

Some measures have been taken to increase the effective retirement age. The government and 
the social partners have agreed to raise the part-time pension age limit from 60 to 61 years, to 
limit early retirement and to raise pension contributions.  

To increase competition in the market, a new national competition law has been adopted. It 
clarifies  merger  control,  adjusts  the  leniency  programme  and  provides  individuals  with  the 

4

 
 
right to seek damages. The government has communicated its intent to initiate a broad-based 
project to promote healthy competition in Finland. 

The  policy  plans  submitted  by  Finland  are  relevant  and  credible  with  respect  to  the  2011 
CSRs, AGS priorities, Europe 2020 Targets and Euro Plus Pact (EPP) commitments, although 
there  is  scope  for  going  further  in  some  areas.  In  particular,  incentives  to  increase  the 
effective retirement age further and fostering competition in the service sector are still among 
the challenges. 

2.  ECONOMIC DEVELOPMENTS AND CHALLENGES 

2.1.  Recent economic developments and outlook 

Following  a  strong  recovery  in  2010,  with  GDP  expanding  by  3.7 %,  the  Finnish  economy 
grew by 2.9 % in 2011. However, economic activity appears to have slowed down in the last 
quarter of 2011. For the first half of 2012, growth is expected to remain weak, but to stage a 
gradual recovery thereafter, resulting in annual growth of 0.8%.  

The slowdown in growth comes mainly from a decline in net exports resulting from the global 
economic  slowdown  as  well  as  diminishing  export  capacity  linked  to  on-going  structural 
changes within some of Finland’s main industries. Gross fixed capital formation is projected 
to  continue  to  weigh  on  growth  in  2012  and  to  recover  gradually  in  2013.  While  fiscal 
constraints  do  not  allow  for  the  increase  in  public  investments,  the  private  sector  is  even 
expected to reduce investments, particularly in the construction sector. 

In  contrast,  private  consumption  expenditure  was  strong  in  2011  and  is  expected  to  slow 
down  in  2012.  Although  unemployment  continued  to  decline  in  2011,  this  favourable 
development  is  not  expected  to  continue  in  2012.  In  2013,  the  labour  market  situation  is 
projected to improve marginally, with employment in industry continuing to be replaced by 
employment in services. 

Inflation decreased, in line with expectations, in the fourth quarter of 2011. However, in early 
2012 increases in indirect taxes were introduced, contributing to somewhat higher inflation at 
the beginning of 2012. HICP (harmonised index of consumer prices) inflation is nevertheless 
forecast to decline from a peak of 3.3 % in 2011 to 3% in 2012. 

Taking into account the large share of investment and intermediate goods in Finnish exports, 
the economy faces further downside risks if the lack of confidence in global markets results in 
a significant reduction of global investments, thus reducing the demand for Finnish exports. 

2.2.  Challenges 

In  Finland  productivity  and  living  standards  rank  high  among  the  developed  countries. 
However,  the  ageing  population  raises  serious  problems  for  the  Finnish  economy. 
Demographic projections show that the working age population will decline by over 5 % of 
the  current  labour  force  over  the  period  2010-2020.  The  decline  will  reduce  the  economy’s 
growth  potential,  with  adverse  effects  on  the  labour  market  and  public  finances.  Thus  it  is 
increasingly  important  to  lengthen  working  careers  and  to  combat  the  rise  in  long-term 
unemployment  as  well  as  persistently  high  youth  unemployment.  In  addition,  regional  and 
skills mismatches on the labour market have to be addressed. 

Although Finnish labour productivity has traditionally been very high in manufacturing, it is 
less so in the services sector, and in government services in particular. The majority of public 
services are provided by local government. This sector is fragmented, as the average size of 
municipalities is small. Although municipalities cooperate in the provision of services, there 

5

 
 
is  very  little  competition  and  administrative  measures  to  boost  productivity  have  not  had 
much effect. 

Strengthening  competition  in  the  services  sector  has  become  increasingly  important  for 
boosting  productivity  and  enhancing  potential  economic  growth.  Competition  and 
productivity  would  also  stand  to  gain  from  a  less  restrictive  and  transparent  zoning  and 
planning system. 

Regulatory barriers in the Finnish service sector are still restrictive and market concentration 
is  high,  not  only  in  retail  trade  but  also  in  areas  of  production.  In  the  grocery  retail  market 
Finland has the greatest degree of market concentration and food prices are among the highest 
in  Europe.  Recent  information  indicates  that  there  is  still  scope  for  addressing  structural 
barriers  to  competition  and  for  improvement  in  facilitating  entry  to  the  services  sector, 
especially in retail trade. 

Since emerging from the crisis, the previous productivity growth path has not been reached. 
Over  recent  years  Finland’s  export-oriented  economy  has  lost  market  share  in  foreign 
markets.  Unit  labour  costs  have  increased  over  the  last  decade,  although  not  in  the 
manufacturing sector. Growth in some currently dominant industries, namely electronics and 
paper, appears to have peaked and in general the share of manufacturing in GDP is declining. 
Finland’s competitiveness is high according to comparative studies, but the country needs to 
continue  promoting  policies  that  support  new  high-growth  enterprises,  internationalisation 
and maintain its attractiveness for jobs, businesses and investments. 

Over the last few years, the decline of the ICT and pulp and paper sectors has taken the form 
of  a  structural  change,  which  is  reflected  in  the  decline  of  Finland’s  exports  and, 
consequently,  in  the  trade  balance.  The  change  in  the  ICT  sector  also  undermines  the 
preconditions for GDP growth in the coming years and has, at least in the short term, a direct 
impact  on  business  R&D  intensity.  Unless  there  is  a  significant  increase  in  the  number  of 
innovative  high-growth  entrepreneurial  firms, Finland’s ranking  as  an  EU innovation  leader 
may  well  decline.  This  will  require  a  strong  policy  commitment  and  a  reinforcement  of 
efforts. It will also be crucial to exploit and disseminate the extensive ICT know-how in other 
industries in Finland, including the public sector. 

Nominal unit labour costs rose by 12 % over the period 2007-2010. This is a rapid increase, 
especially  by  comparison  with  major  trade  partners  such  as  Sweden  and  Germany,  but  also 
with  the  European  Union  average.  It  is  a  reflection  of  faster  wage  growth,  settled  by  a 
collective  agreement  negotiated  in  2007  immediately  before  the  crisis  and  decreased 
productivity  arising  from  the  crises.  Policy  measures  to  support  paid  leave  during  the  crisis 
allowed to keep employment high but decreased productivity. The tripartite wage agreement 
of 2011 paves the way for modest wage increases in 2012 and 2013, which should improve 
Finland’s relative position vis-à-vis its main trading partners. 

Box  1.  Summary  of  the  results  of  the  in-depth  review  under  the  macroeconomic 
imbalances procedure 

6

 
 
 
 
 
The  in-depth  review  analysed  the  potential  imbalances  and  the  possible  macroeconomic 
risks in the areas of external competitiveness and developments in private sector debt. The 
main observations are: 

•  Over the past decade the current account has shown a declining trend from a surplus 
of 8% of GDP in 2002 into a deficit of ½% in 2011. Even the trade balance of goods 
turned into a deficit, the first time since 1990. Finland is exporting intermediate and 
investment goods mainly to mature, slowly growing economies and its products have 
limited presence in developing economies. World market shares have declined by one 
fifth  over  the  past  five  years  only.  The  country  is  vulnerable  towards  energy  price 
increases which explain the deterioration of the terms of trade. 

•  Unit labour costs (ULCs) increased significantly during the crisis, as rigidities in the 
wage  settlement  process  did  not  allow  taking  into  account  the  drop  of  productivity 
during  the  crisis.  In  other  periods,  ULCs  in  industry  have  grown  below  euro  area 
average.  ULC  developments  have  contributed  to,  but  are  not  the  main  driving  force 
behind  the  deterioration  of  the  current  account.  However,  in  the  future  measures 
should be taken to increase productivity, including in the services sector, and the link 
between productivity and wages should be closely maintained.  

•  For  a  mature  economy  with  an  aging  population  the  declining  trend  in  the  current 
account  and  trade  balance  can  put  the  living  standards  at  risk,  if  continued. 
Productivity  improvements,  labour  market  adjustments  and  innovation  are  needed  to 
maintain the living standard. Demographic shifts will put pressure on wages and price 
competitiveness of the Finnish economy, even if the effective retirement age will be 
adapted accordingly. 

•  While household debt had almost doubled over the last decade, private sector debt has 
started  to  decline.  The  private  sector,  excluding  the  financial  sector,  has  been 
deleveraging in 2011 and the debt level is moving closer to the corresponding ceiling 
set in the Alert Mechanism Report (160% of GDP). Household debt now amounts to 
63% of GDP. The increase in the household loan stock has been driven by mortgage 
loans, for which average maturities have been extended, and by higher credit demand 
given  decreasing  interest  rates.  Loans  are  based  on  variable  rates,  which  open  the 
customers to the risk of rate increases. 

•  Evidence  of  housing  market  overheating  has  not  been  found  as  the  housing  market 
seems  to  respond  to  structural  changes  in  underlying  supply  and  demand  factors.  In 
addition, house price evolutions do not provide evidence of increased volatility. The 
financial  sector  remains  strong,  statistics  on  loan  quality  are  good  with  a  non-
performing  loan  ratio  below  half  a  per  cent.  The  average  capital  adequacy  ratio  is 
around 15%, offering a considerable buffer to absorb unforeseen shocks as confirmed 
by the EBA stress tests. 

3.  ASSESSMENT OF POLICY AGENDA  

3.1.  Fiscal policy and taxation 

Budgetary developments and debt dynamics 

7

 
 
The  main  budgetary  goal  of  Finland’s  2012  Stability  Programme  is  to  balance  the  central 
government  finances  and  to  reduce  central  government  debt  to  GDP  ratio  significantly  by 
2015,  the  end  of  the  current  parliamentary  term.  As  central  government  deficit  is  the  main 
source of general government deficit, this will contribute to (structural) budget surpluses for 
the general government. To fulfil these targets, the government is committed to implementing 
adjustment measures with regard to revenues and expenditures, as well as structural reforms. 
Consolidation  measures  taken  during  the  preparation  of  the  2012  budget  and  those  decided 
upon in March 2012, to be implemented in 2013, demonstrate the government's commitment 
to implement this strategy. Since 2009, Finland’s medium-term objective has been defined as 
a  structural  surplus  of  0.5%  of  GDP.  The  medium-term  objective  adequately  reflects  the 
requirements of the Stability and Growth Pact.  

In  2011,  the  recommendation  was  to  continue  the  fiscal  consolidation  using  any  windfall 
revenue to reduce the deficit, while taking additional measures to maintain the fiscal position 
above  the  medium-term  objective,  in  particular  through  compliance  with  the  medium-term 
expenditure benchmark. The Finnish government has demonstrated strong commitment with 
regard to fiscal consolidation and keeping expenditure growth under control. This resulted in 
a  general  government  deficit  reaching  -0.5%  of  GDP  for  2011  –  better  than  the  target  of  -
0.9% of GDP announced in the 2011 stability programme. Government revenues turned out to 
be higher and expenditures somewhat lower than forecast, although part of this expenditure 
will be made in 2012. The 2012 stability programme projects the 2012 deficit to deteriorate to 
1.1% of GDP, worse than the deficit of 0.7% of GDP forecast in the previous Programme, on 
account of a downward revision in real GDP growth from 2.7% to 0.8%. Over the remainder 
of  the  Programme  period,  the  deficit  is  projected  to  narrow,  reaching  budgetary  balance  by 
2015.  

The  aim  is  to  reach  fiscal  consolidation  through  both  expenditure-  and  revenue-related 
measures. For nominal central government expenditure a ceiling has been introduced aiming 
at average growth of 1% during 2012-16. On the revenue side, in order to achieve the fiscal 
adjustment in 2013, the government decided in March 2012 on the following measures to be 
implemented  as  from  2013:  i)  to  increase  the  VAT  rate  across  the  board  by  1  percentage 
point, ii) to introduce a temporary solidarity tax on high incomes and iii) to suspend the index 
adjustments  of  labour  income  taxation  in  2013  and  2014.  The  Commission  estimates  the 
output  gap  to  be  smaller  than  forecast  in  the  stability  programme,  resulting  in  a  lower 
structural  balance for  the coming  years. As a consequence, the Commission's assessment of 
the structural balance1 based on the programme is that the MTO was met in 2011 but will not 
be met in subsequent years.  

For  2012,  the  stability  programme  forecasts  that  the  real  growth  rate  of  government 
expenditure,  net  of  discretionary  revenue  measures,  will  not  exceed  the  reference  medium-
term rate of potential GDP growth (1.45%). Given that as from 2012 the MTO is not met, the 
lower  reference  rate  of  0.51%  applies  to  growth  of  government  expenditure  for  the  period 
2013-16.  According  to  the  Commission  services'  forecast,  this  reference  rate  is  not  met  in 
2013 and 2015, but the deviation is not significant in 2013 but reaches close to 0.5% of GDP 
in  2015.  Reducing  the  deviation  in  2015  could  be  needed  to  ensure  structural  adjustment 
towards the MTO by 0.5% of GDP.  

1 Cyclically adjusted balance net of one-off and temporary measures, recalculated by the Commission services 
on the basis of the information provided in the programme, using the commonly agreed methodology. 

8

 
 
                                                 
In  the  2011  stability  programme,  general  government  gross  debt  was  seen  as  growing  and 
forecast to reach 56.2% of GDP in 2015. According to the current programme, the debt level 
will peak in 2014 at close to 52% of GDP and then start declining. This is achieved despite a 
less  favourable  macroeconomic  environment  in  the  2012  programme  (compared  with  the 
2011  programme),  namely  significantly  lower  GDP  growth,  a  weaker  labour  market  and 
Finland  becoming  a  net  borrower  from  the  rest  of  the  world.  Due  to  the  consolidation 
measures  and  the  macroeconomic  scenario  being  broadly  in  line  with  the  European 
Commission 2012 Spring Forecast, the envisaged development of the debt ratio appears to be 
realistic.  Since  Finland's  debt-to-GDP  ratio  is  below  the  reference  rate  of  60%  of  GDP,  the 
debt reduction benchmark is not applicable.  

Box 2. Main budgetary measures 

  Revenue 

Expenditure

2012 

•  Additional 

from 
government programme (0.2% of GDP) 

expenditure 

•  Expenditure  cuts  arising 

the 
government  programme  (0.2%  of  the 
GDP) 

from 

•  Decrease  in  earned  income  taxation  (-

0.3% of GDP) 

•  Decrease in corporate tax rate (-0.2% of 

GDP) 

•  Increase in energy taxes (0.2% of GDP) 

•  Increase in indirect taxes – VAT, excise 

tax, vehicle tax (0.2% of GDP) 

•  Increase in social security contributions 

(0.3% of GDP) 

2013 

•  VAT increase by 1pp (0.4% of GDP) 

•  Budget cuts (0.6% of GDP) 

•  Increase  of  taxes  on  earned  income 

(0.1% of GDP) 

•  Decrease of corporate tax rate (-0.1% of 

•  Expenditure increase for the promotion 
of employment, business and education 
(0.1% of GDP) 

GDP) 

•  Introduction  of  tax  to  finance  Finnish 
Broadcast company (0.2% of GDP) 

  Note: The budgetary impact in the table is the impact reported in the programme and the latest economic 
survey  of  the  Ministry  of  Finance,  i.e.  by  the  national  authorities.  A  positive  sign  implies  that 
revenue / expenditure increases as a consequence of this measure. The degree of detail reflects 
the type of information made available in the stability programme. 

9

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
Long-term fiscal sustainability 

Finland’s  long-term  change  in  age-related  expenditure  is  clearly  above  the  EU  average. 
However,  the  initial  budgetary  position  offsets  the  long-term  costs.  Moreover,  the 
accumulated pension fund assets reduce the sustainability risks to some extent. Under a no-
policy-change  assumption,  debt  would  stabilise  at  48%  of  GDP  by  2020.  Given  the  high 
projected  increase  in  age-related  expenditure,  the  focus  should  be  on  containing  long-term 
public spending trends, notably pensions and care-related expenditure, in order to diminish its 
sustainability  gap.  Ensuring  sufficient  primary  surpluses  over  the  medium-term  and  beyond 
would improve the sustainability of public finances.  

Fiscal framework 

Finland’s  fiscal  framework  is  currently  anchored  to  multiannual  expenditure  ceilings.  The 
system  is  linked  to  parliamentary  terms,  and  experience  with  the  framework  suggests  that 
governments abide by the rules. 

This  general  government  objective  has  been  translated  into  a  fiscal  rule  by  a  government 
decision  on  central  government  spending  limits  for  2013–2016.  In  essence,  this  decision 
defines the multiannual financial framework. Subsequent yearly decisions on annual ceilings 
follow on from this framework. 

The  rule  sets  annual  limits  to  government  expenditure  from  2013  to  2016  in  2012  prices. 
However,  neither  balanced  budget  requirements  nor  limits  to  annual  deficits  are  set  by  the 
rule.  According  to  the  decision,  central  government  expenditure  included  in  the  spending 
limits  should  decrease,  in  real  terms,  by  0.35 %  in  2015  compared  to  2012.  This  policy 
undertaken by the government is in line with the consolidation recommendation. It provides 
an ambitious target to control the costs of the budget while maintaining enough flexibility to 
respond to changes in the economic environment. The framework includes built-in automatic 
stabilisers. 

The framework is currently under review. Finland’s EPP commitment is to make the spending 
limits procedure stricter and to apply the limits to total public finances. At the moment, social 
security  funds  and  municipalities  operate  outside  the  system  of  expenditure  limits. 
Municipalities are subject to a rule that requires a balanced budget over a four-year period but 
are  free  to  decide  on  expenditure  growth  that  can  be  financed  by  increasing  local  taxes. 
However,  municipalities  are  most  affected  by  the  increasing  ageing  related  expenditure,  as 
majority  of  medical  and  social  services  are  provided  by  them.  Thus  it  is  increasingly 
important to apply the expenditure ceiling system also to this sector. 

Tax system 

The Finnish government has taken important tax policy measures in both 2011 and 2012. The 
2011  measures  correspond  to  the  AGS  priority  on  growth-friendly  fiscal  consolidation  and 
include  a  modest  cut  of  labour  taxation,  while  several  excise  duties  (on  energy,  alcohol, 
tobacco and sweets) were increased. The cut in the corporate income tax (CIT) rate in 2012 is 

10

 
 
 
 
meant  to  improve  competitiveness,  while  the  increases in capital income  taxes  are aimed at 
reducing the discrepancy between the tax rates on labour and capital income.2 

In March 2012, the government decided to increase the VAT rate from 2013 across the board 
 750 million). This will have a strong positive impact 
by 1 percentage point (revenue impact €
on  fiscal  consolidation.  Increasing  social  security  transfers  and  reducing  taxes  on  lowest 
incomes will partially mitigate the negative impact on private consumption and employment. 

Regarding  labour  income  taxation,  in  2011  the  government  reduced  the  top  marginal  tax 
rate by 0.25 percentage points and increased earned income allowances in both municipal and 
state  taxation.  These  changes  are  in  accordance  with  the  EPP  commitment  to  improve  the 
incentives  to  work  and  with  the  AGS  recommendation  to  reduce  labour  taxes.  In  2012,  the 
government  decided  to  forego  the  index  adjustments  of  taxation  in  2013  and  2014  and 
introduced  a  temporary  solidarity  tax  on  high  incomes,  applicable  as  from  2013.  Thus,  the 
effective tax rate will be increased, in line with consolidation needs but increasing taxes on 
labour. 

On  capital  income  taxation,  two  main  measures  were  taken:  an  increase  in  the  tax  rate  on 
capital income from 28 % to 30 % and to 32 % for incomes exceeding €
 50 000 and a reduction 
of  the  threshold  for  tax-exempted  dividends  from  90 000€  to  60  000€  for  non-listed 
companies.  The  measures  are  in  line  with  fiscal  consolidation  requirements  as  well  as  the 
need to decrease the discrepancy in the tax rates between labour income and capital income. 

The tax deductibility of mortgage interest rate payments will be gradually decreased up to 
2014, so that the share of deductible interest payments will decrease to 85 % in 2012, to 80 % 
in 2013 and to 75 % in 2014. This corresponds to the AGS priority that concerns reducing the 
debt  bias  in  housing  taxation.  Although  the  measure  will  reduce  the  debt  bias,  it  will  not 
remove it entirely. 

The government has reduced the corporate income tax rate from 26 % to 24.5 % with the aim 
of  improving  the  competitiveness  of  Finnish  industry  (EPP  commitment).  With  this  reform, 
Finland’s  corporate  income  tax  (CIT)  rate  will  be  slightly  above  the  EU  average  (23.1 %). 
This is in line with the EPP commitment to  enhance the competitiveness and investment of 
Finnish  companies.  The  FDI  (foreign  direct  investment)/GDP-ratio  is  currently  very  low  in 
Finland and the lower CIT rate could attract foreign companies and more investments. 

The  aim  of  the  structural  reform  of  energy  taxation,  in  force  since  2011,  was  to  shift  the 
emphasis  of  Finland’s  energy  taxation  towards  CO2.  The  taxation  of  heating  and  transport 
fuels is based on the energy content and carbon dioxide emissions. Taxes on coal and natural 
gas have been increased significantly (by about 100 %), the CO2 component has been further 
strengthened and tax rates on transport fuels are increased by 10 % in two stages (2012 and 
2014).  The  refund  scheme  for  agriculture  (fuel tax  rebate) was based on the  energy content 
and  a  gradually  increasing  tax  on  peat  was  introduced.  Vehicle  taxes  (registration  tax  and 

2  In  the  Finnish  dual  income  tax  system  capital  income  is  taxed  at  a  flat  rate,  which  is  much  lower  than  top 
marginal tax rates on labour income. This provides an incentive to use tax planning measures to transform 
earned income to capital income in non-listed companies. Moreover, dividend income in non-listed (but not 
listed) companies is tax free up to a ceiling, which is discriminating against incorporation and may form an 
obstacle to growth for successful firms. The decrease of the tax-free ceiling for dividends and the increase 
of  capital  income  tax  rate  will  to  some  extent  reduce  these  distortive  elements  in  the  capital  income  tax 
system. 

11

 
 
                                                 
annual  circulation  tax)  have  been  increased  and  made  more  CO2-dependent.  From  the 
perspective of the climate target, where progress is still needed in order to achieve the goal, 
these are steps in the right direction. 

In  addition,  the  government  is  committed  to  phasing  out  environmentally  harmful 
subsidies.  One  example  is  the  abolition  of  the  tax  exemption  from  the  state  waste  tax  for 
industrial  landfills.  However,  the  refund  system  on  energy  tax  payments  for  industry  was 
extended in 2011 so that 85 % of energy taxes paid are refunded when the taxes paid exceed 
0.5 % of the value added (previously 3.7 %). The measure aims to protect the competitiveness 
of energy-intensive industry, but is also a form of environmentally harmful subsidy. 

The action programme to fight the shadow economy and economic crime was launched on 
19 January 2012. It contains 22 measures and is being implemented in close cooperation with 
the tax authorities and the police. The main focus is on the construction sector, but measures 
are also being taken to tackle aggressive tax planning and tax evasion through international 
operations by companies. The programme aims at increasing the government’s tax revenue by 
EUR 300 – 400 million per year. 

The  government  has  adopted  policy  measures  that  are  in  line  with  the  recommendation 
regarding  fiscal  consolidation  and  the  AGS  priority  of  growth-friendly  consolidation.  The 
increases  in  VAT,  excise  duties  and  environmentally-related  taxes  correspond  to  the  AGS 
priorities  to  shift  towards  consumption  taxation,  develop  environmentally-friendly  taxation 
and move away from labour taxation, while also contributing to consolidation needs. 

3.2.  Financial sector 

Banking 

The financial sector remains strong and current statistics on loan quality are good. Banks have 
no difficulties in financing their operations and enterprises do not consider lack of credit as 
one of their most serious problems. No Finnish institutions were below the required threshold 
of 5 % core Tier 1 capital following the July 2011 European Banking Authority (EBA) stress 
test nor did they have to comply with the higher minimum core Tier 1 capital ratio of 9 % of 
risk-weighted  assets  following  the  temporary  recapitalisation  plan  decided  by  the  European 
Council in October 2011. 

The share of housing loans has increased in recent years. The loan stock has grown rapidly 
with the help of decreasing interest rates and lengthening average maturities. Mortgage loans 
in Finland are largely based on variable interest rates, so customers face the risks of interest 
rate increases (although this seems to be attenuated by clauses that would extend maturity in 
such cases). In the current environment, private consumption is supported by the reduction in 
mortgage payment thanks to historically low interest rates in the euro area and the relatively 
low margins of local banks. 

Access to finance 

Finland performs above the EU average on access to finance for SMEs. However, small and 
medium-sized firms in particular are experiencing greater financial problems than before the 
economic  recession.  Thus,  additional  financing  for SMEs is  needed to supplement what  the 
financial markets can provide. Policy responses to the economic and financial crisis include 

12

 
 
creating and extending loan and guarantee schemes, as well as strengthening the capital base 
and  private  equity  and  venture  capital.3  The  Finnish  government  and  the  Export  Credit 
Agency  decided  to  allocate  to  SMEs  an  additional  €
 700  million  in  investment  loans.  A 
venture capital initiative co-financed by the  European Regional Development Fund (ERDF) 
was  set  up  in  2011,  targeting  innovative  SMEs.  In  February  2011,  the  Finnish  government 
and  the  Export  Credit  Agency  introduced  easier  repayment  terms  for  government  loans  to 
small businesses to help them weather the economic recession. Firms now have ten years to 
repay loans obtained under this scheme instead of six. 

These policy measures are relevant for the 2012 AGS priority of restoring normal lending to 
the economy and Finland’s EPP commitment to diversify the economic structure. Although it 
is too early to assess the ambition level or impact of recent policy measures, the relevance and 
credibility criteria seem to be fulfilled. 

3.3.  Labour market, education and social policies 

The  Finnish  labour  market  is  facing  important  demographic  changes  that  will  have  a 
significant impact on the way it operates over the next few years. The working-age population 
is projected to decline by over 5 % of the current labour force by the end of the decade. Thus 
in 2011, the Council recommended to improve the employability of older workers and their 
participation in lifelong learning and to consider a link between the statutory retirement age 
and life expectancy. 

The Finnish government has introduced reforms that have had a positive impact. The effective 
retirement age is rising, working careers are getting longer and the employment rate of people 
aged 55–64 rose from 41.6 % in 2000 to 56.2 % in 2010.4 The employment rate of the 60–64 
age  group,  however,  was  only  40.8 %.  The  increase  in  life  expectancy  has  been  more  rapid 
than was envisaged during the 2005 pension reform, and the current statutory retirement age 
range might need to be adapted accordingly to ensure long-term sustainability of financing. 

In  2011,  the  government  programme  confirmed  the  2009  target  of  the  labour  market 
organisations and government to raise the effective retirement age by at least three years from 
the 2008 level by 2025, i.e. to 62.4 years5. To avoid a major decline in future pension levels 
and to boost labour supply, the programme also stresses the need to extend working careers at 
the  beginning,  in  the  middle  and  towards  the  end,  and  includes  measures  to  enhance  adult 
education.6  In  recent  months,  steps  have  been  taken  to  achieve  these  targets.  At  the  end  of 
March  2012  labour  market  organisations  reached  an  agreement  to  develop  and  upgrade 
working  life  and  skills.  They  also  agreed  on  measures  to  limit  early  exits  from  the  labour 
market:  raising  the  age  limit  for  part-time  pensions  from  60  to  61  years  and  that  for  the 
‘unemployment tunnel’ by one year; limiting early retirement opportunities; and reinforcing 

3 OECD http://www.oecd.org/dataoecd/40/34/43183090.pdf. 

4 EU average: 46.3 %. 

5 In 2010, this was 60.4 years. 

6 Participation in lifelong learning in Finland was 23 % in 2010, one of the highest in the EU. For 55–64 year 
olds, however, it was 13 %. 

13

 
 
 
                                                 
older  workers’  obligations  to  take  part  in  activation  measures.  The  National  Reform 
programme  2012  lists  the  changes  to  be  taken  in  2014-2015  but  does  not  go  into  details  as 
regards their impact. The steps taken can be expected to extend working careers and are thus 
clearly a measure to extend the working careers. However, underpinning pension reforms by 
implementing measures in work places and labour markets remains a challenge. 

Pensions  are  calculated  based  on  life  expectancy  and  years  worked.  The  system  provides 
strong economic incentive to work longer to earn higher pension, but no measures have been 
taken to link the statutory retirement age directly to increased life expectancy. Another way of 
lengthening working careers would be to shorten the traditionally long duration of studies, in 
particular  in  higher  education  (one  of  the  longest  in  all  OECD  countries),  in  order  to 
accelerate graduation and increase the overall effectiveness of the education system. 

In 2011, the Council also recommended Finland to target active labour market measures more 
towards the long-term unemployed and young people. 

To  address  the  recommendation  to  focus  on  the  long-term  unemployed,  a  fixed-term  pilot 
programme  lasting  until  the  end  of  the  government’s  term  is  being  launched.  Primary 
responsibility  for  management  of  an  individual’s  employment  support  will  be  transferred  to 
the  municipality  after  12  months  of  unemployment.  All  unemployed  people’s  individual 
chances of employment will be assessed and their progress actively monitored. 

To  address  youth  unemployment,  the  Government  will  reinforce  the  social  guarantee  for 
young  people,  originally  introduced  in  2005:  all  young  people  under  25  and  all  recent 
graduates  under  30  will  be  provided  with  a  job  or  training,  study  placement,  workshop  or 
rehabilitation  placement  no  later  than  three  months  into  unemployment.  Implementing 
measures are being prepared and the guarantee will be fully operational by the end of 2013. 

These  measures  seem  relevant,  ambitious  and  credible  in  view  of  the  targeted  budget 
allocations7  and  rapid  implementation  schedule  planned  and  can  be  expected  to  have  a 
positive  impact.  The  measures  are  in  accordance  with  the  priorities  of  the  2012  Annual 
Growth  Survey  and  they  are  also  confirmed  in  the  National  Reform  Programme  2012.. 
However,  while  the  overall  unemployment  rate  decreased  between  2010  and  2011,  youth 
unemployment was still 19.9 % at the end of 2011.8 By the end of 2011, the number of long-
term  unemployed  who  had  been  unemployed  without  interruption  for  more  than  a  year  had 
dropped  to  below  2 %,  but  the  number  of  those  unemployed  without  interruption  for  more 
than  two  years  had  increased  considerably.9  Moreover,  while  the  activation  rate  of  the 

7  For  the  pilot  programme,  EUR 5 million  has  been  allocated  in  2012.  In  subsequent  years  the  sum  will  be 
EUR 20 million. Furthermore, the participation of the long-term unemployed in wage-subsidised work, training 
and  other  services  will  be  increased  by  allocating  a  supplementary  appropriation  of  EUR 20 million  for  this 
purpose. A total of EUR 60 million/year is to be allocated to implementation of the social guarantee, of which 
EUR 5 million  to  on-the-job  training  of  young  people  and  youth  outreach  work,  aimed  at  identifying  young 
people  at  risk  of  exclusion  as  early  as  possible  and  offering  them  individualised,  low-threshold  services.  In 
addition  to  the  social  guarantee,  in  2013  some  EUR  27  million  will  be  allocated  to  young  people  under  30 
without a degree to study for a vocational degree. The allocated sum will increase to EUR 52 million per year 
for the period of 2014-2016. 

8 Statistics somewhat exaggerate the problem as Finnish unemployment numbers also include full-time students 
who are looking for a part-time job in addition to their studies. 

9 From 19 500 in 2010q3 to 22 700 in 2011q3 (national data). 

14

 
 
                                                 
unemployed in general was over 30 % in 2011, it was 10.7 % for the long-term unemployed. 
Thus, the measures must be implemented thoroughly, with a clear focus on ensuring that they 
lead to a permanent improvement in the skills levels and labour market position of the target 
groups. 

The Finnish education system is performing well in terms of both the quantitative targets and 
the  quality  of  educational  outcomes,  as  measured  by  PISA.  Moreover,  Finland  has 
traditionally  a  relatively  high  adult  participation  rate  in  lifelong  learning.  Nevertheless, 
increasing the responsiveness of the education and training system to labour market needs and 
reducing youth unemployment remain major difficulties. The economic crisis is reflected in a 
sharp increase in skills mismatches in the overall labour force between 2007 and 2010. 

 The overall policy objective of the Finnish government is strongly focused on reducing social 
exclusion  through  labour  market  integration.  Nevertheless,  the  rate  of  young  people  not  in 
employment, education or training (NEET) was 9.0 % in 2010. Although this is below the EU 
average, it grew by 1.2 pp from 2008 to 2010 and the risk is considerably higher for young 
people with migrant background.10 This has serious implications for the social inclusion of a 
vulnerable group. The risk of poverty among young people is also increasing, often as a result 
of  long-term  unemployment  or  difficulties  in  entering  the  labour  market  in  the  first  place. 
Reducing poverty, inequality and social exclusion is one of the government’s priorities, and 
as  part  of  the  national  implementation  of  the  Europe  2020  Strategy,  the  government  will 
launch a programme to prevent exclusion, poverty and health problems. These priorities are 
confirmed in the 2012 National Reform Programme. 

The  share  of  ESL  (early  school-leavers),  which  was  10.3 %  in  2010,  is  below  the  EU-27 
average  (14.1 %).  Nonetheless,  this  indicator  increased  by  0.5  percentage  points  between 
2008 and 2010, potentially jeopardising the Europe 2020 target of reaching a rate under 10%. 
Development of specific instruments targeting migrant groups, especially recent immigrants, 
would further reduce the current ESL rate. 

In  2010,  45.7 %  of  30-34  year-olds  had  tertiary  attainment,  which  is  well  above  the  EU 
average. However, the plan to exclude from the indicator the technical qualifications awarded 
by the ‘applied sciences universities’ will bring the figure down to 37-38 %. In this context, 
Finland’s  target  is  to  raise  the  proportion  of  30–34  year-olds  having  completed  tertiary 
education to 42 % by 2020. This target seems to be attainable. 

Adult  participation  in  lifelong  learning  (23 %  in  2010)  is  among  the  highest  in  Europe  in 
comparison with an EU average of 9.1 %. Traditionally, lifelong learning provision has been 
rich in Finland. The participation rate of older workers however is much lower.11 Given the 
demographic challenges in Finland, such measures are also relevant to keeping this age group 
active on the labour market longer. 

Investment in education and training as a percentage of GDP increased slightly in Finland and 
exceeded the EU average by over 1 percentage point in 2008. Finland’s funding priorities for 
education  and  training  are  in  line  with  the  2012  Annual  Growth  Survey  (AGS)  and  the 

10 Ministry of Employment and the Economy 2011. Nuoret työmarkkinoiden ja opiskelun ulkopuolella. 

11 For the 50-64 age group participation is only ca. 15% in comparison to 23% for the age group 25-64. 

15

 
 
                                                 
Conclusions of the Spring European Council, which advised growth-friendly investment also 
in times of economic crisis and fiscal consolidation. Cutting down the length of studies and 
speeding  up  graduation  in  higher  education  could  also  have  a  positive  impact  on  the 
efficiency of public spending in this sector. 

3.4.  Structural measures promoting growth and competitiveness 

Internal market, liberalisation and competition 

With  regard  to  structural  measures,  in  2011  the  Council  recommended  that  additional  steps 
should  be  taken  to  open  up  the  services  sector  further,  by  redesigning  the  regulatory 
framework and removing restrictions in order to facilitate new entries into services markets, 
especially in the retail sector. 

Lack of competition in services, and in the retail sector in particular, was identified in the 
2011  SWD  as  an  important  issue.  In  Finland,  restrictions  on  competition  are  mainly 
structural. Previous studies have identified issues in the protection of existing firms, licencing 
of  commercial  activities  and  regulation  of  large  outlets.  Retailers  tend  to  use  their  strong 
position in relation to suppliers in several ways that may be considered questionable for sound 
and effective economic competition.12 

There  have  been  some  policy  developments  on  competition,  such  as  the  amended  national 
competition  law,  and  a  new  law  on  land-use  planning  and  construction.  In  2011,  the 
Competition  authority  report  highlighted  the  importance  of  ensuring  competition  neutrality 
between  municipal  and  private  undertakings  competing  in  the  same  markets.13  The 
government is taking this work forward in 2012 by launching a new broad-based programme 
on  promoting  healthy  competition.  One  element  of  the  programme  will  be  to  evaluate  the 
impacts of buying power in the daily consumer goods trade, especially in the food sector. The 
amended Competition Act (2011) will provide support for this work. 

The  government  is  also  considering  merging  the  Finnish  competition  authority  with  the 
Finnish Consumer Agency, and perhaps with the National Consumer Research Centre as well. 
As  all  three  bodies  promote  the  functioning  of  markets,  combining  them  could  strengthen 
market  research  and  analysis.  The  overall  aim  of  the  merger  is  to  increase  the  impact  of 
competition and consumer issues in Finland. However, it could also bring benefits in terms of 
efficiency. 

The  government  will  also  examine  the  possibility  of  enhancing  deterrence  by  imposing 
criminal responsibility on people found guilty of cartel violations. Whereas, on balance, the 
introduction of sanctions on individuals may not lead to more effective enforcement overall, 
the fining of undertakings remains an indispensable ingredient for ensuring compliance with 
competition rules. 

While  some  progress  has  been  made,  there  is  still  scope  for  action,  for  example,  in  the 
following areas: 

12 Press release in EN: According to a recent study on buying power in the daily consumer goods trade published 
by the Finnish Competition Authority: 
http://www.kilpailuvirasto.fi/cgi-bin/english.cgi?luku=news-archive&sivu=news/n-2012-01-10.. 

13 Kilpailuvirasto 2011; Kilpailukatsaus 2: viisas sääntely – toimivat markkinat; 

16

 
 
                                                 
 
-  Following  up  the  Finnish  Competition  Authority’s  report  on  buying  power  in  daily 

consumer goods trade. 

-  Competition  in  the  retail  sector  would  benefit  from  less  restrictive  zoning  and 
planning  regulations.  Despite  the  new  law  on  land-use  planning  and  construction 
(2011), there is still room for improvement in facilitating entry to the services sector, 
especially in retail trade. 

Research and innovation 

Finland is an innovation leader showing an above the average innovation performance in the 
EU.14 However within the past few years, especially the reorganisation of the R&D intensive 
ICT  sector  is  transforming  into  a  major  structural  change  having  in  the  short  term  a  direct 
impact  on  the  business  R&D  intensity  development.  As  the  Finnish  economy  and  export 
sector  currently  are  going  through  major  changes,  the  Finnish  Government’s  objective  is  to 
maintain the national EU2020 R&D target at 4% of GDP. The Government intends to exploit 
the growth and renewal opportunities offered by structural change within the ICT sector. In 
2012, a new high-level expert task force ‘Finnish ICT Cluster 2015’ has been established to 
evaluate  structural  change  and  growth  potential  in  the  ICT  sector  in  Finland  and 
internationally. It will assess the potential for utilising ICT know-how in other industries in 
Finland, including the public sector, and propose an action plan for the ICT sector. 

The Finnish government awards relatively high subsidies towards entrepreneurship, R&D and 
innovation.  While  direct  public  funding  on  R&D  will  be  slightly  cut  in  2012  and  business 
R&D  spending  is  expected  to  decline,  the  national  innovation  system  is  being  reformed  to 
improve its effectiveness and to refocus its priorities. The focus is being shifted to growth 
oriented SMEs and internationalisation.15 The planned introduction of an R&D tax incentive 
in 2013 is representative of the on-going paradigm shift from direct to indirect R&D aiming at 
improving the leverage effect of public investments. Wider use of financial instruments would 
help  leverage  national  resources  as  well  as  Structural  Funds.  The  current  demand  and  user-
driven  innovation  policy  Action  Plan  2010-2013  will  be  assessed  in  a  mid-term  report 
planned in 2012. Evaluation of the effectiveness of the innovation system is also carried out 
in  other  areas.  For  example,  independent  evaluations  of  the  Finnish  Funding  Agency  for 
Technology  and  Innovation  (Tekes),  Finnvera  (Export  Credit  Agency  of  Finland),  the 
Academy of Finland, and the Strategic Centres of Science, Technology and Innovation will be 
carried out by 2013. For strategic steering, a Government working group has been established 
for coordination of research, foresight and assessment activities. An independent expert group 
will  give  its  proposal  to  the  national  Research  and  Innovation  Council  by  the  end  of  May 
2012 concerning structural reorganisation of Central Governmental research institutions. 

Finland’s  innovation  policy  and  measures  in  general  are  geared  towards  speeding  up  the 
development,  commercialisation  and 
technologies.  Key  Enabling 
Technologies  (KETs)  are  an  integral  part  of  public  technology  and  innovation  programmes 
funded  by  Tekes,  and  the  Technical  Research  Center  of  Finland  (VTT)  and  Finnish 
universities  have  competencies  in  all  KETs.  A  new  strategic  programme  on  promoting 

take  up  of  new 

14 Innovation Union Scoreboard, 2011. 

15  The  share  of  high-growth  innovative  companies  in  Finland  remains  a  key  policy  priority  in  the  new 
Government  Programme.  Despite  Finland’s  technological  sophistication,  its  current  performance  in 
nurturing high-growth companies could be improved. 

17

 
 
                                                 
Finnish  cleantech  business  has  been  launched  in  2012,  which  complements  the  existing 
Strategic Programmes for the Forest Sector and the Welfare Sector.  

Overall  the  reforms  of  the  national  innovation  system  seem  to  be  well  in  line  with 
Government innovation guidelines for 2011-2015. However, a strong policy commitment will 
be  needed  also  in  the  future  to  carry  out  the  reforms  in  a  rapidly  changing  environment. 
Notwithstanding  the  past  strong  Finnish  R&D  and  innovation  performance,  without  a 
significant increase in the number of innovative high growth entrepreneurial firms, Finland’s 
ranking as an EU innovation leader risks declining. In the short term, it will also be crucial to 
exploit  and  disseminate  the  extensive  ICT  know-how  also  in  other  industries  in  Finland, 
including  the  public  sector.  Moreover,  attracting  Foreign  Direct  Investment  (FDI)  is  an 
increasingly  important  topic  since  tangible  investments  in  manufacturing  in  Finland  have 
been contracting more than in other EU countries. By 2013 a report is expected on Finland’s 
model  for  sustainable  growth,  which  will  provide  an  important  contribution  to  the  multiple 
reforms. 

Finland undertakes to programme the next generation of the EU Structural Funds’ strategies 
more  closely  in  line  with  the  Europe  2020  strategy.  The  contribution  from  the  Funds  is 
relatively  small  in  comparison  to  national  public investments  in Finland, but the scarcity of 
national resources allocated to regional development underlines the importance of the Funds 
in  this  sphere.  The  support  is  concentrated  on  thematic  priorities  linked  to  smart  growth 
(45 %) and inclusive growth (30 %). Smart growth resources have been allocated mainly to: 
promoting innovation and smart specialisation (16 %); removing obstacles to growth of SMEs 
(11 %);  and  strengthening  RTD  (10 %).  Under  inclusive  growth,  developing  a  skilled 
workforce responding to labour market needs and promoting lifelong learning represent 21 % 
of the total and promoting social inclusion and combating poverty represent 7 %. Experience 
in  implementing  the  Structural  Funds  in  Finland  highlights  the  need  for  better  coordination 
within the country and with neighbouring Member States, in particular in the context of the 
EU Strategy for the Baltic Sea Region. 

Energy, transport, infrastructure and environment 

Finnish  energy  policy  is  broadly  in  line  with  the  main  European  policy  guidelines. 
Considering its economic structure and climate conditions, the energy efficiency level of the 
country  is  good.  In  accordance  with  the  RES  Directive,  Finland  has  committed  itself  to  a 
target of 38 % of renewable energy sources in final energy consumption and a 10 % share of 
renewable  energy  in  the  transport  sector  by  2020.  To  meet  these  targets,  the  country  relies 
heavily on biomass. 

Finland should finalise transposition of the Renewable Energy Sources Directive and notify 
all transposition measures to the Commission as soon as possible. Finland should also submit 
its Progress Report, which was due in December 2011, pursuant to Article 22 of the Directive. 

Finland is a major importer of Russian electricity and an interconnection with Estonia is being 
developed.  Finland  sees  greater  use  of  nuclear  energy  and  renewable  energy  sources  as  a 
means to reduce its energy dependence. Regarding gas supply, interconnection with Estonia 
could still be beneficial, as it would increase the size of the regional gas market.  

Under the Europe 2020 Strategy, Finland has committed itself to reducing greenhouse gas 
(GHG) emissions in non-ETS (emission trading scheme) sectors by 16 % (compared to 2005) 
by  2020.  Up  to  2010,  emissions  were  reduced  by  5.0 %  (compared  to  2005).  According  to 

18

 
 
Finland’s  latest  projections  based  on  existing  measures,  the  country  is  expected  to  reduce 
GHG emissions by 13.1 % (compared to 2005) by 2020, thereby falling short of the target by 
2.9 pp. 

Further reductions  in direct and  indirect GHG emissions  could be achieved by 2020 by full 
implementation  of  the  existing  EU  waste  legislation,  leading  to  reductions  of  between  1.5 
(full  implementation)  and  2.6  Mt  CO2eq  (optimised  scenario)  compared  to  their  2004  level 
(equivalent  to  2 %  —  3.3 %  of  total  GHG  emissions).  Furthermore,  such  measures  could 
create more than 4 800 jobs in Finland and increase the annual turnover of the waste sector by 
over EUR 500 million. 

The 2011 Commission Staff Working Document already indicated that further steps to trigger 
energy efficiency refurbishments of existing buildings would be useful. According to the new 
coalition government’s programme adopted in June 2011, one of the government’s objectives 
is to secure energy-efficient cogeneration of electricity and heat (district heating and cooling), 
as well as to improve the existing energy grant scheme for residential buildings, so that even 
those  on  low  incomes  will  have  the  opportunity  to  replace  heating  systems  with  renewable 
sources and carry out energy renovations.  

The main objective in transport is to provide sufficient capacity for the increasing needs of 
freight  and  passenger  transport  while  achieving  the  national  GHG  target.  Given  the 
continuing growth since 1990, and the overall importance of the sector regarding emissions in 
non-ETS sectors, Finland may still need to design and implement further regulatory measures 
to reduce emissions from transport. Major work is already in progress on the road and railway 
networks, in ports and at border stations. 

3.5.  Modernisation of public administration 

Finland was ranked the best performing country on government effectiveness in the EU27 in 
2011,  with  excellent  scores  in  the  quality  of  public  administration  in  general,  thanks  to  its 
regulatory system, impartiality, and quality of services.16 However, supporting flexibility and 
encouraging more competition in shielded private and public service sectors through further 
product  and  labour  market  deregulation  would  contribute  to  stronger  productivity.  Thus, 
public  sector  productivity  could  be  enhanced  by  offering  a  wider  choice  of  services  to 
citizens. Providers of services could be selected through public procurement. 

In the area of public administration, the Council recommended that further measures should 
be taken to achieve productivity gains and cost savings in public service provision, including 
structural changes, in order to respond to the challenges of an ageing population. The Finnish 
government  has  introduced  a  proposal  for  a  nation-wide  municipal  reform.  The  legislative 
amendments required by the reform will be made in 2013 and 2014. The proposal is to merge 
municipalities,  thus  creating  stronger  and  more  efficient  structures  for  public  service 
provision. 

Population ageing will lead to a significant rise in demand for ageing-related services, which 
are  mostly  provided  by  local  governments  in  Finland.  Various  studies  have  found  that 

16 World Bank Governance Indicators 2011. 

19

 
 
 
                                                 
productivity  improvement  in  public  services  has  been  in  decline  over  the  past  decade 
compared  to  other  parts  of  the  economy.  The  Finnish  authorities  have  already  implemented 
several reforms to redesign public service structures and boost productivity at both the central 
and  local  government  levels.  They  are  being  implemented  gradually,  especially  at  the  local 
government level, where their impact will take several years to materialise. For instance, the 
relatively large investments in IT in the public sector have not yet shown up in productivity 
improvements, implying the need for additional structural and managerial changes. 

According  to  its  programme,  the  Finnish  government  intends  to  modernise  public 
administration.  Initiatives  other  than  territorial  reform  include  improvements  to  the  impact, 
effectiveness  and  productivity  of  public  services.  In  public  administration,  information 
technology will be updated, joint procurement increased, the efficiency of facilities improved 
and operating practices revised. In 2011 the government launched a broad-based development 
campaign for municipal productivity and effectiveness. In this connection, a set of indicators 
for sustainable municipal productivity will be created to assess the quality and effectiveness 
of municipal services. 

The Finnish government is implementing an action plan to reduce the administrative burden 
on  businesses  by  25 %  by  2012,  where  developing  e-government  plays  a  key  role. 
Transactions between businesses and the authorities will be brought together to operate in line 
with  the  ‘one-stop-shop’  principle  and  all  key  business  services  will  be  covered  by  2013. 
There has been progress in some priority areas towards the 25 % reduction target, but overall 
progress  is  slow.  A  follow-up  study  will  be  finalised  in  spring  2012  and  a  government 
decision  on  continuing  the  action  plan  is  expected  in  autumn  2012.  There  is  still  room  for 
improvement with respect to the Finnish point of single contact. The amount of information 
available through the portal is generally very good, but the possibilities for online completion 
of procedures are partly missing. 

There has been considerable progress in e-procurement. A new law on electronic auctions and 
dynamic procurement procedures is expected to reduce bureaucracy while speeding up public 
procurement procedures. There are several e-procurement solutions in Finland and the whole 
procurement  process  can  be  run  electronically  by  all  contracting  authorities.  Electronic 
publication of notices has been obligatory in Finland since 2007 (electronic HILMA portal). 
Access for SMEs is promoted through guidance, which is one of the priorities for the public 
procurement  advisory  unit  funded  partly  by the Ministry of Employment and  the Economy. 
However,  Finland  scores  moderately  well  for  use  of  e-procurement  in  the  stages  before  the 
award of contracts.17 
The new policy measures are relevant for both the AGS 2012 priorities on promoting growth 
and  competitiveness  and  Finland’s  country-specific  recommendation  on  public  sector 
efficiency.  Taking  into  account  the  significance  of  the  problem  in  the  context  of  an  ageing 
population and diminishing labour force, even more ambitious measures might be needed. 

4.  OVERVIEW TABLE  

2011 commitments and summary assessment 

17 ‘Digitising public services in Europe: Putting ambition into action’, 9th Benchmark Measurement, December 
2010. Report prepared for European Commission. 

20

 
 
                                                 
2011 commitments 

Summary assessment 

1.  Continue  the  fiscal  consolidation  using  any 
windfall revenue to reduce the deficit, while taking 
additional  measures  to  maintain  the  fiscal position 
above  the  medium-term  objective,  in  particular 
through 
the  medium-term 
expenditure benchmark. 

compliance  with 

to 

regard 

Finland  has  implemented  the  CSR.  The  medium–term 
objective is to reach a structural surplus of 0.5 % of GDP. 
The  Finnish  government  has  given  strong  commitments 
fiscal  consolidation  and  keeping 
with 
expenditure  growth  under  control.  For  nominal  central 
government  expenditure  a  ceiling  has  been  introduced 
aiming  at  average  growth  of  1 %  during  2012-16. 
According  to  the  2012  Stability  Programme,  the  general 
government  balance  will  be  0  by  2015  (from  -0.5 %  in 
2011). 

2.  Take  further  measures  to  achieve  productivity 
gains and cost savings in public service provision, 
including structural changes, in order to respond to 
the challenges arising from population ageing. 

Finland  has  partially  implemented  the  CSR.  Significant 
local government reform proposals have been introduced. 
A  central  government  productivity  programme  is  being 
implemented. Targets have been set for the programme up 
to 2015.  

3.  Target  active  labour  market  measures  better  on 
the long-term unemployed and young people. 

s
R
S
C

4.  Take  measures  to  improve  the  employability  of 
older  workers  and  their  participation  in  lifelong 
learning.  Take  further  steps,  in  consultation  with 
social  partners  and  in  accordance  with  national 
practices, to encourage older workers to stay in the 
labour  market,  by  measures  to  reduce  early  exit 
and  increase  the  effective  retirement  age.  In  view 
of  the  already  existing  system  of  linking  pension 
benefits to life expectancy, consider a link between 
the statutory retirement age and life expectancy. 

Finland  has  partially  implemented  the  CSR.  From  2012 
and with full implementation from 2013, all young people 
under  25  and  all  recent  graduates  under  30  will  be 
training,  study  placement, 
provided  with  a 
workshop  or  rehabilitation  placement  no  later  than  three 
months into unemployment. 

job  or 

In order to reduce long-term unemployment, a fixed-term 
pilot  programme  has  been  launched  in  which  primary 
individual’s 
for  management  of  an 
responsibility 
employment 
the 
to 
support  will  be 
municipality/municipalities  after  a  12-month  period  of 
individual 
unemployment.  All  unemployed  people’s 
chances of employment will be assessed and their progress 
actively  monitored.  The  share  of  state  funding  will 
provide  an  incentive  to  municipalities  and  will  increase 
with the services offered.  

transferred 

Finland  has  partially  implemented  the  CSR.  Measures 
have  been  taken  to  increase  the  effective  retirement  age. 
In  June  2011,  a  commitment  to  increase  the  effective 
retirement age to 62.4 years by 2025 was included in the 
government  programme.  In  November  2011,  the  social 
partners  concluded  a 
framework  agreement  which 
includes measures to extend working careers and upgrade 
skills. In March 2012, the social partners agreed: to raise 
the  part-time  pension  age  limit  from  60  to  61  years;  to 
limit  early  retirement,  to  raise  pension  contributions  by 
0.4 %  per  year  in  2015-2016  and  to  reinforce  older 
workers’  obligations  to  take  part  in  activation  measures 
and to carry out a pension reform no later than 1.1.2017. 
Topics  to  be  discussed  include  among  other  things  the 
retirement  ages,  starting  age  for  pension  accrual,  early 
retirement schemes and survivors pensions. Underpinning 
pension  reforms  by  implementing  measures  in  work 
places and labour markets remains a challenge. 

Lifelong  learning  measures  could  be  targeted  to  ensure 
adequate provision for up-skilling to older workers.  

5.  Take  further  measures  to  open  up  further  the 
the  regulatory 
service  sector,  by  redesigning 

Finland has partially implemented the CSR. 

21

 
 
 
 
 
 
 
framework  and  removing  restrictions  in  order  to 
facilitate  new  entry  into  service  sector  markets, 
especially in the retail sector. 

Measures have been taken to increase competition, such as 
a  new  national  competition  law,  and  a  new  law  on  land 
use  and  construction.  The  new  competition  law  clarifies 
merger  control,  adjusts  the  leniency  programme  and 
provides  individuals  with  the  right  to  seek  damages.  As 
part  of  its  measures  to  implement  structural  changes,  the 
government will initiate a broad-based project to promote 
healthy  competition  in  Finland.  The  project  will  involve 
several sectors. The amended Competition Act (2011) will 
contribute  to  this  work.  Importantly,  in  implementing  its 
new  competition  act,  it  is  important  to  ensure  sufficient 
deterrence of fines on undertakings 

Recent  information  indicates  that  there  is  still  scope  for 
to 
improvement 
competition and in facilitating entry to the services sector, 
especially in retail trade. 

structural  barriers 

in  addressing 

Ensuring  neutrality  of  competition  between  public 
undertakings  and  private  undertakings  operating  in  the 
same markets is still an issue.  

A  government  proposal  has  been  introduced  for  public 
discussion. Commitment implemented. 

Commitment implemented. 

Strategy not received. 

No information regarding the higher education reform. 

The  new  Strategic  Programme  for  Finland’s  cleantech 
business is being implemented. 

A Business Programme for the Environmental Sector has 
been launched in 2012. 

No information on progress. 

No information on progress. 

comprehensive 

The 
government and services to be initiated in 2011. 

restructuring 

of 

local 

Reimbursement  to  the  businesses  for  the  increase 
in  pension  insurance  contributions  and  co-funding 
for  daily  layoff  allowances  to  facilitate  labour 
market  agreement.  Corporate  tax  rate  will  be 
lowered to 25 %. 

A  working  life  development  strategy  will  be 
prepared  in  early  2012.  Need  for  amendments  to 
the  legislation  concerning  study  leave  will  be 
assessed.  

Finland  undertakes  to  secure  adequate  funding  for 
R&D and innovation, to carry out reform in higher 
education in 2013. 

It  is  foreseen  to  launch  environment  related 
business programme in autumn 2011.  

Measures  aimed  at  a  stricter  spending  limits 
procedure  will  be  initiated  with  respect  to  the 
binding effect of budget limits and the coverage of 
budget  rules.  The  aim  is  for  the  limits  to  apply  to 
public  finances  as  a  whole, 
local 
finances, and they should ensure strict control over 
public finances at all levels. 

including 

is  planned 

It 
to  develop  macro-prudential 
supervision on the basis of existing institutions and 
to  ensure  that  the  Financial  Supervisory  Authority 
has  the  requisite  powers  and  tools  to  i.a.  prevent 
excessive 
debt 
accumulation. 

household 

corporate 

and 

22

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n
a

s
t
n
e
m

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t
i

m
m
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l
a
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o
i
t
a
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(
P
P
E

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Employment rate target: 78 %  

73.5 % (2009) 

73.0 % (2010) 

The employment rate has declined since the peak in 2008. 
This  lack  of  progress  can  be  explained  by  the  difficult 
economic  situation  following  the  crisis.  Achieving  the 
target will require efforts such extending working careers, 
preventing  structural  unemployment  and  better  matching 
of skills. The NRP provides a trajectory till 2015: 74.5%. 

R&D target:4 % of GDP 

3.92 % (2009) 

3.87 % (2010) 

Very  close  to  the  target,  but  there  are  serious  concerns 
about  over-dependence  on 
investments  by  one 
firm/sector.  

the 

Greenhouse  gas  (GHG)  emissions  target:  -16 % 
(compared  to  2005  emissions,  ETS  emissions  are 
not covered by this national target) 

Change  in  non-ETS  GHG  emissions  between  2005  and 
2010:  -5 %  (this  data  corresponds  to  the  current  ETS 
scope) 

Renewable energy target: 38 %  

Energy  efficiency:  reduction  in  primary  energy 
consumption by 2020 (in Mtoe) 

The  share  of  renewable  energy  sources  in  final  energy 
consumption was 30.6 % in 2008 and 30.3 % in 2009. 

Based  on  2009  (the  latest  available)  data,  Finland  still 
needs  to  step  up  its  efforts  to  achieve  its  2011/2012 
interim target for renewables. 

Energy efficiency objectives are set according to national 
the 
circumstances  and  national 
methodology for expressing the 2020 energy consumption 
impact of these objectives in the same format was agreed 
only  recently,  the  Commission  is  not  yet  able  to  present 
this overview. 

formulations.  As 

Early school leaving target: 8 % 

9.9 % (2009) 

)
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r
g
o
r
p

d
n
a

s
t
e
g
r
a
t

l
a
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o
i
t
a
n
(

0
2
0
2

e
p
o
r
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E

10.3 % (2010) 

The  share  of  early  school-leavers  (10.3 %  in  2010)  is 
below  the  EU-27  average  (14.4 %).  However,  it  stayed 
largely  unchanged  over  the  last  decade  and  apparently  it 
was  not  possible  for  the  country  to  make  any  more 
progress  on  reducing  it  further  (from  2008  to  2010  this 
indicator even increased by 0.5 pps.). 

Tertiary  education  target:  42 %  (narrow  national 
definition) 

45.9 % (2009) 

45.7 % (2010) 

In  2010  45.7 %  of  30  to  34-year  olds  had  tertiary 
attainment, well above the EU average. However, the plan 
is  to  exclude  the  technical  qualifications  awarded  by  the 
‘applied sciences universities’ from the indicator in future 
years which will bring the figure down to 37-38 %. In this 
context, Finland’s target is to raise the proportion of 30 to 
34-year olds having completed tertiary education to 42 % 
by  2020,  counting  university  graduates  only.  This  target 

23

 
 
 
 
 
 
 
 
 
Target  on  the  reduction  of  population  at  risk  of 
poverty or social exclusion: 150 000 persons 

seems to be attainable. 

886 000 (2009) 

890 000 (2010) 

According  to  the  NRP,  achieving  the  Europe  2020 
Strategy target requires reducing the number of people at 
risk  of  poverty  or  social  exclusion  by  around  150,000 
people;  this  should  be  achieved  through  employment 
measures  with  respect  to  50,000  people.  The  NRP  does 
not provide milestones for achieving the target. 

ANNEX 

Table I. Macroeconomic indicators 

24

 
 
 
 
Core indicators
GDP growth rate
Output gap 1
HICP (annual % change)
Domestic demand (annual % change) 2
Unemployment rate (% of labour force) 3
Gross fixed capital formation (% of GDP)
Gross national saving (% of GDP)
General government (%  of GDP)
Net lending (+) or net borrowing (-)
Gross debt
Net financial assets 
Total revenue 
Total expenditure
  of which: Interest
Corporations (%  of GDP)
Net lending (+) or net borrowing (-)

1995-
1999

2000-
2004

2005-
2008

2009

2010

2011

2012

2013

4.5
0.2
1.1
4.3
12.9
18.6
23.4

-1.5
52.3
17.3
55.1
56.6
3.8

3.1
0.8
1.8
2.9
9.2
19.4
27.2

4.2
43.3
35.8
53.4
49.1
2.2

3.2
2.7
1.9
3.0
7.4
20.7
26.0

4.1
37.6
63.2
53.1
49.0
1.5

-8.4
-6.3
1.6
-6.1
8.2
19.7
20.6

-2.5
43.5
62.8
53.4
55.9
1.1

3.7
-3.8
1.7
3.1
8.4
18.9
20.9

-2.5
48.4
64.7
52.7
55.2
1.1

2.9
-2.1
3.3
4.3
7.8
19.2
21.3

-0.5
48.6
n.a
53.2
53.7
1.1

0.8
-2.1
3.0
0.9
7.9
18.6
20.5

-0.7
50.5
n.a
53.6
54.3
1.2

1.6
-1.5
2.5
1.3
7.7
18.9
20.7

-0.4
51.7
n.a
54.3
54.7
1.2

6.3

4.9

3.3

4.6

5.7

3.5

4.1

4.1

n.a
n.a
10.6
22.8

n.a
n.a
10.9
22.7

-2.2
n.a
40.9
4.2
21.9
5.4

-128.0
3.6
8.8
22.1

-144.4
1.9
12.1
25.6

-166.3
3.2
10.9
26.4

-148.4
2.5
10.7
25.1

-124.6
-0.2
9.0
20.9

-0.5
65.5
41.6
4.0
22.5
6.9

-3.3
63.0
39.1
4.1
19.5
4.2

0.3
61.6
42.5
3.9
22.4
7.1

-0.3
53.2
38.5
3.5
23.3
5.2

-1.8
67.0
38.3
4.5
20.1
4.7

Net financial assets non-financial corporations
Net financial assets financial corporations
Gross capital formation
Gross operating surplus
Households and NPISH (%  of GDP)
Net lending (+) or net borrowing (-)
Net financial assets
Gross wages and salaries
Net property income
Current transfers received
Gross saving
Rest of the world (%  of GDP)
Net lending (+) or net borrowing (-)
Net financial assets
Net exports of goods and services
Net primary income from the rest of the world
Net capital transactions 
Tradable sector
Non-tradable sector
  of which: Building and construction sector
Real effective exchange rate (index, 2000=100)
Terms of trade in goods and services (index, 2000=100)
Market performance of exports (index, 2000=100)
Notes:
1 The output gap constitutes the gap between actual and potential gross domestic product at 2000 market prices.
2 The indicator for domestic demand includes stocks.
3  Unemployed persons are all persons who were not employed, had actively sought work and were ready to begin working immediately or within two 
weeks. The labour force is the total number of people employed and unemployed. The unemployment rate covers the age group 15-74.

5.0
76.1
7.8
-2.3
0.1
46.3
40.4
4.9
112.9
106.1
91.4

7.3
60.7
8.2
-0.1
0.1
46.4
40.8
5.3
104.5
100.4
98.9

2.1
1.9
1.6
1.6
0.1
39.6
47.4
6.2
120.7
92.0
95.1

1.5
-4.1
0.9
1.6
0.1
40.7
46.4
5.8
115.4
89.9
92.2

-0.5
n.a
-0.7
0.9
0.1
n.a
n.a
n.a
113.7
87.5
86.6

4.0
16.9
4.4
0.5
0.1
44.0
43.1
6.1
110.0
92.0
99.8

-0.4
n.a
-0.5
1.1
0.1
40.6
45.8
5.8
115.2
87.5
86.7

-2.9
n.a
40.7
3.9
22.4
4.5

n.a
n.a
10.6
22.7

-3.3
n.a
40.4
3.6
22.6
4.2

-0.6
n.a
-0.6
0.8
0.1
n.a
n.a
n.a
114.0
87.0
86.9

Source :
Commission services' spring 2012 forecast

25

 
 
 
Table II. Comparison of macroeconomic developments and forecasts 

Real GDP (% change)
Private consumption (% change)
Gross fixed capital formation (% change)
Exports of goods and services (% change)
Imports of goods and services (% change)
Contributions to real GDP growth:
- Final domestic demand
- Change in inventories
- Net exports
1

Output gap
Employment (% change)
Unemployment rate (%)
Labour productivity (% change)
HICP inflation (%)
GDP deflator (% change)
Comp. of employees (per head, % change)
Net lending/borrowing vis-à-vis the rest of 
the world (% of GDP)

2011
COM SP
2.9
3.3
4.6
-0.8
0.1

2.9
3.3
4.6
-0.8
0.1

2012
COM SP
0.8
1.0
-1.0
0.5
0.7

0.8
1.7
-1.2
1.9
2.3

2013
COM SP
1.5
1.1
2.2
2.7
2.2

1.6
1.0
2.8
4.8
3.9

2.9
1.3
-0.3
-2.1

1.2
7.8
1.7
3.3
3.6
2.7
-0.4

2.9
0.3
-0.3
-1.9

1.1
7.8
1.7
3.3
3.6
3.6
-0.3

0.9
0.0
-0.2
-2.1

-0.1
7.9
0.9
3.0
2.7
3.3
-0.5

0.6
0.2
-0.1
-1.8

-0.3
8.0
1.1
3.0
2.8
2.9
-0.5

1.3
0.0
0.3
-1.5

-0.1
7.7
1.7
2.5
2.1
3.3
-0.6

1.2
0.0
0.2
-1.3

0.1
7.9
1.4
2.4
2.5
2.5
-0.2

2014
SP
2.1
1.8
2.4
5.0
3.5

1.6
-0.1
0.6
-0.4

0.4
7.7
1.6
2.0
2.3
3.0
0.2

2015
SP
1.9
2.0
1.9
4.5
3.4

2016
SP
1.7
2.0
1.6
4.0
3.2

1.7
-0.1
0.4
0.3

0.1
7.4
1.8
2.0
2.1
3.5
0.2

1.6
-0.2
0.3
0.7

-0.1
7.3
1.8
2.0
2.1
3.5
0.1

Note:
1In percent of potential GDP, with potential GDP growth according to the programme as recalculated by the Commission services.

Source :
Commission spring 2012 forecasts (COM); Stability programme (SP).

26

 
 
 
Table III. Composition of the budgetary adjustment 

27

 
 
 
 
(% of GDP)

2011

2012

2013

2014

2015

2016

Change: 
2011-2016

Revenue
of which:
- Taxes on production and imports
- Current taxes on income, wealth, etc.
- Social contributions
- Other (residual)
Expenditure
of which:
- Primary expenditure

of which:

Compensation of employees
Intermediate consumption
Social payments
Subsidies
Gross fixed capital formation
Other (residual)
- Interest expenditure
General government balance (GGB)
Primary balance
One-off and other temporary measures
GGB excl. one-offs
Output gap2
Cyclically adjusted balance2
Structural balance
Change in structural balance

3

3

Structural primary balance
Change in structural primary balance
Expenditure benchmark
Public expenditure growth4 (real)
Reference rate5,6
Lower reference rate5,7
Deviation in % of GDP 
  from applicable reference rate
Two-year average deviation in % of GDP 
from applicable reference rate

COM COM SP
53.3
53.6
53.2

COM SP
53.9
54.3

14.0
16.1
12.4
10.6
53.7

14.3
16.0
12.6
10.7
54.3

14.3
16.0
12.5
10.5
54.4

14.6
16.2
12.6
10.9
54.7

14.7
16.0
12.5
10.7
54.4

SP
54.1

14.5
16.2
12.6
10.8
54.2

SP
54.2

14.4
16.2
12.6
11.0
54.2

SP
54.4

14.2
16.4
12.7
11.1
54.0

52.6

53.1

53.1

53.4

53.1

52.8

52.6

52.3

13.9
11.1
20.3
1.4
2.5
3.4
1.1
-0.5
0.6
-0.1
-0.5

-2.1

0.5

0.6

1.7

13.9
11.1
20.9
1.4
2.5
3.3
1.2
-0.7
0.5
0.0
-0.7

-2.1

0.3

0.3
-0.2

1.5
-0.1

1.17

1.45

0.51
-0.15

13.8
11.2
20.8
1.4
2.5
3.3
1.3
-1.1
0.2
0.0
-1.1

-1.8

-0.2

-0.2
-0.8

1.1
-0.6

0.86

1.45

0.51
-0.31

13.8
11.3
21.1
1.4
2.5
3.3
1.2
-0.4
0.8
0.0
-0.4

-1.5

0.3

0.3
0.0

1.6
0.0

0.76

1.45

0.51
0.13

13.6
11.3
20.9
1.3
2.5
3.5
1.3
-0.5
0.8
0.0
-0.5

-1.3

0.2

0.2
0.3

1.5
0.3

13.4
11.3
21.0
1.3
2.4
3.5
1.4
-0.1
1.3
0.0
-0.1

-0.4

0.1

0.1
-0.1

1.5
0.0

-0.97

1.45

0.51
-0.77

0.46

1.45

0.51
-0.03

13.2
11.3
21.0
1.3
2.4
3.4
1.6
0.0
1.6
0.0
0.0

0.3

-0.1

-0.1
-0.2

1.5
0.0

1.52

1.45

0.51
0.52

13.0
11.4
21.1
1.2
2.3
3.3
1.7
0.4
2.0
0.0
0.4

0.7

0.0

0.0
0.2

1.7
0.3

n.a.

n.a.

n.a.
n.a.

n.a.

n.a.

-0.01

-0.54

-0.40

0.24

n.a.

SP
1.2

0.2
0.3
0.3
0.5
0.3

-0.3

-0.9
0.2
0.8
-0.2
-0.2
-0.1
0.6
0.9
1.4
0.1
0.9

2.8

-0.5

-0.5

0.1

n.a.

n.a.

n.a.
n.a.

n.a.

Notes:
1On a no-policy-change basis.
2Output gap (in % of potential GDP) and cyclically-adjusted balance according to the programme as recalculated by Commission services 
on the basis of the information in the programme.
3Structural (primary) balance = cyclically-adjusted (primary) balance excluding one-off and other temporary measures.

4M odified expenditure aggregate used for the expenditure benchmark, growth rates net of non-discretionary changes in unemployment 
benefit and of discretionary measures.

5The reference rates applicable to 2014 onwards will be available from mid-2012. For illustrative purposes, the current reference rates have 
also been applied to the years 2014 onwards.
6The (standard) reference rate applies starting in the year following the one in which the country reaches its M TO.
7The lower reference rate applies as long as the country is adjusting towards its M TO, including the year in which it reaches the M TO.

Source :
Stability programme (SP); Commission spring 2012 forecasts (COM); Commission services’ calculations.

28

 
 
Table IV. Debt dynamics  

average 
2006-10

40.1
1.3

-3.0
0.2

1.3
-0.5
-0.6
4.2

2011

48.6
0.2

-0.6
-1.8

1.1
-1.3
-1.7
2.6

2012

2013

COM

51.7
1.2

-0.8
-0.6

1.2
-0.8
-1.0
2.6

COM

50.5
2.0

-0.5
-0.4

1.2
-0.4
-1.3
2.8

SP

50.7
2.1

-0.2
-0.4

1.3
-0.4
-1.3
2.7

0.0
2.7
-0.2
-1.7

2014
SP

51.9
0.1

2015
SP

51.6
-0.3

-1.3
-0.8

1.4
-1.0
-1.1
2.2

0.0
2.4
-0.2
-2.4

-1.6
-0.4

1.6
-0.9
-1.1
1.7

0.0
2.4
-0.2
-2.7

SP

51.8
1.1

-0.8
-0.6

1.3
-0.7
-1.2
2.6

0.0
2.5
-0.2
-1.9

(% of GDP)

Gross debt ratio1
Change in the ratio
Contributions 2 :

1. Primary balance
2. 'S nowball' effect

Of which:
Interest expenditure
Growth effect
Inflation effect

3. S tock-flow adjustment

Of which:
Cash/accruals diff.
Accum. financial assets

Privatisation

Val. & residual effects
Gap to the debt benchmark3,4

S tructural adjustment5

To be compared to:
Required adjustment6

Notes:
1End of period.
2The snowball effect captures the impact of interest expenditure on accumulated debt, as well as the impact of real GDP 
growth and inflation on the debt ratio (through the denominator). The stock-flow adjustment includes differences in cash 
and accrual accounting, the accumulation of financial assets and valuation and other residual effects. 

3 Not relevant during the excessive deficit procedures  that were ongoing in November 2011 and in the three years following 
the correction of the excessive deficit.

4 If positive, the projected gross debt-to-GDP ratio does not comply with the debt reduction benchmark.

5Applicable only during the transition period of three years from the correction of the excessive deficit for excessive deficit 
procedures that were ongoing in November 2011.

6Remaining annual structural adjustment assuming that the COM  (CP) budgetary projections are achieved.

Source :
Stability programme (SP); Commission spring 2012 forecasts (COM); Commission calculations.

29

 
 
 
 
 
 
Table V. Long-term sustainability indicators 

FI

EU27

no-policy 
change 
scenario 

Programme 
(SP) 
scenario

no-policy 
change 
scenario 

Programme 
(SCP) 
scenario

S2
of which:

Initial budgetary position (IBP)
Long-term change in the primary balance (LTC)
 of which:
Pension
Care (HC and LTC)
Others

S1 (required adjustment)*

Debt,  % of GDP (2011)
Age-related expenditure, % of GDP (2011)

4.9

-0.3
5.1

2.2
2.7
0.3
1.2

5.0

0.7
4.3

1.7
2.4
0.3
0.6

2.9

0.7
2.3

1.1
1.5
-0.3
2.2

0.7

-1.6
2.4

1.2
1.5
-0.3
-0.1

48.6
28.3

82.8
25.8

Source: Commission, 2012 stability and convergence programmes.  
Note:  The  ‘no  policy  change’  scenario  depicts  the  sustainability  gap  under  the  assumption 
that  the  budgetary  position  evolves  according  to  the  spring  2012  forecast  until  2013.  The 
‘stability programme’ (SP) scenario depicts the sustainability gap under the assumption that 
the budgetary plans in the programme are fully implemented  
* The required adjustment of the primary balance until 2020 to reach a public debt of 60% of 
GDP by 2030. 

Figure. Medium-term debt projection 

Gross debt as % of GDP - FI - Medium term debt projections

(% of GDP)

55

50

45

40

35

30

0
0
0
2

2
0
0
2

4
0
0
2

6
0
0
2

8
0
0
2

0
1
0
2

2
1
0
2

4
1
0
2

6
1
0
2

8
1
0
2

0
2
0
2

COM no-policy change scenario
COM + Shock ( -1p.p. in the short-term/long-term interest rate on maturing and new debt from 2014)
COM + Shock (+1p.p. in the short-term/long-term interest rate on maturing and new debt from 2014)
COM consolidation scenario (0.5% per year on SB) in order to achieve MTO
COM consolidation scenario (1% per year on SB) in order to achieve MTO
SP scenario

Source: Commission, 2012 stability and convergence programmes.  

30

 
 
 
 
 
Table VI. Taxation 

Total tax revenues (incl. actual compulsory social contributions, % of GDP)
Breakdown by economic function (% of GDP)1
     Consumption

              of which:

              - VAT

             - excise duties on tobacco and alcohol

             - energy

             - other (residual)

     Labour employed

     Labour non-employed

     Capital and business income

     Stocks of capital/wealth
     p.m.  Environmental taxes2
3
VAT efficiency
     Actual VAT revenues as % of theoretical revenues at standard rate

2001

44.8

2005

43.9

2007

43.0

2008

42.9

2009

42.6

2010

42.1

13.2

13.6

12.8

12.8

13.2

13.1

8.0

1.4

2.0

1.9

8.7

1.0

1.9

2.1

8.4

0.9

1.6

1.9

8.4

0.9

1.7

1.8

8.6

1.1

1.8

1.7

8.5

1.1

1.8

1.8

21.1

20.4

19.6

20.3

20.9

20.1

2.3

7.0

1.2

3.0

2.5

6.0

1.4

3.1

2.3

6.9

1.3

2.7

2.3

6.2

1.3

2.7

2.5

4.6

1.3

2.6

2.4

5.1

1.4

2.8

58.4

60.3

59.8

57.9

55.5

52.0

Note: 
1 T ax revenues are broken down by economic function, i.e. according to whether taxes are raised on consumption, labour or capital. See European Commission (2012), 

T axation trends in the European Union, for a more detailed explanation.

2 T his category comprises taxes on energy, transport and pollution and resources included in taxes on consumption and capital.

3 T he VAT  efficiency is measured via the VAT  revenue ratio. T he VAT  revenue ratio is defined as the ratio between the actual VAT  revenue collected and the revenue 

that would theoretically be raised if VAT  was applied at the standard rate to all final consumption. A low ratio can indicate a reduction of the tax base due to large 

exemptions or the application of reduced rates to a wide range of goods and services ('policy gap') or a failure to collect all tax due to e.g. fraud ('collection gap'). See 

European Commission (2011), T ax reforms in EU Member States, European Economy 5/2011, for a more detailed explanation.

Source: Commission

31

 
 
 
 
Table VII. Financial market indicators 

2007

2008

2009

2010

2011

213.4
82.8
69.5

231.5
82.6
67.1

170.4
81.2
65.3

267.3
83.8
…

0.4
13.6
12.1
11.6
8.8
143.7
1.1
0.0
93.5

0.3
15.1
18.0
12.4
12.4
144.7
0.2
0.0
88.7

Total assets of the banking sector (% of GDP)
Share of assets of the five largest banks (% of total assets)
Foreign ownership of banking system (% of total assets)
Financial soundness indicators:
              - non-performing loans (% of total loans)
              - capital adequacy ratio (%) 1)
              - return on equity (%) 2)
Bank loans to the private sector (year-on-year % change)
Lending for house purchase (year-on-year % change)
Loan to deposit ratio
CB liquidity as % of liabilities
Banks' exposure to countries receiving official financial assistance  (% of GDP)4)
Private debt (% of GDP)
Gross external debt (% of GDP) 4)
            - Public
            - Private
Long term interest rates spread versus Bund (basis points)*
Credit default swap spreads for sovereign securities (5-year)*
Notes: 
1) The capital adequacy ratio is defined as total capital devided by risk weigthed assets. M arch 2011.
2) The capital adequacy ratio is defined as total capital divided by risk weighted assets.   
3) Covered countries are IE, EL, PT, RO, LV and HU.
4) Latest data 2011Q3.
* M easured in basis points.
Source :
Bank for International Settlements and Eurostat (exposure to macro-financially vulnerable countries), IMF (financial soundness indicators), 
Commission (long-term interest rates), World Bank (gross external debt) and ECB (all other indicators).

0.6
14.6
10.0
0.9
6.4
142.9
0.8
0.0
103.9

0.6
14.4
9.2
5.7
6.8
139.4
0.0
0.5
104.5

42.5
50.8
26.7
29.5

30.1
42.7
7.7
…

36.6
50.6
51.6
38.3

30.4
54.4
30.6
28.7

339.7
…
…

0.5
14.7
11.2
8.6
6.6
142.3
0.4
0.3
106.8

42.4
45.3
39.8
49.2

32

 
 
 
 
 
Table VIII. Labour market and social indicators 

Labour market indicators
Employment rate 
(% of population aged 20-64)
Employment growth 
(% change from previous year)
Employment rate of women 
(% of female population aged 20-64)
Employment rate of men 
(% of male population aged 20-64)
Employment rate of older workers 
(% of population aged 55-64)
Part-time employment 
(% of total employment)
Part-time employment of women  
(% of women employment)
Part-time employment of men  
(% of men employment)
Fixed term employment 
(% of employees with a fixed term contract)
Unemployment rate1 (% of labour force)

Long-term unemployment

2

  (% of labour force)

Youth unemployment rate 
(% of youth labour force aged 15-24)

Youth NEET3 rate (% of population aged 15-24)

Early leavers from education and training (% of 
pop. 18-24 with at most lower sec. educ. and not 
in further education or training)
Tertiary educational attainment (% of population 
30-34 having successfully completed tertiary 
education)
Labour productivity per person employed 
(annual % change )
Hours worked per person employed  (annual % 
change)
Labour productivity per hour worked (annual % 
change; constant prices)
Compensation per employee (annual % change; 
constant prices)
Nominal unit labour cost growth (annual % 
change)

2006

2007

2008

2009

2010

2011

73.9

74.8

75.8

73.5

73.0

73.8

1.8

2.0

1.6

-2.9

-0.4

1.1

71.5

72.5

73.1

72.4

71.5

71.9

76.3

77.2

78.4

74.7

74.5

75.6

54.5

55.0

56.5

55.5

56.2

57.0

14.2

14.3

13.5

14.2

14.9

15.2

19.4

19.4

18.3

19.2

19.8

19.9

9.4

9.4

9.0

9.4

10.2

10.8

16.4

15.9

15.0

14.6

15.5

15.6

7.7

1.9

6.9

1.6

6.4

1.2

8.2

1.4

8.4

2.0

7.8

1.7

18.7

16.5

16.5

21.5

21.4

20.1

7.7

9.7

7.0

9.1

7.8

9.8

9.9

9.0

9.9

10.3

38.5

39.3

38.3

39.4

39.2

2.5

3.1

-0.4

-0.1

2.9

2.0

0.3

3.2

0.6

0.5

-2.2

-1.0

-1.2

1.4

6.7

3.7

-5.9

-1.0

-4.9

0.9

8.7

7.2

4.9

0.7

4.2

3.1

-1.3

-1.8

:

:

:

1.7

0.0

1.6

-0.9

1.0

-2.5

Real unit labour cost growth (annual % change)

-0.5

-2.4

Notes:

1 According to ILO definition, age group 15-74)
2 Share of persons in the labour force who have been unemployed for at least 12 months.
3 NEET are persons that are neither in employment nor in any education or training.

Sources: 
Commission (EU Labour Force Survey and European National Accounts) 

33

 
 
 
 
Table VIII. Labour market and social indicators (continued) 

Expenditure on social protection 
benefits (% of GDP)
Sickness/Health care
Invalidity
Old age and survivors
Family/Children
Unemployment
Housing and Social exclusion n.e.c.
Total
of which:  Means tested benefits
Social inclusion indicators
Risk-of-poverty or exclusion1 (% of total 
population)
Risk-of-poverty or exclusion of children (% of 
people aged 0-17)
Risk-of-poverty or exclusion of elderly (% of 
people aged 65+)
At-risk-of-poverty rate2 (% of total population)
Value of relative poverty threshold (single 
household per year) - in PPS
Severe material deprivation3  (% of total 
population)
Share of people living in low work intensity 
households 4 (% of people aged 0-59 not 
student)
In-work at-risk-of poverty rate (% of persons 
employed)

Notes:

2005

2006

2007

2008

2009

6.69
3.35
8.70
2.99
2.39
0.28
26.7
1.31

6.70
3.24
8.76
2.96
2.19
0.27
26.4
1.22

6.48
3.10
8.59
2.86
1.91
0.24
25.4
1.10

6.79
3.20
8.78
2.94
1.80
0.42
26.2
1.06

2006

2007

2008

2009

7.52
3.60
10.38
3.31
2.40
0.49
30.3
1.27

2010

17.1

17.4

17.4

16.9

16.9

13.8

15.1

15.1

14.0

14.2

23.0

12.6

23.1

13.0

23.9

13.6

23.1

13.8

19.5

13.1

8886

9145

9933

10366

10275

3.3

3.6

3.5

2.8

2.8

8.9

4.5

8.7

5.0

7.3

5.1

8.2

3.7

9.1

3.7

1 People at risk of poverty or social exclusion (AROPE): individuals who are at risk of poverty (AROP) 
and/or suffering from severe material deprivation (SM D) and/or living in households with zero or very low 
work intensity (LWI).

2 At-risk-of poverty rate: share of people with an equivalised disposable income below 60% of the national 
equivalised median income. 

3 Share of people who experience at least 4 out of 9 deprivations: people cannot afford to i) pay their rent or 
utility bills, ii) keep their home adequately warm, iii) face unexpected expenses, iv) eat meat, fish, or a protein 
equivalent every second day, v) enjoy a week of holiday away from home once a year, vi) have a car, vii) have 
a washing machine, viii) have a colour TV, or ix) have a telephone.

4 People living in households with very low work intensity: share of people aged 0-59 living in households 
where the adults work less than 20% of their total work-time potential during the previous 12 months.

Sources: 
For expenditure on social protection benefits ESSPROS; for social inclusion EU-SILC.

34

 
 
 
 
Table IX. Product market performance and policy indicators 

2002-
2006

2.1

6.9

3.0

1.9

3.7

2002-
2006

n.a.

n.a.
3.4

Performance indicators

Labour productivity1 total economy (annual 
growth in %)
Labour productivity1 in manufacturing (annual 
growth in %)
Labour productivity1 in electricity, gas, water 
(annual growth in %)
Labour productivity1 in the construction sector 
(annual growth in %)
Patent intensity in manufacturing2 (patents of the 
EPO divided by gross value added of the sector)

Policy indicators

Enforcing contracts 3 (days)
Time to start a business 3 (days)
R&D expenditure (% of GDP)
Tertiary educational attainment 
(% of 30-34 years old population)
Total public expenditure on education 
(% of GDP)

Product market regulation4, Overall
(Index; 0=not regulated; 6=most regulated)
Product market regulation4, Retail
(Index; 0=not regulated; 6=most regulated)
Product market regulation4, Network Industries 5
(Index; 0=not regulated; 6=most regulated)

2007

2008

2009

2010

2011

3.1

9.3

8.3

-1.5

-4.9

5.1

2.8

0.9

-10.9

10.2

n.a.

-7.6

-3.5

n.a.

n.a.

-3.1

-3.6

-0.5

5.8

n.a.

2.9

2.5

n.a.

n.a.

n.a.

2007

2008

2009

2010

2011

235

14
3.5

235

14
3.7

375

14
3.9

375

14
3.9

43.2

47.3

45.7

45.9

45.7

375

14
n.a.

n.a.

6.3

5.9

6.1

n.a.

n.a.

n.a.

2005

2006

2008

2009

2010

2011

n.a.

n.a.

n.a.

n.a.

1.2

3.1

n.a.

n.a.

n.a.

n.a.

n.a.

n.a.

2.3

2.3

2.2*

n.a.

n.a.

n.a.

Notes:
1Labour productivity is defined as gross value added (in constant prices) divided by the number of persons employed.
2 Patent data refer to applications to the European Patent Office (EPO). They are counted according to the year in which 
they were filed at the EPO. They are broken down according to the inventor's place of residence, using fractional counting if 
multiple inventors or IPC classes are provided to avoid double counting. 
3 The methodologies, including the assumptions, for this indicator are presented in detail on the website 
http://www.doingbusiness.org/methodology. 
4 The methodologies for the product market regulation indicators are presented in detail on the website 
http://www.oecd.org/document/1/0,3746,en_2649_34323_2367297_1_1_1_1,00.html. The latest available product market 
regulation indicators refer to 2003 and 2008, except for Network Industries.

5 Aggregate ET CR.

*figure for 2007.

Source :

Commission, World Bank - Doing Business  (for enforcing contracts and time to start a business) and OECD (for the 
product market regulation indicators). 

35

 
 
 
 
 
Table X. Indicators on green growth  

Finland

Green Growth performance

Macroeconomic
Energy intensity 
Carbon intensity 
Resource intensity (reciprocal of resource productivity)
Waste intensity 
Energy balance of trade 
Energy weight in HICP
Difference between change energy price and inflation 
Environmental taxes over labour taxes
Environmental taxes over total taxes

Sectoral 

Industry energy intensity 
Share of energy-intensive industries in the economy
Electricity prices for medium-sized industrial users 
Public R&D for energy 
Public R&D for the environment
Recycling rate of municipal waste
Share of GHG emissions covered by ETS
Transport energy intensity
Transport carbon intensity
Change in the ratio of passenger transport and GDP

Security of energy supply
Energy import dependency
Diversification of oil import sources 
Diversification of energy mix
Share of renewable energy in energy mix

kgoe / €
kg / €
kg / €
kg / €
% GDP
%
%
ratio
ratio

kgoe / € 
% GDP
€ / kWh
% GDP
% GDP
ratio
%
kgoe / €
kg / €
%

%
HHI
HHI
%

2001-
2005

0.25
0.54
1.37
n.a.
-1.9%
8
2.9
13.3%
7.0%

0.36
12.8
0.05
n.a.
n.a.
n.a.
n.a.
0.39
1.11
-0.7%

55.3%
n.a.
0.21
22.3%

2006

2007

2008

2009

2010

0.24
0.51
1.40
0.46
-3.2%
7
5.5
13.1%
6.9%

0.34
12.8
0.05
0.04%
0.02%
40.1%
56.0%
0.42
1.19
-3.8%

54.2%
0.47
0.21
22.9%

0.23
0.47
1.33
0.46
-2.6%
7
2.1
12.3%
6.4%

0.31
12.6
0.05
0.08%
0.02%
44.4%
54.4%
0.41
1.14
-2.0%

53.4%
0.60
0.21
23.0%

0.22
0.42
1.32
0.49
-3.5%
8
13.6
11.8%
6.3%

0.31
11.7
0.06
0.09%
0.01%
46.8%
51.4%
0.39
1.06
-1.1%

55.0%
0.72
0.21
25.2%

0.22
0.44
1.21
n.a.
-2.6%
7
-4.6
11.2%
6.2%

0.32
10.6
0.07
0.11%
0.02%
49.5%
51.7%
0.41
1.09
n.a.

54.4%
0.79
0.21
23.2%

0.23
n.a.
n.a.
n.a.
-2.9%
8
8.6
n.a.
n.a.

n.a.
n.a.
0.07
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.

n.a.
n.a.
n.a.
n.a.

Country-specific notes: 
The year 2011 is not included in the table due to lack of data.
General explanation of the table items:
Source: Eurostat unless indicated otherwise; ECFIN explanations given below
All macro intensity indicators are expressed as a ratio of a physical quantity to GDP (in 2000 prices)
          Energy intensity: gross inland energy consumption (in kgoe) divided by GDP (in EUR)
          Carbon intensity: Greenhouse gas emissions (in kg CO2 equivalents) divided by GDP (in EUR)
          Resource intensity: Domestic M aterial Consumption (in kg) divided by GDP (in EUR)
          Waste intensity: waste (in kg) divided by GDP (in EUR)
Energy balance of trade: the balance of energy exports and imports, expressed as % of GDP  
Energy weight in HICP: the share of the "energy" items in the consumption basket used in the construction of the HICP
Difference between energy price change and inflation: energy component of HICP, and total HICP inflation (annual %-change)
Environmental taxes over labour or total taxes: from DG TAXUD's database "Taxation trends in the European Union"
Industry energy intensity: final energy consumption of industry (in kgoe) divided by gross value added of industry (in EUR) 
Share of energy-intensive industries in the economy: share of gross value added of the energy-intensive industries in GDP
Recycling rate of municipal waste: ratio of municipal waste recycled over total municipal waste
Public R&D for energy or for the environment: government spending on R&D (GBAORD) for these categories as % of GDP
Share of GHG emissions covered by ETS: based on greenhouse gas emissions as reported by M ember States to EEA (excl LULUCF)
Transport energy intensity: final energy consumption of transport (in kgoe) divided by gross value added of industry (in EUR) 
Transport carbon intensity:  greenhouse gas emissions in transport divided by gross value added of the transport sector
Passenger transport growth : measured in %-change in passenger kilometres
Energy import dependency: net energy imports divided by gross inland energy consumption incl. of international bunkers

Diversification of oil import sources: Herfindahl index (HHI), calculated as the sum of the squared market shares of countries of origin 

Diversification of the energy mix: Herfindahl Index over natural gas, total petrol products, nuclear heat, renewable energies and solid fuels

Share of renewable energy in energy mix: percentage-share in  gross inland energy consumption, expressed in tonne oil equivalents

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