Finland Prioritizes Defense and Security Spending Amid Fiscal Reforms

Finland's centre-right coalition plans to boost spending on NATO membership, defence, and security in 2025 while reducing welfare spending to tackle the fiscal deficit. Labour market reforms and welfare cuts have sparked strikes. The government aims to balance the budget by 2027 amid economic challenges.

Finland's centre-right coalition government, led by Prime Minister Petteri Orpo, has announced plans to boost spending on NATO membership, defence, and security in 2025. This comes as a measure to address the Nordic country's fiscal deficit.

Orpo's coalition has initiated labour market reforms and reduced social welfare spending, causing widespread strikes earlier this year. Finland's economy has been in recession, impacted by high interest rates and the effects of Russia's invasion of Ukraine, necessitating these reforms to enhance productivity and manage the fiscal shortfall.

Finance Minister Riikka Purra disclosed that state fiscal spending for 2025 would rise to 88.8 billion euros, with a projected deficit decrease to 12.2 billion euros. Defence spending will see an increase of 488 million euros, primarily due to a new fighter jet fleet acquisition, and additional funds will be allotted for NATO-related expenditures and border security.

(With inputs from agencies.)