Finland’s Top PM Contender Sees Recovery Taking a Decade

Finland will take another decade to revive its economy and will need to scrap a goal of ending debt growth by 2017, the front-runner to become the next premier said.

The opposition Center Party, which tops the polls ahead of the April 19 election, will seek to create 200,000 new jobs under a plan that will grow the public debt until 2025. It also seeks annual economic growth of 2 percent by 2019, twice as fast as forecast by the central bank.

“The situation is bleak and this may be a longer endeavor than we realize,” Center Party Chairman Juha Sipila said at a Helsinki press briefing Wednesday. “We’ve estimated that it’s a 10-year project to get Finland back into shape.”

The northernmost euro member has failed to return to the 2008 level of gross domestic product amid industrial headwinds and a recession in the single-currency area. The government hasn’t fully adjusted spending to lower revenue, allowing borrowing to exceed its income for six consecutive years and public debt to almost double since 2008. Most of its austerity measures have taken the form of higher taxes, further sapping economic momentum.

Prime Minister Alexander Stubb’s coalition, which started work in June, sees no end to debt growth until at least 2017.

Center Party’s economic targets are “easy to support,” Stubb said in his blog today. The party must clarify how to finance some of its goals, he said.

“We can’t promise good things to everyone,” Stubb said. “We must make choices.”

The Center Party will keep a tight rein on spending, boost productivity and if needed, cut the budget to ensure central government spending is frozen at its 2014 level, Sipila said.

“The government must act right at the start of its term,” he said. “The welfare state won’t make it unless all of us believe in this goal.”

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