The best-rated economy in the Euro Zone is not immune to debt. In a Bloomberg report, the Bank of Finland is said to have cautioned the country about the risk of doubling its debt, similar to that of Italy's. The central bank of Finland also added that the country has little room to wiggle itself out from a plan to fill in a $12.3 billion or €9 billion gap in the fastest-aging economy in all of Europe if it has to avoid increasing its debt levels in the next 15 years.
Calculations by the Helsinki-based bank indicated that Finland is at risk of joining the rest of the European bloc's most indebted nations if its government does not make any actions to conduct reforms on its spending. The lack of measures, according to the central bank, could have the country's debt exceed 110% of its gross domestic product by year 2030. In 2012, it was only 53.6%. The bank said the success of the monetary reforms could help curb debt levels to around 70% by the year 2030.
In an emailed response to the news agency via her aide, Finance Minister Jutta Urpilainen said the assessment of the central bank of Finland showed that the plan of its government would have real implications in the economy. Urpilainen stressed the need for structural reforms in order for the Finnish welfare state to have a fighting chance to survive.
Despite having a stable AAA grade from the three top rating companies that include Moody's Investor Services, the economy of Finland is said to be struggling from the recent paper maker declines and the beleaguered flagship technology industry led by Nokia Oyj. According to a Bloomberg report, the demand in exports had not offset the weak consumer demand as the government make cuts in response to deficits and as companies let go of workers.
According to economist Petri Maeki-Fraenti, "We must get used to slower economic growth for an extended period of time."
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