Eurozone: MEP on how Finland can benefit from own currency
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Annika Saarikko, Finland’s Centre Party leader, promised on Saturday to maintain a hard line in Brussels against future collective EU debt when she takes over as finance minister next week.
Ms Saarikko, who is due to take over from Matti Vanhanen, her Centre Party colleague, in a transition that was planned months ago, promised continuity after tough negotiations with coalition partners over spending.
Suggesting she would largely continue her predecessor’s policies, she told Reuters: “I think that we have already built many guidelines together with Vanhanen during my party leadership.”
Finland has been among the European Union countries most sceptical of joint borrowing.
Ms Saarikko told Reuters that in her new role she would continue to emphasise Finland’s position that joint borrowing agreed in last year’s landmark EU recovery deal should be a one-off, and not a feature of future EU budgets.
She said: “I do not want to take Finland on the path of debt union.”
The Centre Party announced earlier on Saturday that Mr Vanhanen would step down and be replaced next week by Ms Saarikko, now science and culture minister in the five-party centre-left coalition government.
Ms Saarikko said a new science minister would be named on Wednesday and both would take up their new posts on Thursday.
The planned mid-term switch was agreed when Mr Vanhanen took over the position from Katri Kulmuni, who resigned in June 2020 after admitting she had used taxpayers’ money to pay for training in public speaking.
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Ms Saarikko, 37, defeated Ms Kulmuni in September to become party leader.
The coalition government published its public spending guidelines on April 29 after negotiations that dragged on for more than a week, as Ms Saarikko and her party rejected several of Prime Minister Sanna Marin’s proposals.
The coalition agreed to cap public spending at 63.8 billion euros with a deficit of 7.6 billion next year, and at 77 billion with a deficit of 8.9 billion in 2023.
Ms Saarikko’s Centre Party is seen as more fiscally conservative than Marin’s Social Democrats.
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Disagreements between the two had raised concerns that the Finnish parliament would not pass the EU’s COVID-19 recovery plan, but on Wednesday it was approved with support from all the governing parties as well as one major opposition party.
Many economists see the recovery fund as a foot in the door for more regular joint debt issuance by the AAA-rated EU in future – and top Commission officials echoed this view before the European Parliament’s economic and monetary affairs committee.
Commission Vice President Valdis Dombrovskis said: “The more successful we are in the implementation of this facility the more scope there will be for discussions on having a permanent instrument, probably of a similar nature.”
The borrowing, to be done by the executive Commission in the name of all EU countries, is to be repaid over 30 years from new taxes called new own resources. These have yet to be agreed but could include levies on the digital economy, on CO2 emissions or on imports of goods made using dirty technologies.
European Economic Commissioner Paolo Gentiloni told the same committee: “It will have permanent consequences on financial markets because we have this European-denominated debt to be repaid in the next 30 years.
“On the future – if this instrument works and we are able to agree on the new own resources to repay this common debt, I think we can have a serious discussion on further initiatives.
“But what is crucial for these further initiatives, is to make this one work and be repaid with new own resources.”
For the Commission to start borrowing the money on markets, all EU national parliaments must ratify a decision to increase national guarantees to repay it, in case the new taxes fail to materialise. Eight have yet to do so.
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