New NATO member plans to cut pensions — RT World News

The Finnish government is looking to cut spending and increase taxes to fill the gap in the 2025 budget

The Finnish government has no choice but to cut pensions in order to improve public finances, Finance Minister Rikka Bora said in an interview with local newspaper Helsingin Sanomat. The pension issue is part of the political debate this month, as the government looks to make an additional €3 billion in cuts in the 2025 state budget.

According to the minister, a reduction in occupational pensions is inevitable as part of the government's austerity package. Borah said the government could freeze the annual cost of living-based increases in pensions or increase taxes on some pensions.

“My understanding is that it is impossible to reach the desired result without dealing with pensions.” The newspaper quoted Bora as saying on Wednesday. Bora added that the government will discuss the measures in a framework session scheduled for next week.

In a previous interview with Iltaalihti newspaper, the Finance Minister said that the lowest pensions were unlikely to be targeted.

“We have a large number of wealthy retirees, with a high level of life satisfaction and sufficient funds for self-realization and travel. At the same time, we have retirees who can barely make ends meet and have to choose between medicine and food.” She explained.

“Small adjustments” The situation will not improve, and there is no chance of going back “The sweetness of the old days,” Bora warned.

The Finnish government earlier introduced cuts to basic social security benefits such as housing subsidies and unemployment allowances for low-income groups. Many human rights groups have sounded the alarm over the cuts, warning that they could lead to a rise in relative poverty among young people, single parents and the elderly.

The 2024 budget approved by Finland's ruling center-right coalition last year saw the deficit widen by 35%, or 11.5 billion euros ($12.28 billion), compared to 2023. Prime Minister Petri Orbo said at the time that Finland's economic outlook was rising. depressed. In 2023, the country's GDP fell by 0.4% year-on-year, according to European Union economic data.

Finland has seen a decline in tax income, which has been attributed to an aging population and a declining birth rate. According to Iltalihti newspaper, Finland is sinking into debt at an alarming rate. However, the Govt “He hardly cuts corners.” Regarding internal and external security, the publication notes. He adds that when defense expenditures are not counted, Social Security and education are the largest government expenditures.

Finland joined NATO a year ago. Before accession, the country spent 1.7% of its GDP on defence, according to World Bank data. Since then, the country has increased its defense budget, with NATO members expected to spend 2% of their GDP on defence.

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