Prime Minister Stubb: Credit rating decision stresses the importance of structural reforms

Prime Minister Stubb commented on the credit rating decision by Fitch Ratings on Friday evening.

"The affirmed AAA credit rating - the best possible -  is naturally good news for Finland. However, without determined efforts it will not remain. In the next parliamentary term, it is necessary to balance central and local government expenditure and make bold structural changes to increase employment, Stubb says.

Fitch gives the key rating drivers for Finland's AAA rating. These include Finland's strong political and social institutions, a strong track record of prudent fiscal policy management and a degree of consensus across the political spectrum on the future direction of macroeconomic policy. Fitch expects that the new government will remain committed to ensuring public debt sustainability through a mix of fiscal adjustments and structural reforms. The economic prospect has turned negative according to the Fitch assessment.

"At the beginning of the next parliamentary term, Finland needs to agree on adjustments that will balance central and local government finances. The scale of adjustments should follow the Ministry of Finance estimates. Decisions need to be taken right away, even though their implementation would be allocated over several years", Stubb says.

"Besides the adjustments, structural reforms are also absolutely necessary. Proposals on the pension reform need to be presented to Parliament without delay. The social welfare and health care reform needs to be pushed through.  Pay settlements with labour market organisations must aim at very moderate long-term agreements that increase employment. These will not be sufficient alone. Measures to increase the demand and supply of labour are critical. Our prospects will only turn positive through bold reforms that increase employment", Stubb says.

English translation of the press release published on 23 March 2015