European Commission
Europe 2020

Country-specific Recommendations

The Country-specific Recommendations are documents prepared by the European Commission for each country, analysing its economic situation and providing recommendations on measures it should adopt over the coming 12 months. They are tailored to the particular issues the Member State is facing and cover a broad range of topics: the state of public finances, reforms of pension systems, measures to create jobs and to fight unemployment, education and innovation challenges, etc. The final adoption of Country-specific Recommendations prepared by the Commission is done at the highest level by national leaders in the European Council.

Proposed recommendations for Finland 2012

In 2012, Finland's economic activity is expected to grow by 0.8% and by 1.6% in 2013. Unemployment is foreseen stay at 8%.

Finland has experienced a strong recovery in recent years and economic fundamentals remain strong. The country is on track for balancing the general government finances by 2015. and it is taking steps to ensure the long-term sustainability of public finances (e.g. by introducing a reform to reorganize the municipal sector).

However, Finland is facing important challenges with respect to the long-term sustainability of the current standard of living due to an ageing population, industrial restructuring and a loss of competitiveness on international markets. For the first time in nearly 20 years, the current account turned into deficit in 2011 and is expected to remain in deficit in 2012. Strengthening competition in product and services market has become increasingly important for boosting productivity and enhancing potential economic growth. Notwithstanding the past strong Finnish R&D and innovation performance, without a significant increase in the number of internationalising innovative high growth firms, Finland’s ranking as an EU innovation leader risks declining. There is continued need to lengthen working careers and to combat the rise in long-term unemployment as well as youth unemployment.

Overview of recommendations

1. Preserve a sound fiscal position in 2012 and beyond by correcting any departure from the medium-term budgetary objective (MTO) that ensures the long-term sustainability of public finances. To this end, reinforce and rigorously implement the budgetary strategy, supported by sufficiently specified measures, for the year 2013 and beyond including meeting the expenditure benchmark. Continue to carry out annual assessments of the size of the ageing-related sustainability gap and adjust public revenue and expenditure in accordance with the long-term objectives and needs. Integrate the local government sector better in the system of multi-annual expenditure ceilings.
   More information on Finland’s economy
2. Take further measures to achieve productivity gains and cost savings in public service provision, including structural changes and efficiency-enhancing territorial administrative reforms, also in order to respond to the challenges arising from population ageing.
   More information on population ageing and public finances
3. Implement the ongoing measures to improve the labour market position of young people and the long-term unemployed, with a particular focus on skills development. Take further steps to encourage the employment rate of older workers, including by reducing early exit pathways. Take measures to increase the statutory retirement age in line with the improved life expectancy.
   More information on the European employment strategy
4. Continue enhancing competition in product and service markets, especially in the retail sector, by ensuring the effective implementation of the new Competition Act and the new programme on promoting healthy competition. Continue to further opening the municipal procurement of services to competitive bidding and by ensuring competition neutrality between private and public undertakings. Take further steps to ensure that competition law fines are sufficiently deterrent.
   More information on services in the Single Market
5. In order to strengthen productivity growth and external competitiveness, continue efforts to diversify the business structure, in particular by hastening the introduction of planned measures to broaden the innovation base while continuing to align wage and productivity developments.
   More information on the EU enterprise policy and on innovation for growth

See how Finland compares with other EU Member States in key areas

European Semester Documents

National Reform Programme

All Member States have committed to the Europe 2020 strategy. However, each country has different economic circumstances and translates the overall EU objectives into national targets in its National Reform Programme – a document which presents the country's policies and measures to sustain growth and jobs and to reach the Europe 2020 targets. The National Reform Programme is presented in parallel with its Stability/Convergence Programme, which sets out the country's budgetary plans for the coming three or four years.

Macroeconomic indicators

Europe 2020 targets – State of play