Finland: 2008 Article IV Consultation: Staff Report; Staff Statement; Public Information Notice on the Executive Board Discussion; and Statement by the Executive Director for Finland
IMF Staff Country Reports, February 4, 2009
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- Finland: 2008 Article IV Consultation: Staff Report; Staff Statement; Public Information Notice on the Executive Board Discussion; and Statement by the Executive Director for Finland
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Bibliographic details
- Published: February 4, 2009
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781451813302.002
Executive summary and key findings
- Spillovers from the global turmoil are adversely affecting activity and may weaken the financial system.
- From a cyclical perspective, a fiscal structural loosening is warranted.
- Fiscal loosening in Finland’s small, open economy would be limited in effectiveness in the absence of an EU-wide fiscal package.
- The authorities have been confident that an EU-coordinated budget expansion is in the works.
- There has been agreement that loosening should be designed to minimize damage to long-term fiscal sustainability.
Analysis of cyclical policy
- Recommendation: pursue fiscal structural loosening to address cyclical weakness.
- Constraint: effectiveness of national fiscal expansion is limited without coordination at the EU level.
- Design principle: any loosening should minimize damage to long-term fiscal sustainability.
Financial sector risks
- Assessment: adverse spillovers from global turmoil pose risks to activity and may weaken the financial system.
- Implication: monitoring and policy measures should account for potential financial-system weakening.
Policy coordination and EU role
- Finding: a coordinated EU-wide fiscal package would enhance the effectiveness of Finland’s fiscal loosening.
- Authorities’ stance: confidence that an EU-coordinated budget expansion is forthcoming.
- Recommendation: align national loosening measures with EU coordination to maximize impact and protect fiscal sustainability.
Publication metadata and availability
- Publication date: February 4, 2009
- Series: IMF Staff Country Reports
International Monetary Fund. "Finland: 2008 Article IV Consultation: Staff Report; Staff Statement; Public Information Notice on the Executive Board Discussion; and Statement by the Executive Director for Finland."