Finland’s debt exceeds eurozone limit for first time

Finland’s public debt climbed to 63.1 percent of gross domestic product in 2015, exceeding for the first time the eurozone limit of 60 percent, Statistics Finland said.

In 2014, with a debt rate of 59.3 percent of GDP, the Nordic eurozone country had managed to stay just under the limit outlined for the common currency in the Maastricht treaty.

Finland’s pro-austerity government that took office last May has promised to change course but, with a lack of positive signals, economists are yet to be convinced.

From the end of 2014 until the end of 2015, Finland’s public debt swelled by nine billion euros to 130.7 billion (by $10 billion to 145 billion).

Prime Minister Juha Sipila of the Centre Party and his three-party coalition government have tried since May to carry out an “internal devaluation” by cutting wages and public expenditure.

But they have so far hit a brick wall put up by the country’s powerful labour unions, with a growing number of people preferring to debate the possibility of Finland exiting the eurozone.

Ratings agency Fitch on Friday stripped Finland of its “triple A” credit rating, predicting the country’s public debt would reach 67.5 percent of GDP in 2020.

Statistics Finland revised last year’s growth figure up by 0.1 percent, to 0.5 percent.