Finnish cabinet’s future hangs in balance as budget talks sour

Bloomberg

Finland’s government is set to resume talks on its economic stance after coming close to a breakup during the weekend.
The negotiations intended to hammer out a spending framework for the next four years ended up exposing tensions within the five-party coalition half way through its term. Social Democrat Prime Minister Sanna Marin and the left-leaning parties are pushing for “social justice” and are willing to spend on job creation, while the Center Party and Swedish People’s Party seek a faster return to
fiscal prudence than their peers.
Leaders of the ruling parties will meet in Helsinki to continue negotiations intended to reveal whether they have enough common ground to still govern together. The talks, originally scheduled to last two days, are now entering their sixth day.
Finland is set to hold countrywide municipal elections on June 13, putting political pressure on the ruling parties who lag behind the opposition Finns Party and National Coalition in polls.
The Center Party led by Annika Saarikko, which is hemorrhaging support in rural areas — its traditional backing, wants the government to stick to its road map of halting the growth of public debt by 2030, though it’s also willing to continue stimulus to the Nordic nation’s economy for two more years.
Finland has run a deficit in public finances each year since 2008, and public debt relative to size of economy jumped to 70% last year from 60% in 2019 on pandemic-related spending.
The parties also disagree on how to help struggling peat farmers as cost of emitting carbon dioxide causes demand for fossil fuel to plummet faster than expected. A failure to agree on a budget framework would likely lead to government’s resignation.