8legs: Excessive deficit procedure

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Russian threats push Finland past EU deficit cap – DW – 12/01/2025

Finland's 2025 deficit is projected to reach about 4.5% of GDP, breaching the EU limit of 3%.
The European Commission formally placed Finland under the Excessive Deficit Procedure, risking sanctions and stricter oversight.
Defense spending surged from 2022 to 2024, contributing to the deficit pressure as Finland aims for 3% of GDP on defense by 2029.
Energy disruption from Russia and the resulting higher costs pressured the fiscal outlook.
Analysts warn that austerity could choke growth given Finland's reliance on domestic sectors.
The government enacted a 2025 budget with steep spending cuts and tax hikes to curb the deficit.
Debt is rising as the country grapples with post‑Nokia economic challenges and welfare costs.
Energy diversification helped reduce Russia dependency, but at higher purchase costs.
Temporary trade shocks from Russia cut cross-border activity and tourism.
Authorities expect further fiscal consolidation if growth falters.
Finland remains highly ranked for happiness despite fiscal strain and political challenges.

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