Finland's State Treasury (Valtiokonttori) has revised down its estimate of the amount the country needs to borrow in total through 2012, although the net increase in new loans may see the overall sovereign debt rise slightly.
Finland’s State Treasury (Valtiokonttori) has revised down its estimate of the amount the country needs to borrow in total through 2012, although the net increase in new loans may see the overall sovereign debt rise slightly.
The state wishes to borrow some €22bn, which equates to some €7bn in net new debt, the Treasury said.
This compares to the €24.5bn of borrowing in 2011 so far, during which total debt increased on a net basys by €6.5bn. At the end of October the total sovereign debt stood at €78.1bn, or equivalent to €14,471 per Finn.
Finland’s sovereign debt
Source: Treasury Finland
Teppo Koivisto, director of Finance and head of Division at the State Treasury, added that the ongoing financial crisis in Europe had not affected Finland’s ability to handle its sovereign debt. The Treasury has benefited from the country’s relative financial stability and the highest credit rating, which makes it competitive in the global debt market, he said.
While Finland’s debt load may be manageable, that cannot be said for other nations in the eurozone.
However, Finland’s finance minister Jutta Urpilainen (pictured) said following the Ecofin and Eurogroup meetings on 29 and 30 November, that she believed further meetings next week will come up with a solution to the ongoing debt crisis.
Ecofin is the shorter name for the EU’s Economic and Financial Affairs Council. The Eurogroup is an informal body not part of the Council that is made up of EU states using the euro, and which usually meets the evening before any Ecofin meeting.
Urpilainen argued that finance ministers have the tools to build a believable firewall to stop the contagion spreading. Europe’s finance ministers agreed yesterday, 30 November, to strengthen the European Financial Stability Facility (EFSF), as well as stepping up the role of the IMF.
Urpilainen reportedly does not see any embarrassment in bringing in the IMF, saying that if what happens in Europe affects the entire global economy, then it is a natural consequence to want to have a broader shoulder to lean on when resolving the crisis. Finland has been arguing for some time that the IMF should take on a bigger role in the process.