Finnish Prime Minister aims to rein in spending growth

Finland's prime minister, fighting to win an election in April, said on Tuesday she wanted a line-by-line review of government spending while repeating a call for lower corporate taxes. With one eye aimed at shoring up public finances and the other at improving the business climate, Prime Minister Mari Kiviniemi said Finland had to be more judicious about spending, while offering little detail on where cuts could be made.
"We will have to practice a tight spending discipline, that is clear," Kiviniemi told Reuters on the sidelines of a campaign rally. She was meeting voters at a cafe in the town outside of Helsinki, ahead of an April 17 parliamentary election. "The growth rate of spending has to be cut. We will review all spending to see how to optimise the use of tax euros."
Finnish public spending as a percentage of gross domestic product surged to more than 55 percent in both 2009 and 2010 as the country tried to cushion the blow from the global financial crisis. In 2008, that rate was below 50 percent. Finland's economy was one of the hardest-hit by the crisis in Europe, with GDP contracting more than 8 percent in 2009.
For two of Finland's most famous exports - the products sold by handset maker Nokia and the pulp and paper generated by its timber companies - the global downturn only exacerbated problems. The finance ministry has projected spending would slip to 53.8 percent çf GDP this year.
Kiviniemi reiterated that if the Centre Party was in the new government, her party would slash the corporate tax by a couple of percentage points from the current 26 percent. She said she would ensure new jobs by co-operating with workers' unions, entrepreneurs and employers.
The Centre Party is one of four parties that are in the mix to play a leading role in the next government, including its coalition partner the National Coalition party, the opposition Social Democrats and the populist True Finns. Kiviniemi became prime minister and party chief last year after the previous head stepped down citing health and personal reasons. A scandal over party financing had plagued the Centre Party at the time and many observers say that led to the switch. The National Coalition led in the latest opinion poll, followed closely by the True Finns and the Centre Party. Kiviniemi repeated the Centre Party did not rule out co-operation with any party after the elections.