Finland state

Tuppurainen: Finland does not seek or support new EU common debt | New

As Europe faces an energy crisis this winter, EU countries like France are pushing for a shared debt system similar to that used to relieve the Covid-19 pandemic.

Tytti Tuppurainen said that Finland does not seek or support the acceptance of additional common debt from the EU. Image: Tiina Jutila/Yle

Finland does not advocate or support the acceptance of new common debt in the EU, Tytti Tuppurainen (SPD), said the Minister for European Affairs and Shareholding on Saturday in the program Yle TV1 Ykkösaamu.

“Finland is not looking for a new common debt for the EU,” Tuppurainen stressed.

New common EU debt – like the recovery plan designed to recover from the Covid-19 pandemic – has re-emerged as a possible solution due to the energy crisis gripping economies.

All countries have mainly supported their own economy amid the energy crisis. Germany recently announced that it would support its citizens and businesses with a substantial envelope of 200 billion euros.

But the European Commission would be able to secure a new EU at a cheaper rate than individual countries, and France is already pushing for this. On the other hand, critics of the EU in particular are opposed to the common debt.

“Finland will run out of money”

Germany’s giant package and other domestic support spending has raised concerns about EU unity. The EU single market is based on strict state aid rules to ensure that competition remains as genuine and fair as possible.

Tuppurainen went on to say that such a situation would be disastrous for Finland.

“The job of the Commission is to enforce the rules of the internal market, and Finland is a hawk in this [enforcement]. Finland will simply run out of money if countries start competing to see who can inject the most into their own businesses,” Tuppurainen noted.

Tuppurainen said the rules must be flexible so governments can support citizens and businesses. At the same time, flexibility needs to be ad hoc and carefully considered, with the EU needing to coordinate with member state governments.

“We must avoid a race to the bottom, where without coordination we start supporting our own businesses. This would lead to a complete disintegration of the internal market,” Tuppurainen said.

Nothing is ruled out yet

Finland and other EU member states are now eagerly waiting to see how Germany plans to spend its 200 billion euros.

According to Tuppurainen, it might be acceptable for Germany to spend the money on social security for households or on investments to wean itself off Russian natural gas.

“It’s still too early to judge. We don’t yet know what Germany is going to spend 200 billion euros on,” Tuppurainen said.

While Tuppurainen said Finland was not in favor of a shared EU debt due to the energy crisis, she added that it was not time to rule anything out.

“The EU should not clip its wings in advance, but should have the possibility to take exceptional measures if necessary,” she said.