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The EU's fiscal rules were recently reformed due to significant shortcomings in the previous fiscal framework. Now it seems very uncertain whether the new framework provides decisive help in tackling the challenges.

The seminar organised by the National Audit Office's fiscal policy monitoring function on 13 February 2025 discussed how the EU fiscal policy rules, reformed in 2024, function. In this blog post, I will go through the logic behind the rules.

The reform of the EU fiscal rules is complete, but will it solve the debt sustainability challenges or add more complexity? A seminar organised of the National Audit Office of Finland (NAOF) brought experts together to assess the impacts of the reformed EU rules on fiscal policy at both the EU and national level.

The new EU fiscal rules bring changes to the calculation of government debt projections. In view of debt sustainability, it is good that in future debt projections, the decisions made are based on more accurate information.

In the new EU fiscal framework, the change in the debt-to-GDP ratio is more important than the ratio as such. As Finland's debt is projected to grow in the coming years, the need for adjustments is high.

The National Audit Office of Finland (NAOF) is currently auditing the funding of energy solutions for the green transition and the knowledge base for climate policy. But how have Supreme Audit Institutions (SAIs) around the world assessed climate action in their work?

While Finland’s NATO membership involves significant costs, there has been little or no discussion about it’s financial impact. Based on publicly available information, these costs may amount to billions.

Availability of workforce will become a bottleneck for the growth of Finland’s battery sector unless training is made a high priority. Otherwise, the inputs already made in innovations, production, skills and competence will come to nothing. The Ministry of Education and Culture is well placed to ensure the availability of skilled workforce for the battery sector and should recognise its responsibility in this area.

It has been emphasised in the public debate and in Finland’s national battery strategy that sustainability (or responsibility) provides Finnish industries with a competitive advantage. In the battery sector, sustainability can refer to many different things, such as legislation, approval of the local community (social licence), circular economy or a small carbon footprint.

The debt sustainability analysis will play a key role in the reformed debt rules. The preliminary calculations made by the fiscal policy monitoring function outline the need to adjust public finances in the coming years. Due to the significant impact of the framework, it would be desirable to have a broader social debate on the subject.

The EU's debt rules will be reformed this year. The new rules will affect, for example, the speed and time at which the Member States must reduce their debt ratio. The need for fiscal adjustment, i.e. tax increases and expenditure cuts, is assessed specifically for each Member State by means of the debt sustainability analysis.

By carrying out competitive tendering for contracts on a regular basis, contracting entities are free to choose their contractual partners and ensure that they can get the goods and services with the best price and quality. However, contracts between government agencies and companies may also lead to long-term partnerships. Such contractual relationships involve risks but they can also bring benefits.