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OECD Economic Surveys: Finland 2006

image of OECD Economic Surveys: Finland 2006

This 2006 edition of OECD's periodic survey of the Finnish economy opens with a general assessment of recent economic performance and key economic challenges.  Among the challenges it addresses in more detail in succeeding chapters are ensuring fiscal sustainability in the face of imminent ageing, restricting early retirment to make the pension reform a success, increasing flexibility in centralised wage agreements, and using active and passive labour market measures to meet the employment target. This issue's special feature discusses reducing risks and improving policies in the housing market.

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Ensuring Fiscal Sustainability in the Face of Imminent Ageing

Past tax cuts, expenditure slippage and imminent fiscal pressures from ageing have exhausted the scope for further income tax cuts, even though the latter would help to improve labour market performance. The key to long-run fiscal sustainability and reducing future tax pressures is containment of public spending pressures. This will require improved productivity in public services, re-organising municipal finances and allowing private funding for some of the growth in non-core welfare services.

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