Finland’s incoming government program violates national and European legislation by threatening central bank independence, the Bank of Finland said in a letter to the designated prime minister.
Sections of the coalition program unveiled on Friday are “problematic,” as they go against a key element of central banks’ autonomy that prohibits taking instructions from other parties in performing their duties, according to the letter to National Coalition Party head Petteri Orpo, dated June 17 and co-signed by central bank Governor Olli Rehn.
It quoted part of the plan stating “the government monitors and strives to manage the financial risk created for the state through the European Central Bank and the Bank of Finland. Finland is pushing for the implementation of the no bailout rule also at the level of the European Central Bank. Finland is advocating for measures to limit the systemic risk of the Eurosystem.”
The program announced by the 4-party bloc, which also includes the anti-immigrant and euro-skeptic Finns Party, is focusing on measures to strengthen the Nordic nation’s deteriorating public finances and boost growth, including through sales of state-owned assets. It said it plans to champion more prudent fiscal discipline in the European Union and push “for returning to the no-bailout principle of market discipline as enshrined in the EU Treaty and for introducing a debt restructuring mechanism.”
Read More: Finland New Ruling Bloc Unveils Program Focused on Austerity
