Finland - Domestic policy

During her campaign, Jaatteenmaki stated that she would address unemployment as a top priority; her stated goal for 2003 is "full employment" (which means not more than 5% unemployment). She also promised to lower taxes and increase family allowances.

Most of the tax reductions Jaatteenmaki was proposing would come from taxable income and corporate taxes. Finland's tax burden was a central issue of the 2003 campaign. Finland's strong socialist policies will make it difficult to cut taxes without sacrificing government programs. And, like almost all sectors of the global economy, Finland's high-tech businesses, led by telecommunications firm, Nokia, are suffering from the downturn in business worldwide, and were generating less revenue to be taxed. Moreover, the government intends to raise the average age of retirement (currently below 60 years), a move that is not likely to be popular with the citizenry.

Jaatteenmaki's government has as its motto "employment, entrepreneurship, and common solidarity." To accomplish this, the Center Party will have to work closely with its previous opponents, the Social Democrats. Ville Itala, the chairman of the National Coalition Party, said that the decision of Paavo Lipponen not to participate in the new government may bode ill for Jaatteenmaki, undermining her government. Itala predicts there may be new elections may be called for sooner than the scheduled traditional four years.

Like her, Jaatteenmaki's predecessor, Paavo Lipponen made it clear that economic recovery would continue to be the government's highest domestic priority. Although his first government succeeded in cutting the 1995 unemployment rate nearly in half (to below 10% by conventional measurement), the new government hoped to reduce it further, to below 5%. Reduction of public debt to below 50% of GDP is another goal, which will be aided by the planned sale of government shares in industry.

Economic growth with low inflation was impressive under the Lipponen government. Lipponen had refused to promise significant tax cuts until public debt was reduced and deficit spending was curbed. This was a central issue in the electoral campaign. Lipponen was criticized in 2002 for too strict a fiscal policy by Etla, the Finnish financial research institution. Lipponen rebutted the criticisms in a newspaper column, saying his policies for 2003 were clearly stimulating, but his narrow loss to the Center Party indicates that not all voters were convinced.

In 2002, Lipponen took a strong stand in support of the construction of Finland's fifth nuclear power plant, which jeopardized his coalition's support by the Greens, who adamantly oppose nuclear power. As of early 2003, it remained to be seen what direction the Jaatteenmaki government would take with regard to nuclear power.

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