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OECD urges Finland to deepen structural reform

Posted on Feb 13 2014 | IANS

Helsinki, Feb 13 : A latest report issued by the Organisation for Economic Cooperation and Development (OECD) urged Finland to make more efforts in the structural reform to stimulate the economy, Finnish Broadcasting Company YLE reported Wednesday.

OECD called for more measures in restructuring municipalities, raising retirement age and stricter mortgage rules, in order to promote the economic growth and deal with the aging population in Finland, Xinhua reported.

The OECD report pointed out that rising cost of pensions and healthcare for an aging population is one threat to Finland, suggesting higher retirement age and an end to part-time retirement to solve the problems in the public finance.

The report also noted that cutting down the number of municipalities and a shift towards property taxes would help to reduce the dependence of local governments on business taxes.

The Finnish government reached a structure reform scheme in August last year, aiming to tackle the "sustainability gap" in the state budget caused by the sluggish economic growth and growing population aging.

The reform measures included cutting local government spending, reducing family benefits, raising the effective retirement age and others.

Half a year after the structural reforms were carried out, no obvious improvement of the Finnish economy was observed, according to OECD.

As part of its banking reform bill, recently the Finnish government also proposed stricter mortgage regulations to restraint a potential housing bubble. The tabled measures will come into force after July 2016.

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