Finnish Cabinet Nears Crisis as Budget Talks Close to Deadlock

(Bloomberg) -- Finland’s five-party government edged closer to a crisis as talks over its spending framework deteriorated.

The negotiations, originally scheduled to take two days, dragged into their fifth day on Sunday, and Prime Minister Sanna Marin told reporters she “isn’t very hopeful” that a deal will be reached.

She convened the leaders of the coalition parties to a meeting that started at 11 a.m. in Helsinki to gauge their willingness to continue talks over spending limits for the next four years. A failure to agree on a budget framework would likely lead to the government’s resignation.

At the heart of the dispute is the left-leaning parties’ push to prioritize “social justice” over fiscal prudence by spending money on job creation. The Center Party led by Annika Saarikko wants the government to stick to its road map of halting the growth of public debt by the end of the decade, though it’s also willing to continue stimulus to the Nordic nation’s economy.

The parties also disagree on how to help struggling peat farmers as the cost of emission rights causes demand for the fossil fuel to plummet faster than expected.

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