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flag Finland’s 2025 deficit hits 4.5% of GDP, triggering EU sanctions over fiscal mismanagement.

flag Finland, once a model of fiscal responsibility and Europe’s happiest nation, faces a severe economic crisis as its 2025 budget deficit is projected at 4.5% of GDP, exceeding the EU’s 3% limit, and debt is expected to reach 90% of GDP. flag The European Commission has triggered the Excessive Deficit Procedure, risking fines and loss of EU funds. flag The downturn stems from weak growth, rising welfare costs, a sharp rise in defense spending—now over €6.2 billion in 2024—driven by security concerns over Russia, and the near-collapse of trade and tourism with Russia following the war in Ukraine. flag Bilateral trade with Russia has dropped nearly 93% since 2021, border closures have disrupted regional economies, and energy dependence on Russia contributed to higher prices. flag While the precise fiscal impact of lost trade remains unquantified, officials confirm it has weakened economic activity and tax revenues.

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