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Public Economy At The Times Of Uncertainty

Economy is an interesting topic, and when it comes to public economy

, everyone, and I do mean everyone, seems to have an opinion of how the government money should be used.

The current moment is alarming. Governments in Europe are taking more and more debt in order to keep public services available. Some like Greece are sinking under their depth, but even Finland, which public economy has been well taken care for, there is a need to get more debt for supporting governments services.

The most common way for any government to react in this situation is to take more debt or make cuttings in public sector services. These both might not be the most recommended things to do in the uncertain economic situation. Public sector cuts can reduce domestic demand and weaken employment possibilities. More debt will just deepen the economic situation of the country and healing will take even more time.

Many specialists do not see the cuts of public services as the solution for this situation. For example STTK, one of the three trade union (in Finnish: ay-liike) confederations in Finland, have set the statement where they argue that public sector should stop taking more debt; instead, government should vigorously build a longer-term program, with the aim of balancing the public economy, as well as promoting growth and employment. This governmental program should include the labor market solution that could increase stability and predictability of the working life and have concrete action points for extending careers in all its various stages.

There are a couple of things making these goals hard to reach. For example extending careers is not in the hands of government only: the studies have shown that most problematic for the aims to extend careers are the attitudes of employers. But there are issues the government can straightforwardly affect, like delays the cuttings of public sector and delays of tax increases. If these two would be done, it will support domestic employment and economic growth in a situation where economic growth seems to be waning. These would also ensure the citizens purchasing power, business competitiveness and employment.

by: Sara Henski
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