HELSINKI (AFP)--Finland's economy minister said his government must increase borrowing to curb unemployment and boost the economy if it does not start to recover by August, in comments published Tuesday.
"If the real economy has not started to straighten out and unemployment is soaring towards 11 percent when the August budget negotiations come around, the government has to take a bolder, more stimulating approach," Economy Minister Mauri Pekkarinen told daily Turun Sanomat.
Pekkarinen said it was possible the economy could shrink by nearly 7% this year, if demand for Finnish mobile phones and cruise ships did not start to pick up.
Pekkarinen said the government shouldn't hesitate to use borrowed money to tackle increasing unemployment.
"Finland cannot let the dive deepen, because that would result in a crumbling of the real economy," he said, adding that borrowing would cause the public debt to exceed the 68% of gross domestic product reached during Finland's previous economic crisis in the 1990s.
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(END) Dow Jones Newswires
June 30, 2009 06:07 ET (10:07 GMT)
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