Social inequality is in danger of growing in Finland. On Tuesday, the EU Commission expressed its concern about this risk. In addition to Finland, the commission drew attention to the risk of inequality in eight other EU countries.
In addition to Finland, there is a risk of increasing inequality in Bulgaria, Spain, Italy, Greece, Latvia, Lithuania, Luxembourg and Romania.
For the first time, the Commission proposed a Council Recommendation on intellectual capital. On Tuesday, Finland got more attention because of its economic situation. The intellectual capital recommendations were part of the same package of the EU Commission’s economic policy semester.
The EU’s competitiveness is the main theme
Information manager of the Finnish representation of the European Commission Ismo Ulvila says that the Commission’s economic policy semester is published twice a year, in autumn and spring. In it, the commission makes various recommendations.
“The larger framework of the autumn package was that these are recommendations and conclusions related to the competitiveness of the EU. There are many sub-reports in the package, there are fiscal reports and employment issues. There are nine sub-reports in total,” says Ulvila.
Attention was paid to social equality in the employment part of the package.
According to Ulvila, the EU’s competitiveness has both structural and, for example, education-related challenges.
Measured with 17 meters
The package contains country-specific estimates of the development of social inequality.
Social equality was assessed using 17 different metrics. The critical points for Finland were high unemployment, reduced employment, high youth unemployment, growth in long-term unemployment, the proportion of 18-24 year olds who drop out of education and also people’s own experience of being left without healthcare services. Although queues for primary health care were shortened, non-urgent specialist services such as mental health services were felt to be inaccessible.
The risk of being marginalized increased
In Finland, youth unemployment was 18.8 percent in 2024, while the EU average was 14.9 percent.
There were 9.6 percent of 18–24-year-olds who dropped out of their studies. Although the proportion did not increase, it was highlighted in the report because it was pointed out that at the same time, the 39.1 percent of young adults in Finland with higher education is below the EU average of 44.1 percent. The report also mentioned the 2022 Pisa results, according to which a greater proportion of children and young people did not reach the necessary basic skills.
In Finland, 16.8 percent of adults were at risk of poverty and at risk of social exclusion. Among the children, the risk of poverty and social exclusion was 17.3 percent. The risk of poverty and the risk of marginalization had increased in Finland.
Despite the growth, Finland was still below the EU average in these risks. On average in the EU, 21 percent of adults are at risk of poverty and exclusion, and 24.2 percent of children.
A more thorough analysis in the spring
An even more thorough analysis of the nine countries that received comments, including Finland, will be made next spring.
According to Ulvila, the dialogue between Finland and the Commission about the package announced on Tuesday is continuous, and will continue comprehensively at official level at the beginning of next year.
The commission raised concerns about unemployment, dropping out of school and access to health care. Ulvila points out that these matters fall under Finland’s national competence. The Commission just pays attention to things. Finland tells how things are promoted.
Li Andersson pointed out
MEP Lee Andersson (vas) immediately pointed out on Tuesday that, in addition to the economy, Finland “was placed under observation” also in terms of the growth of social inequality.
Andersson found the situation very sad and stated that it was shown by the Prime Minister Peter Orphan (kok) and the Minister of Finance Riikka Purran (ps) the effects of the government’s policy on Finland and Finnish people.
“The government has increased the inequality of Finns with, among other things, drastic cuts in social security, weakening the status of employees and, above all, by destroying people’s trust, which can be seen in both the economy and employment,” Andersson said in the press release.
“The need for a change of direction is acute”
In Andersson’s opinion, falling into the monitoring category of the economy and social development are intertwined.
“Getting caught up in the excessive deficit procedure certainly takes the main attention in the public eye, but this report deserves equal visibility and weight. It speaks harsh language about the fact that Finnish society is becoming more unequal and social problems are getting worse. The need for a change of direction is acute,” Andersson said.
In the Commission’s package, social equality was also measured by how much the richest fifth earns compared to the poorest fifth, the gender employment gap, the share of 15-29 year olds outside of education and training, household disposable income per person, employment of the disabled, the share of income spent on housing and the share of children under 3 in day care.
Citizens’ digital skills are good
Although some of the indicators were alarming for Finland, Finland was also top in some of the indicators. Finland is still exemplary in the EU in how well social benefits (not including pensions) are able to reduce poverty. This has slightly weakened in Finland, but is still the top of the EU.
Finland was also at the top in the skills of its citizens. 82 percent of the adult population in Finland has at least basic digital skills. 51.8 percent of adults had participated in education during the last year, and that too exceeded the EU average.
Competitiveness is the main theme
The package calls for urgent measures to be taken to solve the structural challenges related to intellectual capital that harm the EU’s competitiveness. The Commission’s goal is to promote education and skills that are needed in strategic sectors for the EU’s economy.
Strategic areas include, for example, clean transition, circular economy, low-carbon industry, health and biotechnology, agriculture and bioeconomy, as well as the defense industry and the space sector.
The recommendation also urges to invest in education programs in natural sciences, mathematics, engineering and technology and to get the weakened basic skills on the rise again.
According to Ismo Ulvila, the cost of living has been brought up when talking about competitiveness, because living in many EU countries is expensive.