A major dispute has erupted between Finland's National Audit Office and the Ministry of Finance regarding government spending during the coronavirus pandemic. The controversy centers on whether the former Marin administration overspent by billions of euros beyond planned levels.
The National Audit Office released a report showing cumulative spending increases exceeded government targets by approximately 41 billion euros between 2020 and 2023. Senior economist Suvi Kangasrääsiö stands by the findings despite criticism from government officials.
Budget officials from the Ministry of Finance immediately challenged the audit office's calculations. They argue the figures include many automatic spending increases like index adjustments that shouldn't be counted as discretionary spending. The ministry maintains the actual permanent spending increases during former Prime Minister Sanna Marin's term totaled only about three billion euros.
The core disagreement stems from different methodologies. The audit office examines total spending changes across all categories, while the finance ministry focuses only on decision-based spending increases. This fundamental difference in approach explains much of the gap between their assessments.
Political figures have entered the debate. Social Democratic Party MP Matias Mäkynen criticized the report's public handling and demanded corrections. He claims the audit office incorrectly categorized spending on municipalities, cultural institutions, and border guard support as non-crisis related expenses.
Kangasrääsiö acknowledges the report's summary could have been clearer but maintains the overall findings are accurate. She expressed frustration that the report has been misunderstood despite providing what she calls the first detailed examination of pandemic-era spending increases.
The controversial section of the report's summary states that while COVID-related spending shrank to 39 percent in 2021 and nearly zero by 2024, non-pandemic spending increases grew strongly and permanently. The report attributes this permanent growth largely to spending decisions made after abandoning fiscal policy rules.
Interestingly, the finance ministry had previously reviewed the report and provided technical feedback that was incorporated into the final version. Their official statement praised the audit office's work as methodologically high-quality and particularly commended the analysis of unused appropriations.
Both institutions actually agree on a key conclusion: abandoning fiscal policy rules led to strong spending growth, permanent increases in non-crisis areas, and growth in unused appropriations. They concur that future crisis spending should be clearly limited to essential needs.
The timing of this debate matters. Finland faces ongoing economic challenges, and understanding how pandemic spending decisions affected the national budget provides crucial lessons for future crisis management. The audit office used data through 2024 as the latest available detailed budget information, while the finance ministry's estimates extend to 2026.
This dispute reflects broader tensions in post-pandemic economic assessment across Nordic countries. Governments worldwide face similar challenges in distinguishing between necessary crisis spending and discretionary increases that become permanent budget features. The Finnish case shows how technical accounting differences can spark significant political debates about fiscal responsibility.
What makes this situation particularly noteworthy is that both institutions essentially agree on the core problem—the suspension of fiscal rules led to substantial permanent spending increases. The conflict arises mainly from how those increases are measured and categorized. This suggests the real debate isn't about whether spending grew, but about how to properly account for that growth and learn from it.