The purpose of fiscal policy is to look after national resources in a socially responsible manner.

Economic policy has a major impact on the national economy, and can be seen as an overall designation for measures implemented by governments and parliaments to influence the macro-economic situation. Economic policy employes several different political tools.

The purpose of stabilisation policy is to neutralise cyclical fluctuations and their consequences, e.g. unemployment and inflation.

Resdistribution policies aim to even out incomes and wealth between different social groups.

Structural policy aims to achieve a more efficient use of resources through, e.g. high levels of employment and productivity.

National budgets

National budgets are the governments’ way of mapping out the direction of economic policy. Governments use budgets to pursue their policies, and the effects can be felt in households, businesses and other organisations. The state budget itself is affected by external circumstances such as the general domestic and international macro-economic climate.

Tax policy is closely linked to the national budget and economy.

Co-operation on national economics and state budgets

The Nordic Council of Ministers’ co-operation in the economy and finance sector is designed to encourage a closer working relationship on fiscal and economic questions.

The over-arching objectives are stable and sustainable economic growth; development of the Nordic welfare model; economic integration in the Nordic Region, the Baltic Sea Region and Europe; and the promotion of joint Nordic interests at international level.

To achieve these goals, financial support is provided to various instruments, e.g. via working groups, seminars, conferences and a range of studies. Specially drafted guidelines govern the allocation of funding.

In order to meet global environmental targets, and to alleviate the economic and social consequences of global warming, economic instruments will assume greater importance in Nordic co-operation throughout 2009.

The Environment and Finance Group, a permanent body in the sector, questions and analyses the links between financial instruments and environmental impact.

EU affairs

EU issues are afforded high priority within Nordic co-operation. This is reflected in the systematic consultation and co-operation on EU issues in the financial and economic sectors.

Several EU-related questions that fall under the auspices of the European Economic and Financial Affairs Council (ECOFIN) are expected to become highly topical.

Freedom of Movement

Other areas are expected to become important elements of the work in this sector, e.g. work to promote freedom of movement between the Nordic countries; systematic consultation and co-operation on tax questions; and ongoing collaboration on incorporating the economic dimension more clearly into the Nordic strategy for sustainable development.

Work in the area is supported by a number of working groups, including the Nordic Economic Group, the Nordic Environment and Finance Group and the the Nordic Tax Authorities Group.

These groups are expected to provide key input into the Committee of Senior Officials and the Nordic finance ministers.