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08/12/2016

Finnish government close to collapse over healthcare reform

Elections

Finnish government close to collapse over healthcare reform

Juha Sipilä [European Council]

Finnish Prime Minister Juha Sipilä said his centre-right coalition government could collapse today (6 November) if it fails to reach agreement on healthcare reforms that envisage spending cuts of up to €3 billion.

The reforms are a key part of the government’s plan to balance public finances over the long term in Finland, a eurozone member country now mired in recession.

“It is very likely that I will go to meet the president tomorrow,” Sipilä told a news conference, meaning the resignation of the three-party government.

Sipilä added that, in the absence of a compromise deal on health reform, he would prefer not to call snap elections but to form a new government from the current parliament.

Sipilä and his Centre party, which has rural roots, wants to divide the country into 18 regions where governmental bodies would decide on health care services.

But the National Coalition party, led by Finance Minister Alexander Stubb, favours a model of just five regions, arguing that a smaller number would ensure a more equal share of resources between the regions. It also says a larger number would threaten financial savings.

The third coalition partner, the nationalist Finns Party, has accepted Sipilä’s proposal.

Thorny issues

National Coalition earlier on Thursday asked for a time-out, but Sipilä said they had spent quite a lot of time already seeking a solution.

“It is not about just a number (of regions), it is about the whole structure and content of the reform,” he said.

The coalition, which took office in May, has had difficulty finding common ground on several thorny issues, including labour market reform and the handling of Europe’s migrant crisis.

The anti-immigration Finns Party has already withdrawn its support for some government plans following a steep decline in its support.

Overhauling the health care system, billed as the country’s most important reform of the decade, has long vexed politicians. The previous left-right government put the reform on hold due to disagreement among the parties as well as constitutional worries.

Finland has a generous welfare system but its population of 5.5 million is ageing fast and is also spread thinly over a large territory, with many Finns living in small, remote communities.

Background

Juha Sipilä, a millionaire former telecoms executive, won April's parliamentary elections, beating pro-NATO Prime Minister Alexander Stubb after four years of policy stagnation and a bickering coalition.

>>Read: Millionaire businessman wins Finland vote, eurosceptics take second place

Sipilä formed a coalition in May with his centre-right “Centre Party”, the Eurosceptic Finns Party, and the National Coalition Party (Kokoomus) of Alexander Stubb. The coalition has 124 seats in the 200 seat parliament.

This is the first time since 1979 that the right-wing and populist Finns Party is participating in a Finnish cabinet, and the first time that the liberal Swedish people’s Party is not.