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04/12/2016

Finns expected to oust Stubb government

Elections

Finns expected to oust Stubb government

Alexander Stubb

[WTO/Flickr]

Finns are expected to oust Prime Minister Alexander Stubb’s left-right coalition in Sunday’s legislative elections, amid hopes that a new government will pull Finland out of its three-year economic slump.

The Centre Party, a liberal-agrarian party that has fostered 11 prime ministers and three presidents, but has been relegated to the opposition since 2011, is expected to be the big winner on Sunday (19 April).

Its leader Juha Sipila, a 53-year-old former businessman and IT millionaire new to politics, has vowed to modernise Finland the way he has rejuvenated his party since taking over the leadership in 2012.

Known as a serious and persistent leader, Sipila has promised to create 200,000 jobs in 10 years, in a country where the unemployment rate is 9.2 percent, its highest level since 2003.

Finland’s struggling economy — a year of stagnation in 2014 preceded by two years of recession — has been the main issue in the election campaign, benefitting Sipila who was largely unknown in Finland until he took over the party leadership three years ago.

He has played up his success in business and touted his management know-how. “I have a lot of experience of how to manage companies to make big changes,” he told Finnish public broadcaster YLE.

“People want a change, and it (the Centre) has a new leader that they seem to trust,” Helsinki University political history professor Juhana Aunesluoma said.

Stubb, of the conservative National Coalition Party, has seen his government’s popularity slide since taking over as prime minister in June, when he replaced Jyrki Katainen, who went to the European Commission.

A “modern leader for a modern country”, Sweden’s former foreign minister Carl Bildt tweeted when Stubb took over the government. But Stubb has failed to push through his policies during his 10 months in office, a doomed social and health care reform a case in point.

The current broad coalition, once six parties but now down to four — the National Coalition Party, the Social Democrats, the Christian Democrats and the Swedish People’s Party — has been mired in discord, preventing it from pushing through any real reforms.

The coalition government’s popularity has consistently declined since Stubb took power: Only 11% Finns consider the government has done “good” or “very good” work, according to a poll in Finland’s paper of reference Helsingin Sanomat, published a week before the election. Some 57% of Finns said Stubb had failed at his goals — the main one being to get the economy on track after a three-year slump.

While polls have long predicted a Centre victory on Sunday, it remains unclear which other parties Sipila is likely to seek out to build a coalition.

Surveys show three parties are neck-and-neck for second place behind the Centre: the Social Democrats, the National Coalition and the eurosceptic right-wing Finns Party, currently in the opposition.

A fresh poll published Thursday by public broadcaster YLE credited the Centre Party with 24 percent of voter support, putting it in the lead, ahead of Stubb’s National Coalition with 16.9 percent, the Finns Party with 16.7%, and the Social Democrats with 15.1%.

The building of a coalition is expected to take weeks, with thorny negotiations to reach a common platform.

Brussels to watch closely

Once a new government is formed, it “will have a lot of decisions to make immediately”, Aunesluoma said.

It will have to get to work to bring Finland’s budget deficit under three percent of GDP, all the while boosting investments and creating jobs, while coping with one of Europe’s most rapidly aging populations.

“The government has to think about what it can do to help Finland’s businesses recover from their current problems, to renew the economic structures and increase productivity and put Finland on the track where it was before the financial crisis started some years ago,” Aunesluoma said.

The Finnish election result is expected to be watched closely in Brussels. Finland has been one of the most reticent eurozone members, if not the most, when it comes to bailing out debt-laden Greece.

The Centre Party has a Eurosceptic faction, though Sipila is known for being pro-EU, with a pragmatic approach to EU affairs. The Finns Party, however, is fiercely Eurosceptic, and the two parties collaborating together could make Finland a difficult negotiating partner for Athens.

But Jan von Gerich, an economist at Nordea bank, doesn’t expect Sipila to rock the EU boat from the start. “As a third bailout package for Greece looms, will it be Finland that blocks it? Probably not,” he predicted.

Background

Stubb's conservative National Coalition Party was the big winner in the last legislative elections in 2011, and again in the European elections in May 2014.

But now it is credited with barely 17% of votes, is running neck-and-neck with the Social Democrats and the right-wing Eurosceptic Finns Party, and us far behind the agrarian-liberal Centre Party, which is expected to come out on top, credited with 24 percent of voter support.

Up until June, Stubb, with a stellar smile and Nordic good looks, looked like he could do no wrong.

He served as a member of the European Parliament from 2004 until 2008, as Finland's foreign minister from 2008 to 2011, and then European affairs and foreign trade minister until 2014 -- all the while building up an impressive international network of world leaders.

Stubb embodied dynamism and energy in a country struggling with one of the most rapidly aging populations and with two pillars of its economy -- forestry and technology -- in decline.

During the election campaign, he has asked voters to give him more time to pursue his reforms, stalled amid discord in his four-party coalition. Stubb has vowed to cut income taxes by up to two billion euros ($2.15 billion) over the next four years, and freeze index-based benefit increases.

Timeline

  • 19 April: General elections in Finland