True Finns election gains cast fresh doubts on EU

Jyrki Katainen Finland April 2011_Picnik.jpg

Finnish voters threw sand in the gears of European Union plans to bail out Portugal on Sunday (17 April) by thrusting the anti-euro True Finns party into a crucial role in parliament and possibly into government.

Jyrki Katainen, the country's finance minister and vice-president of the centre-right European People's Party (EPP), is set to become Finland's next prime minister.

But he faces the task of keeping on a pro-Europe course while heeding voter discontent which turned the populist, Eurosceptic True Finns party into the country's third parliamentary force.

The centre-right National Coalition narrowly won with 20.4% of the final vote but the True Finns made the biggest election gains of any party, garnering 19.0% compared to 4.1% in 2007, which means they are likely to be involved in talks on forming a government.

Finland's parliament, unlike others in the euro zone, has the right to vote on EU requests for bailout funds, meaning it could hold up costly plans to shore up Portugal and bring stability to debt markets.

Portugal bailout 'a bad deal': True Finns

The strong showing for the populist True Finns reflects growing public frustration in some EU states with stronger economies, notably Germany, at having to foot the bill to bail out the weaker economies such as Greece, Ireland and Portugal.

Charismatic True Finns leader Timo Soini said he wanted to change the terms of the bailout for Portugal.

"The package that is there. I do not believe it will remain," Soini said on public broadcaster YLE, referring to the rescue package being worked on for Portugal, the third eurozone country to need a financial rescue after Greece and Ireland.

The opposition Social Democratic Party, which supports the EU but is critical of current plans to aid Portugal, won 19.1% support.

Prime Minister Mari Kiviniemi's Center Party suffered the biggest setback, dropping to just 15.8% of the vote compared to 23.1% in 2007. She said it would go into opposition.

The True Finns leader later told Reuters his aim was for Finland to "pay less to Brussels". "It is a bad deal," he said of the Portugal plan.

Soini said the party would at least "get an invitation to talks" on a new government, which is expected to be formed in mid-to-late May.

Analysts anticipate that the talks, in which the pro-EU National Coalition will seek to gain a majority in the 200-seat parliament, will be difficult.

New PM-in-waiting strongly pro-European

That task will be led by the party's 39-year-old leader Jyrki Katainen, the finance minister of the outgoing coalition who is likely to be appointed the next prime minister.

Analysts have said he could demand that potential allies agree to the bailout, although the narrow vote puts him in a tough negotiating position.

Katainen, 39, has had challenges before: as finance minister in the coalition before Sunday's election he steered Finland through a recession.

He also has steadily moved his centre-right party closer to the centre and has now given it the leadership of government for the first time in 20 years.

But forming a new coalition which matches his Europhile inclinations with the more Eurosceptic stance of True Finns leader Timo Soini will be hard.

Katainen, who grew up in a small town in central Finland and was a part-time teacher before entering local politics in his early 20s, noted that Finnish parties had always worked for compromises. "It is our duty to form a majority government," he said on Sunday.

Strongly pro-European, Katainen is a vice-president of the European People's Party (EPP), a grouping of centre-right parties in the European Parliament.

His party wants a cut in corporate tax to help create jobs and boost economic activity. It is also the most eager to promote nuclear power projects in the Nordic country.

As Finland's public debt is set to rise, the party is seeking to stabilise long-term finances by reforms such as raising the retirement age and halving the number of municipalities.

Retirement is a likely deadlock, since Social Democrats have said they will not enter a government that plans to raise the minimum age.

(EURACTIV with Reuters.)

The Finnish government recently faced too much domestic resistance to back higher guarantees for the EU's temporary bailout fund, the European Financial Stability Facility (EFSF).

Jyrki Katainen, Finland's finance minister, has been favourable to raising the fund's capacity but faced opposition from nationalists, represented by the True Finns party.

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