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On Wednesday, chairman of the Social Democratic Party (SDP), Antti Rinne, announced that he will begin government negotiations with four other parties, namely the Centre Party, the Green League, the Left Alliance and the Swedish People’s Party (SPP).
This list crucially leaves out the two runners-up in the April parliamentary election, the populist Finns Party and the conservative National Coalition Party (NCP), who were routed by a very narrow margin by the winning Social Democrats and will move into the opposition for the upcoming term. Petteri Orpo of NCP was in attendance at Rinne’s press conference on Wednesday, but the Finns Party leader, Jussi Halla-aho, was not.
Rinne’s decision came after his party had sent a set of 10 key policy questions to all parliamentary parties, and was presumably based on the parties’ responses.
A left-leaning coalition
It appears the Social Democrats will be able to assemble a majority coalition with the chosen parties. The current five-party set up gives Rinne a comfortable 117-seat majority in the 200-seat parliament and, as the likely prime minister told the press on Wednesday, the five parties represent 55 percent of the electorate. Most importantly, such a coalition would be comprised mostly of left-wing parties, the only exception being the Centre Party, led by exiting PM Juha Sipilä.
Should these negotiations succeed, the new government will likely seek to reverse at least some austerity measures of the previous government, since SDP was a vocal critic of the Centre Party’s so-called “active model,” which sought to raise participation in the labor market and thus reduce public spending. The move from leading the opposition to leading the government should allow Rinne to increase public spending, which would provide additional funding for certain public services that have been seen as under-funded of late. The most controversial of these is surely the field of elderly care, following a media scandal involving terrible conditions in a certain private health care provider.
It is not yet clear how the Social Democrats would secure additional funding for Finland’s sprawling welfare state services, but the two main options at their disposal are to increase public debt by borrowing or to raise taxes in some form. In any case, it is unlikely that the Greens, the Left, or the SPP would object to a plan of increased public spending, but the SDP are sure to meet some resistance from the Centre Party, their largest prospective partner in terms of the number of seats they bring to the table.
Indeed, Sipilä has already indicated the main areas of contention in a list of ten threshold demands on which, presumably, the Centre Party’s entry into government would hinge. These demands include a high employment rate of 75 percent, no corporate tax hikes and a continued commitment to the reform of regional administration. The latter was part of Sipilä’s flagship sote (health and social services) reform during the previous term, the failure of which was also the reason for his government’s early resignation.
Clearly, the Centre Party, who suffered a substantial defeat in the recent election, is nonetheless holding fast to its convictions about the need for spending cuts and looking to secure at least some aspects of their government’s legacy, most notably the lowering of the unemployment rate from around nine percent to around seven.
The fact that their seats are crucial for the formation of the government gives them a good negotiating position now, but it remains to be seen how well they will fare once a new parliament is in session, as they could easily be outvoted by the more socially-minded coalition partners.
There’s one topic, however, that defies ideological divides and the strategizing of party politics: support for global warming.
For the Greens, this was a central electoral platform, while all other parties, with the exception of the Finns Party, were quick to agree in the run-up to the election. Rinne also included climate in his preliminary questions.
In summary, it appears the Social Democrats could manage to assemble a more ideologically coherent coalition than was initially speculated, following an election in which none of the parties received more than 20 percent of the votes and commentators warned about the possibility of a political stalemate.
Challenges ahead: economic policy and immigration
While Rinne’s focus is on government negotiations, and particularly on accommodating the demands of the Centre Party, the projected SDP-led government will soon have to contend with a strong opposition in the new parliament, namely the close second Finns Party, who secured 39 seats, one less than SDP, and the NCP, who came in third with 38 seats.
As most analysts predicted, the SDP did not choose the Finns Party as its coalition partner, mainly due to disagreements about immigration. The leader of the Finns Party, Jussi Halla-aho, advocates for hardline immigration policy, including tightened border control and security, which has appealed to a large section of the electorate, but it has at the same time alienated other parliamentary parties, who condemned the nationalist rhetoric of the Finns Party campaign.
There are also differences in foreign policy between the two parties as well, since the Finns Party is quite critical of the EU for its handling of the 2015 refugee crisis and the perceived inability to protect its own Schengen Area borders. Additionally, the Finns Party was the only party not to endorse action against global warming, which will presumably be one of the main commitments of the next government.
Despite going into opposition, however, Jussi Halla-aho seems well positioned to pursue his aim of politicizing immigration, a topic that in his view is being neglected. As the leader of the opposition, he can continue to press for border security, and if the government coalition refuses to address his concerns and those of his rather sizeable voting base, the Finns Party could potentially become even more popular by the next election cycle.
Petteri Orpo, leader of NCP, has already extended a cooperative hand to the Finns Party, citing economic policy as possible common ground between the two opposition parties. Economic policy is likely also the reason the NCP was not invited to coalition talks by Rinne.
For Rinne, it appears he had to make a choice between the Centre Party and the NCP as their main coalition partner, in order to secure enough seats, although neither of these parties actually aligns with their values.
The Centre Party nonetheless seems like the better option, since their focus is on rural communities and decentralized power, while the NCP’s focus on free-market policies and privatization, addressing its affluent urban voting base, clashes more significantly with the SDP’s support for the welfare state and strong trade unions. Undoubtedly this was the decisive factor in choosing not to invite the NCP to join government negotiations, despite the fact that they hold more seats than the Centre Party.
However, this leaves the Social Democrats and their potential government beset by two strong opponents on two different fronts. While the Finns Party will strive to bring immigration center stage, the National Coalition Party will probably oppose proposals for increased public spending in favor of market-based solutions, and the Centre Party is likely to find in them an ally against high corporate taxation.