Finnish vote could put brakes on bailouts
Published 19/04/2011 | 05:00
SIGNIFICANT gains by a eurosceptic party in Finland's general election have presented the EU with a new headache in their efforts to rescue troubled eurozone economies.
The True Finns are now poised to enter a government with the pro-Europe National Coalition led by Finance Minister Jyrki Katainen after voters used yesterday's election to protest against funding bailouts.
The True Finns, whose leader Timo Soini says taxpayers shouldn't have helped rescue Ireland or Greece, surged almost 15 points to 19pc. Katainen's group won 20.4pc to become Finland's biggest party for the first time.
Prime Minister Mari Kiviniemi's Centre Party got 15.8pc and the Social Democrats, which also opposed bailouts for the two countries, won 19.1pc. Ms Kiviniemi will lead her party in opposition after its "huge defeat", she said.
Finland's parliament, unlike others in the eurozone, 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.
Mr Soini wants to change the terms of the Portugal bailout. "The package that is there, I do not believe it will remain," he said, referring to the rescue package being worked on for Portugal, the third eurozone country to need a financial rescue after Greece and Ireland.
"They couldn't leave the True Finns out of government after this landslide," said Tuomo Martikainen, a professor in political science at the University of Helsinki. "It would be making a mockery of democracy."
The election results, which come 11 days after Portugal sought a bailout, threaten to disrupt efforts to push through Europe's crisis-handling measures. Any steps need the approval of all 17 euro members.
"Finland's government will demand new negotiations over the package or block it," Mr Martikainen said. The True Finns and the Social Democrats "would lose face in Finland if they just approved the financial aid", he said.
Mr Katainen has said he'll only work with parties that support the rescue tools. "Finland has always been a responsible European Union country," he told supporters. "I'm convinced the new government, whoever is in it, will want to continue this policy."
The True Finns will seek a majority that allows them to block the region's bailout mechanism. "Now we'll renegotiate. Our money shouldn't be thrown into mechanisms that don't work," Mr Soini said.