April 19, 2015 / 5:23 PM / in 2 years

Millionaire businessman wins Finland vote, euroskeptics take second place

Chairman Juha Sipila (R) of the Centre Party has a selfie taken at the party's parliamentary elections reception in Helsinki April 19, 2015, after the results of the votes. REUTERS/Markku Ulander/Lehtikuva

HELSINKI (Reuters) - A millionaire former telecoms executive touted as a technocrat capable of rescuing Finland from economic slump won Sunday’s parliamentary election, but he will likely need coalition support from a second-placed euroskeptic party critical of any more Greek bailouts.

Opposition Centre Party leader Juha Sipila, who advocates a wage freeze and spending cuts to regain Finland’s competitiveness, beat pro-EU and pro-NATO Prime Minister Alexander Stubb after four years of policy stagnation and a bickering coalition.

“Three years ago, we were seen as a sunset movement, but not anymore!” Sipila said in a speech to his cheering party members. “Finland is in a very difficult situation. We need exceptional degrees of cooperation so that we can overcome the difficulties.”

He may depend on the euroskeptic Finns Party, formerly known as the True Finns, to form a government. If so, the resulting coalition could increase Finland’s hardline stance over bailouts in the euro zone just as the battle for Greece’s future in the bloc nears a climax.

Based on 99.8 percent of votes, state broadcaster YLE forecast Sipila’s party won 49 seats in the 200-member parliament, while the Finns won 38 seats. Stubb’s center-right National Coalition scored 37 seats and center left Social Democrats 34 seats.

The anti-immigration Finns Party’s success echoes a Nordic-wide growth in populist parties amid unease over policies of traditional parties, especially with immigration. Some mainstream parties have refused to deal with rightists, as in Sweden where the populist Sweden Democrats came third in last year’s election.

But Sipila says he is open to including the Finns Party in a coalition even though they could complicate ties with Europe because they oppose bailouts and want to kick Greece out of the euro zone. Any third bailout for Greece may now face obstacles in the Finnish parliament.

“If the Finns go to government, I believe Finland’s policy towards Greece will change. It will change for the better, because it can’t get any worse,” Finns Party leader Timo Soini told reporters.

But for voters, their concern has been their own economy, mired in three years of recession while shackled by the shrinking of its flagship Nokia, rising labor costs and a diminishing working population.

Standard & Poor’s last year cut Finland’s rating to AA+, citing growth problems and political indecisiveness. That strikes a contrast with the rest of a largely buoyant Nordics.

An assertive Russia on its 833 mile (1,340 km) border and not only hit Finland’s trade but sparked debate in Finland about NATO membership. Stubb was the only candidate openly pro-NATO.

COALITION TALKS AHEAD

Weeks of coalition bargaining may now lie ahead with Sipila needing two of the three runner-up parties to form a majority coalition. Traditionally, the second-placed party is awarded the finance minister post, although Soini has hinted he wants the foreign ministry.

The Finns Party, with 17.6 percent of the vote, performed worse than in the last 2011 election, when it won 19 percent. Then it spooked markets but won over voters with criticism of EU financial rescues for euro members during the debt crisis.

Soini then refused to join the pro-bailout government coalition. The populist leader has said he now wants power, and some observers say he has softened his tone over Greece.

“It looks like a very good result for the Finns party. It will be hard to disregard them in forming the government,” said Ilkka Ruostetsaari, professor of politics at University of Tampere.

Sipila said he would talk with other party leaders on Monday. “The most important thing will be trust between the parties, then agenda issues. I wouldn’t primarily look at the ranks in the election result,” Sipila told broadcaster YLE.

Many Finns want to avoid the fate of the last four years of political bickering. The government failed on plans to reform health care and local government budgets, and it canceled some spending cuts.

The Centre Party was in power for many years after the Second World War. But Sipila, who favors austerity and trimming welfare, is mostly an unknown quantity. When in opposition, Sipila’s party, along with the Finns, voted against the second Greek bailout.

Respected as a businessman in startups and telecommunications, he has backing of the urban middle class and rural conservatives that form the grassroots of his party.

Sipila is a member of Word of Peace, part of a Lutheran revival movement, and sets himself apart from more secular-orientated political leaders.

The likely new prime minister has a huge task ahead. The Finnish economy has been hit by weak private consumption and turbulence in neighboring Russia, a major trading partner. It is expected to grow just 0.5 percent in 2015, according to the finance ministry.

Editing by Alistair Scrutton and Cynthia Osterman

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