April 20, 2015 / 5:34 PM / 3 years ago

Close to power, Finnish populists tone down anti-Athens policies

HELSINKI (Reuters) - Finland’s eurosceptic Finns Party has the best chance of power in its 20-year history after coming second in Sunday’s election, but its calls to throw Greece out of the euro zone may take a back seat to fixing the economy at home.

Annika Saarikko, Chairman Juha Sipila (C) and Juha Rehula of the Centre Party celebrate at party's parliamentary elections reception in Helsinki April 19, 2015, after the results of the votes. REUTERS/Markku Ulander/Lehtikuva

The populist party of Timo Soini, a 52-year-old nationalist, ended up behind the opposition Centre Party of Juha Sipila, a millionaire businessman who will probably seek his support to form a coalition.

“The Finns Party can take part in the government ... I have personal trust in Soini, this is a real option,” Sipila told reporters, adding that he would start coalition talks next week.

The possible presence of the party, formerly called the True Finns, in a coalition for the first time could swing the country against helping Greece, which is struggling to stay solvent and may need a third bailout from the European Union and IMF.

Many Finnish voters are unlikely to be sympathetic as they face austerity at home, with the weak economy keeping the budget deficit above the EU limit.

However, Soini has toned down his anti-Athens rhetoric in recent weeks and campaigned mainly on other issues. These included tighter immigration controls, better pensions and criticizing Prime Minister Alexander Stubb for failing to revive the economy after three years of recession.

Soini’s party performed slightly better at the last election in 2011, when it spooked financial markets but won over voters with criticism of EU financial rescue packages for euro zone members, including Greece. Soini refused to join the coalition then because it backed bailouts, leaving his party in opposition for the past four years.

“EU affairs have not dominated the debates in this election; we have bigger problems at home,” said Heidi Schauman, an economist at Nordea. A two-page summary of the Finns Party’s “main concerns”, for instance, does not mention Greece.

Sipila’s party won 49 seats in the 200-member parliament, while the Finns took 38. Stubb’s National Coalition won 37 and his partner, the center-left Social Democrats, 34 seats.

“A populist party coming to power means it might have to make some difficult choices and compromises. Greece is one thing on which they might have to compromise,” said Ilkka Ruostetsaari, professor of politics at the University of Tampere.

Traditionally, the second largest party in Finnish coalitions wins the finance ministry, which handles euro zone negotiations on bailouts before leaders become involved. But Soini may be most interested in running the foreign ministry.

GREXIT

Soini, who heads parliament’s foreign affairs committee, has often said he wants Greece to exit the euro zone and compared the bailouts with a financial scam.

“We need a ‘Grexit’,” he told Reuters in March. “There are no easy solutions, but if Greece continues in the euro, it means more aid packages and the pyramid scheme continues.”

But last week he passed up an opportunity to berate what he sees as Greek profligacy in a debate with other party leaders when they were asked what to do about the problem. Other party leaders were also silent, until Stubb spoke up.

“May I answer on behalf of us all?” Stubb ventured, adding that it was too early to discuss a new bailout for Greece when talks were under way about implementing existing deals. “It is impossible for us to answer this question.”

Sipila’s party also once voted in opposition against a bailout for Greece but is slightly less critical of Athens than the Finns.

Soini may simply want the Finns to stop being an eternal protest party. “He has clearly avoided conversations that could close doors to the government,” said a source from the outgoing coalition who declined to be named.

A bailout for Greece, funded by the European Stability Mechanism which has already collected funds from member states, would not require a full parliamentary debate in Finland but could be approved by a grand committee of all the parties.

Populist parties have grown across the Nordic countries due to voters’ unease about the policies of traditional parties, especially on immigration.

However, entering coalitions can be risky for populists. In Norway, the Progress Party joined a government for the first time in 2013, but its popularity has fallen sharply with few policy successes on issues such as immigration, in the shadow of Conservative Prime Minister Erna Solberg.

Alastair Newton, senior political analyst at Nomura International, said Finland’s election had marginally raised the risks of a Greek euro exit, which he put at below 50 percent.

“Finland is going to be facing a domestic austerity program which is going to make it even harder to persuade Finns to vote for more concessions for the Greeks,” he said.

Additional reporting by Anna Ercanbrack, writing by Alister Doyle; Editing by Alistair Scrutton and David Stamp

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