Finland Divided

Last month's election in Finland saw the Social Democrats top the poll for the first time in 20 years – but they were also a victory for the country's right-wing populists, who re-emerged on an anti-migrant, anti-green ticket.

On April 14th, Finns went to the polls to elect a new parliament. What was originally billed as a showdown between Finland’s right-wing government and the centre-left parties over issues like austerity, welfare, social and health care was, in the end, overshadowed by a culture war. This terrain allowed the right-wing populist Finns Party (formerly known as the True Finns) to recover its strength in a new, even more radical form. Finland now enters a period of unknowns, as the parties attempt to form a government in a situation where none received over 18 % of the vote.

Things were different in 2015. Three parties—the Centre Party, the standard-bearer of Finland’s rural areas and smaller towns, the centre-right National Coalition, and The Finns—had united to form a government. Their plan was to clash with Finland’s formidable labour movement, pursue a course of austerity, and complete the longstanding project of social and health care reform on which previous governments had failed. But the business class’ hopes for this right-wing coalition were frustrated and, four years on, Centre Party Prime Minister Sipilä had to face the cameras and tell the nation his government had resigned.

In 2012, Sipilä, a millionaire businessman who had only become a MP a year earlier, came from nowhere to muscle out his rivals for the Centre Party leadership. He promised to commit his business acumen to saving Finland, after a confused six-party government ranging from the post-communist Left Alliance to neoliberal National Coalition had muddled through a range of failed reforms and infighting. The media ate his narrative up. Sipilä enjoyed a steady rise in the polls, and Centre won the 2015 election with 21.1 percent of votes, a large (though not historically high) figure in Finland’s multiparty order.

Austerity Agenda

Arriving in office in 2015, Sipilä inherited a lost decade in the economy. The great crisis of 2008 did not, at first, hit Finland that hard, but its tail was long. Sipilä’s slogan was that he would “fix Finland” through a clash with labour and a policy of austerity. The government’s plan for labour was the so-called ‘social contract’ — taking the country’s long tradition of Nordic corporatism, or trilateral negotiations between the government, employee and employer unions, and using it to make labour accept effective wage cuts by pushing up working hours.

When the unions refused to follow Sipilä’s commands, the government threatened to pass a law to force them. The unions responded with a demonstration bringing 30,000 activists to Helsinki. In the end, however, the unions agreed to an altered version of the social contract in order to preserve the Nordic corporatist model. The proposal was renamed a ‘competitiveness pact’ and the rise in working hours was reduced from thirty minutes per day to thirty minutes per week. But many of the labour rank and file still felt betrayed.

The unemployed were the targets of another major reform, the so-called ‘activation model,’ which considerably increased means-testing in the social security system. This clashed with the government’s famed Universal Basic Income (UBI) experiment, which claimed to herald an end to all means-testing. The experiment, intended to find out how UBI would affect employment, was rigged against itself by its choice of test subjects, focusing on the long-term unemployed who were most likely to have a hard time finding work.

Most controversially though, the Centre and National Coalition made vast cuts to secondary education, going against their explicit ‘education promises’ signed in 2015 to maintain spending. University budgets were also slashed; the government promised that the relaxation of rules on private funding for universities would cover the loss of funding, but this came at the cost of allowing further business influence on the academic agenda. While the economy grew and unemployment fell, the combination of austerity, anti-labour policies and education cuts set Finland along a path to an increasing race to the bottom to bolster competitiveness. 

The Centre Doesn’t Hold

Even more important to Sipilä’s agenda, however, were reforms to health and social care. This is where the government came unstuck. There is a broad consensus in Finnish politics on the need to reform the social and health care system but, clearly, the left, the right and the centre disagree on how to achieve it. Indeed, the ruling parties’ different priorities prompted a governmental crisis in late 2015. 

Sipilä’s Centre Party was suspicious of the National Coalition’s focus on ‘freedom of choice’—a bid to increase private providers’ power to seek profits using public funds—while the National Coalition was reticent about the Centre’s plans for stronger regional administration. At the eleventh hour, Sipilä saved his government by promising to fast-track the implementation of ‘freedom of choice’ in exchange for the National Coalition accepting the regions.

The problems of private health care, a key part of the ‘freedom of choice’ plan, were made clear in late January 2019, due to the actions of a health sector union whistleblower. It turned out that Esperi Care, one of the main operators in private senior care services, had been neglecting its elderly residents to the point of abuse, and working employees to the point of exhaustion. The CEO resigned, but the damage had been done—not only to Esperi Care, but to the reputation of private healthcare in general.

In the end, the Centre was left as the sole defender of the compromise. It’s MPs maintained the façade that the reform plan was about to pass, but their supporters were increasingly deserting a party they saw as betraying their rural heartlands. Sipilä’s dramatic announcement on 8 March 2019 that the reform had failed and the government was resigning was recognising the inevitable—a few hours before, the National Coalition, still suspicious of the new regional administration model, would have scuttled the reform anyway.

Changes Right and Left

Back in 2015 the Centre and National Coalition had also been joined in government by The Finns, a right-wing populist party. Receiving the Labour Ministry in the new government, The Finns bore the brunt of the labour reform. And the party’s troubles deepened when 2015 saw 36,000 mostly Syrian and Iraqi asylum seekers entering Finland. The party’s leader Timo Soini, who had allowed the anti-migrant movement to set his party’s agenda, could do little to placate his base. 

Even so, arriving at the party convention in 2017 he didn’t expect what would arrive next. Instead of his chosen successor, Sampo Terho, winning the party leadership, it was instead taken over by a hardline faction led by anti-immigration blogger and MP Jussi Halla-aho. Soon, Prime Minister Sipilä announced that he and Petteri Orpo, Stubb’s successor as National Coalition leader, did not share Jussi Halla-aho’s values and that the Finns could not continue in government. At the last moment, the government was saved by half of The Finns parliamentary group splitting to form a new party, called Blue Reform. All of the splitters would lose their seats in the coming elections.

Despite all of this, the Finnish Left entered the electoral period confident of victory. The government’s austerity policies impacted many Finns, and the failure of the social and health care reform seemed to underscore the unpopularity of their agenda. The Social Democrats, who campaigned on breadbasket themes like adding hundred euros to the lowest pensions – a surefire hit with their elderly voters – and scrapping the “activation model” seemed like a certain winner, and, in the end, they did eke out a win. But it was much narrower than many expected. 

Their percentage of vote, around 18%, is one of the party’s lowest in its electoral history. Following them were the newly-reradicalised Finns, who skyrocketed from 8% to 17.5 % in half a year and got 39 seats, their highest-ever. The Greens and Left Alliance also made gains, though not as much as they had hoped. Both parties had been campaigning for ambitious climate targets and appealed to a younger constituency than the Social Democrats with plans like a true UBI experiment. But in the end, on the election day, many of their voters ended up voting for Social Democrats to keep the Finns from coming first. 

Forming A Government

The Finns benefitted from Halla-aho’s anti-immigrant line, as a series grooming cases and other sexual assaults in the town of Oulu fueled the xenophobic vote. In particular, The Finns exploited Sipilä’s promise to open his own house to a family of refugees in 2015 to suggest the prime minister is responsible for the actions of every asylum seeker in Finland. Even moreso, the Finns seized on the left parties’ climate agenda to pose themselves as the defenders of the common man, with his meat and cars, from the “red-greens.” The Centre and National Coalition joined this with their own populists attacks, but this mainly benefitted the Finns as people flocked to the actual populists instead. 

In the end, the party most hurt by the electoral turn to immigration and climate were the Social Democrats, who lost anti-immigration Labour voters to the Finns and were caught in the crossfire between their environmentalist platform and industrial working-class base on the climate issue. Sipilä’s Centre party crashed to around 14%, its worst result since Finland’s independence. Meanwhile, the National Coalition saved itself by consistently referring to the improved employment and economic indicators as a result of government’s austerity policies.

Now, the country enters into a period of government negotiations. Theoretically, the government could include any combination of parties. In practice, it is considered fairly likely that if the Social Democrats manage to form the government, The Finns will be right out. Left Alliance has maintained its preferred government would be a “red-green” one, with the Greens and Social Democrats. Unfortunately, such a government would have nowhere near the required number of seats. Any likely government would have to include the National Coalition or the Centre.

If the Social Democrats formed a coalition with the National Coalition, the neoliberal direction of Finnish politics would be confirmed. A coalition with the Centre poses its own risks, though it would also give an opportunity to bolster many aspects of the welfare state. Whatever the process of government formation, the Finnish left has to deal with some big challenges. How can we stop the process of welfare state degradation while maintaining economic sustainability? How can it talk about issues like the environment and migration without benefiting The Finns? In or out of the government, resolving these questions is a precondition for a real change, rather than another coalition muddle.