HELSINKI—The euroskeptic leader of Finland's
nationalist party, the Finns Party, will become foreign minister in
a three-way coalition cabinet that has vowed to repair the
country's recession-choked economy through deep spending cuts.
The Finns Party leader, Timo Soini, will serve in the government
of Juha Sipila, who is set to become Finland's next prime minister
after leading his centrist party to victory in last month's general
election.
Departing Prime Minister Alexander Stubb, an avowed supporter of
the European Union, will be the coalition government's finance
minister.
The political rise of Mr. Soini, from head of a fringe party to
senior government minister, is emblematic of the wider surge in
anti-EU forces recorded across the continent. Mr. Soini's presence
in the Finnish government could complicate talks between Greece and
its creditors over the Mediterranean country's debt load because
the nationalist politician has been a staunch opponent of the Greek
bailouts.
"Finland respects common rules and expects other member states
to do same," Mr. Soini told reporters on Wednesday.
Yet, Finland has been mired in economic recession for the past
three years, making it harder for Finnish
politicians—whether in the opposition or in
office—to lecture other EU countries on economic
policies.
On Wednesday, Mr. Soini appeared to tone down some of his
anti-EU rhetoric. The politician, who has drawn inspiration from
British-style euroskepticism, said the incoming government doesn't
see any need for changes to the main treaties that form the legal
base of the EU.
The future government doesn't "regard the amendment of treaties
as a priority," Mr. Soini said.
Mr. Sipila's government has proposed implementing spending cuts
and other fiscal adjustment measures that will amount to 4.0
billion euros ($4.4 billion) in aggregate by 2019, or about 2%
relative to Finland's national output.
The fiscal adjustment program is aimed at stopping a rise in
Finland's ratio of public debt to national output by 2019 and to
close Finland's public funding gap by 2021.
Finland's prolonged economic stagnation has resulted in
recurring budget deficits which will push the country's debt-to-GDP
ratio to 62.6% this year, according to the European Commission's
latest forecast, from 32.7% in 2008.
Breaching the 60% debt ceiling set in the European Union's
fiscal rules has been an embarrassment for Finland, which aligned
itself with Germany as a stern advocate of fiscal discipline during
the eurozone's debt crisis.
Finland's previously high-performing economy has suffered from
permanent output losses in the manufacture of mobile handsets and
paper, formerly bedrock industries. The economy, which was in
recession between 2012 and 2014, is also held back by high labor
costs, a rapidly aging population, and EU sanctions against one of
its top trade partners, Russia.
Write to Juhana Rossi at juhana.rossi@wsj.com
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