June 12, 2017 / 11:49 AM / in 2 months

Finnish PM to break up coalition, kick out nationalists

Finnish Prime Minister and Centre Party chairman Juha Sipila attends a news conference at the PM's official residence Kesaranta in Helsinki, Finland, June 12, 2017. LEHTIKUVA/Jussi Nukari/ via REUTERS

HELSINKI (Reuters) - Finland's Prime Minister Juha Sipila will break up his three-party centre-right coalition, saying on Monday he wanted to eject the nationalist Finns Party, days after the Finns chose a new anti-immigration leader.

Analysts said Sipila would most likely seek replace Finns Party with two small opposition parties. That would secure a narrow majority in the parliament and help keep his fiscal policy and reform plans on track.

The Finns party, the country's second-biggest parliamentary group, on Saturday chose Jussi Halla-aho as its new leader and replaced three deputy leaders with anti-immigrant hardliners, steering the moderate protest party towards a more radical right-wing populism.

Sipila and Finance Minister Petteri Orpo from the third coalition partner, the pro-European Union National Coalition Party, said they could not cooperate with the Finns party anymore, citing differences in core values and in the immigration and EU policies.

"One must not fall in love with this occupation so much that one's values are put for sale," Sipila told public broadcaster YLE.

Halla-aho, who wants Finland to leave the European Union, was fined by Finland's Supreme Court in 2012 for comments on a blog that linked Islam to paedophilia and Somalis to theft.

"We are already facing decisions, like development of EU's defence cooperation, at the European Council's next meeting. This, in a way, means deeper integration, which he opposes... We cannot have uncertainty about these processes and decision making," Sipila told a news conference earlier on Monday.

Lawmakers in Centre Party and NCP approved the break-up in party meetings, meaning that Sipila will now ask the country's president for permission for the resignation of the government.

Sipila said he was aiming to form a new coalition with a parliament majority as quickly as possible. The Centre and National Coalition parties have just 86 of parliament's 200 seats.

Finnish Minister of Finance and National Coalition chairman Petteri Orpo (L) and Finnish Prime Minister and Centre Party chairman Juha Sipila attend a news conference at the PM's official residence Kesaranta in Helsinki, Finland, June 12, 2017. LEHTIKUVA/Jussi Nukari/ via REUTERS

"These may become tough negotiations, and they may be long too. But my aim is that the government programme would be as close as possible to the current one," Sipila said, without naming preferred new partners.

Halla-aho posted a message on Facebook, saying he would have liked to continue in the coalition, but Sipila and Orpo had not agreed to his demands for tougher immigration policies.

Reforms

Slideshow (3 Images)

Snap elections are rare in Finland, which has been run by coalition governments with strong majorities for decades. Analysts said the most likely way forward would be to bring the smaller Swedish People's Party and Christian Democrats into the government.

Both have said they are ready to negotiate. Such an arrangement would give the new coalition 101 of parliament's 200 seats.

"That will be a coalition with a very narrow majority, and the parties will not come to rescue the government for free," said Ilkka Ruostetsaari, professor of politics at the University of Tampere.

For Sipila and Orpo, at stake are major healthcare and local government reform, which are key to their plan to balance public finances. The government has outlined its plans but has yet to agree on details.

"The two parties have lots at stake in this government, but apparently cooperating with the Finns party from now on is a bigger risk than compromising the reforms," Ruostetsaari said.

Finland is recovering from a decade of stagnation. The government has sought to improve growth and curb public debt growth by cutting spending and reforming labour laws.

Finland's 10-year government bond yield nudged higher after the PM's announcement, widening the spread over benchmark German Bund yields to its greatest in almost three weeks.

Reporting by Tuomas Forsell and Jussi Rosendahl; Editing by Larry King

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