Finnish Cabinet’s Collapse May Hamper EU Presidency Preparation

(Bloomberg) -- The surprise resignation of Finland’s government has an unfortunate side-effect: it throws a spanner in the works of preparations for the Nordic nation’s European Union presidency.

Finland’s turn holding the bloc’s rotating six-month presidency is set to begin July 1, and the timetable already looked tough with elections coming up. Now, the government’s collapse on a political gamble by Prime Minister Juha Sipila removes policy makers’ oversight from the work to prepare for the EU presidency, leaving civil servants holding the steering wheel.

Finnish Cabinet’s Collapse May Hamper EU Presidency Preparation

Opposition Social Democratic Party Leader Antti Rinne, who polls suggest may become the next premier, told news agency STT that he’s concerned over the planning for Finland’s time holding the EU presidency amid a lack of political direction from the government in Helsinki. Work on Finland’s program for the six-month presidency, due to be published in June, remains unfinished.

The EU country in the rotating presidency, currently Romania, manages the bloc’s legislative business on behalf of the member governments as a whole. The nation in that role seeks agreements among EU governments and represents them in deliberations with the European Parliament over legislation.

Divisive Issue

The biggest issue for Finland during its presidency stint is likely to be negotiations over the EU’s next seven-year spending program, to start in 2021, which have been complicated by the U.K.’s planned departure from the bloc. Finland wants to find agreement on linking EU funds to the upholding of rule-of-law principles -- a divisive issue in the bloc. In addition, the government is keen on boosting security and defense cooperation across Europe.

Finland’s presidency also will coincide with horse-trading over the appointment of the new European Commission following the EU Parliament elections in May, as well as the naming of a successor to European Central Bank President Mario Draghi, whose term ends in October.

What the government’s resignation means for the practical preparation work is that, for instance, Finland will have difficulty putting forward its own initiatives, and responding to any unexpected consequences of the U.K.’s scheduled withdrawal from the EU may become harder.

Sipila, now in a caretaker role, sought to quell concerns on Saturday, saying the Finnish Parliament is equipped to handle setting the nation’s stance to any pressing issues.

“We have a jointly drafted program for the EU presidency and we’ll continue to work on that together,” Sipila said in an interview on YLE TV1. “I guarantee this will be responsibly handled.”

Even so, Finland will lack its full political powers until a new government is sworn in. For the nation without set political blocs, negotiations to form a government after elections often drag on.

Recent polls indicate the talks won’t be easy as any coalition is likely to need several parties -- and there are just 11 weeks between the April 14 election day and the start of the EU presidency on July 1. The EU Parliament elections in May also will take away some attention.

Political Spectrum

There are recent examples of how hard putting together a multi-party government can be. While Sipila only needed three weeks in 2015 to compile his three-party cabinet, Jyrki Katainen took almost 10 weeks to form his “six-pack” coalition of parties from across the political spectrum.

Neighboring Sweden took several tries over four months to put together a government after traditional political blocs collapsed amid the rise of the populist Sweden Democrats. In Finland, the populist Finns Party is running on a similar nationalist platform, and may complicate coalition-building negotiations as mainstream parties increasingly shun its rhetoric and principles.

“If government talks are still ongoing when Finland assumes the presidency, I’m happy to oversee the start of the presidency in a caretaker role,” Sipila told reporters on Friday. “But normally a new government is formed before July.”

©2019 Bloomberg L.P.