Finnish Cabinet’s Future Hangs in Balance as Talks Soured

Finland’s government is still struggling to overcome disagreements over budget plans that had pushed it to the brink of a breakup.

The negotiations intended to hammer out a spending framework for the next four years ended up exposing tensions within the five-party coalition half way through its term. Social Democrat Prime Minister Sanna Marin and the left-leaning parties are pushing for “social justice” and are willing to spend on job creation, while the Center Party and Swedish People’s Party seek a faster return to fiscal prudence than their peers.

Progress was made in talks on Monday, but many issues still remain unresolved, Marin told reporters after adjourning the meeting for the day. The parties are exploring whether they have enough common ground to still govern together. The talks, originally scheduled to last two days, will resume at 12 p.m. in Helsinki on Tuesday, their seventh day.

“We’re seeking a solution that could work for everyone,” Marin said. “The big questions to resolve include employment, the economy and the spending framework, as well as some other topics.”

Finland is set to hold countrywide municipal elections on June 13, putting political pressure on the ruling parties who lag behind the opposition Finns Party and National Coalition in polls.

The Center Party, which is hemorrhaging support in its traditional rural stronghold, wants the government to stick to its road map of halting the growth of public debt by 2030, though it’s also willing to continue stimulus to the Nordic nation’s economy for two more years. The party’s lawmakers met on Monday and signaled they wanted talks to continue, its leader Annika Saarikko said.

Finland has run a deficit in public finances each year since 2008, and public debt relative to the size of the economy jumped to 70% last year from about 60% in 2019 on pandemic-related spending.

The parties also disagree on how to help struggling peat farmers as the cost of emitting carbon dioxide causes demand for the fossil fuel to plummet faster than expected.

“It’s possible that we come to an agreement, and it’s also possible that we don’t,” Marin said. “That’s up to whether all parties are willing to come to a common solution.”

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