Finnish coalition talks start as Sipila's party secures victory

The self-made millionaire set to be Finland's next prime minister started tricky coalition discussions on Monday as he sought to impose his business nous on the next government.

Juha Sipila, leader of the Centre party who built his own house and gas-powered car as well as running several telecoms and bioenergy companies, is due to replace Alex Stubb as prime minister. "The first action is to change the management," he told the Financial Times just before Sunday's vote.

But the biggest upset came with the populist, anti-EU True Finns coming in second place in terms of seats. That is likely to spark some nervousness in EU capitals as, yet again, a Finnish election coincides with discussion of a potential bailout of Greece.

In 2011, the True Finns scored even higher in terms of seats but refused to join a coalition due to their distaste over Greece's second bailout. This time round, a third Greek bailout is being discussed.

Opinion remains divided over how obstructionist the True Finns would be as, if seems highly likely, they make it into government. Timo Soini, the party's leader, admitted before the elections that his main goal was to get into government as he somewhat toned down his criticism of the euro and Greece.

Admired as head of the parliament's foreign affairs committee, he is thought to be targeting the foreign minister's role and both Messrs Sipila and Stubb said before the elections that they could work with him. "We're here to stay because we are needed," Mr Soini said late on Sunday.

Mr Sipila will need a third big party to ensure his coalition has the necessary majority in parliament. Favourites are the National Coalition party of Mr Stubb, who came just behind the True Finns in terms of seats and slightly ahead of them in terms of votes. But Mr Sipila will also talk with the fourth-placed Social Democrats.

"The most natural coalition would be with Stubb and Soini," one senior Centre party official said.

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The current government, initially made up of six of the eight parties in parliament, has been widely condemned for its lack of action, particularly in big reforms where changes to the healthcare and municipal government systems stalled or were abandoned.

"We need to concentrate on a few things, big things. We need to get things done, and implemented. The implementation of reforms has been very poor," Mr Sipila told the FT.

The Centre party leader has said he wants to run the country more like a business, reducing the size of the cabinet to be more like a management board. He also wants any coalition partners to sign up to a series of broad policy pledges in an attempt to create the "ideological glue" that Mr Stubb has said was missing from the current government. On Sunday night, Mr Sipila said: "Finding trust between the future government parties is the most important factor."

Top of Mr Sipila's to do list will be reforms of the labour market and healthcare system. All parties are agreed on the need to continue with the austerity Finland has championed to stop the rise in government debt, which this year is forecast to breach the EU target of 60 per cent of GDP.

But there is considerable business scepticism over the ability of a diverse coalition to take the necessary tough decisions as well as over Mr Sipila himself. At a dinner of 10 senior business executives from banks, manufacturers and retailers last week, not one thought Finland's situation would improve under a new government. "It will take 10 years to get Finland back into shape," Mr Sipila admitted after the vote.

One senior executive wondered about the neophyte politician's ability to deal with a potentially fractious coalition. "Yes, he's a successful businessman but can he be a successful prime minister? It's a different job and with Finland in such dire straits really not an easy one."

Centre party officials point to the presence of Olli Rehn, a former European Commissioner tipped for a top ministerial role, and Matti Vanhanen, the party's last prime minister, among new MPs as a sign of the political expertise Mr Sipila will be able to call upon.

The Centre party won 49 seats in the 200-seat parliament, followed by the True Finns with 38, National Coalition with 37 and the Social Democrats with 34. In terms of votes, National Coalition came second, just ahead of the True Finns, although both lost support compared with the elections in 2011.

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