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Roundup: Finland's upcoming government to cut public spending by 4.4 bln USD

Xinhua, May 28, 2015 Adjust font size:

Finland's newly formed three-party ruling coalition unveiled the ministerial allocations of the upcoming government on Wednesday, and announced a cutback in public spending by 4 billion euros (4.36 billion U.S. dollars) during next four years.

The cabinet will be led by Juha Sipila, chairman of the Center Party; the populist Finns Party leader Timo Soini will handle the Foreign Minister portfolio; the conservative party leader Alexander Stubb will be the Minister of Finance.

The rise of Soini to the position of Foreign Minister was surprising for many. Soini was the Chairman of the Foreign Affairs Committee in the previous parliament and was experienced in the field. But he is known for his sharp criticism of the European Union. Sipila said the choices were made on basis of recognizing the "passions" of the candidates.

The upcoming government will have 14 ministerial posts, 3 less than the current one. Administration efficiency was given as the main reason for the downsizing.

The announcement came after a three-week-long government formation talk among the ruling parties. The new government is to be sworn in later this week.

The negotiators also agreed on a government program, which reiterates the views that Finland would have the option of applying for membership in NATO. The current and previous governments have been ruling out a NATO membership.

A reduction of 600 million euros in the education budget is envisaged, according to the program unveiled on Wednesday. The new government will also slash development co-operation by 300 million euros and unemployment benefits by 200 million euros.

While it is feared that the number of Finns taking a Master's level academic degree will decline, conservative party leader Stubb said the cutbacks in education spending would be offset by the qualitative development such as the "best classroom" in the world.

The new government is committed to maintaining universal public health care. The proposed system would be based on single source financing and is expected to be simplified and more cost effective.

Current Finnish public basic health care is offering three parallel systems, including subsidized private care, employment based health care with partial public financing and actual public health care.

Erkka Railo, director of the Center for Parliamentary Research at the Turku University, described the program as "right wing economic policies" where cutbacks in the public sector are expected to help attaining growth.

The planned measures by the upcoming government were received with variable dismay in the political left and trade unions, whereas the employers welcomed the plans.

Lauri Lyly, chairman of the largest labour union organization SAK, said the impairment of unemployment benefits were unreasonable. Lyly said the government program was in fact an obstacle to reaching the societal agreement envisaged by the ruling parties.

Jyri Hakamies, director of the Confederation of Industries, said the measures were painful but unavoidable. He said the spending cutback and tax concessions were "attractive." Endite