News Analysis: Finland's center-right gov't fails to fulfil ambition after 500 days in office

Reaching the milestone of 500 days in office this week, the three-party Finnish government led by Center Party Chairman Juha Sipila has either slowed down or completely canceled many of its original reform programs.

The ruling coalition -- the Center Party, the Conservative Party and the populist Finns Party -- has not been able to rely on its comfortable parliamentary majority. The latest edition of business weekly Talouselama quoted Sipila as saying he was surprised at the strength of the resistance against his government's reform plans.

In late summer 2015, Finland saw the largest mass demonstrations since 1956 opposing governmental plans to cut holidays and other salary related costs and to reduce the power of collective wage agreements. Sipila had hoped his plans could improve the competitive edge of Finnish export industries by five percent.

The government had threatened to use its parliamentary majority to enact the reforms, but when this was met with fierce opposition the option was dropped. A modest package to reduce the labor cost was accepted by labor unions this year, but the initial attempt to give the employers more weight in negotiation through bringing bargaining down to the enterprise level did not make much progress.

Talking to Xinhua on Thursday, researcher Petri Koikkalainen at the University of Lapland noted that the tradition of seeking consensus among employers, employees, and the government enjoys much wider support in Finnish society than what the fairly fresh political leaders could envisage.

Based on the results of the parliamentary election in May 2015, the current coalition was not the only alternative. The Social Democratic Party, the fourth biggest party in parliament, remained optional until the final phase of the government formation talks.

Koikkalainen said that probably a combination with the social democrats could have been easier in terms of achieving positive results. But Sipila chose the Finns Party, which enjoyed its landmark victory in parliamentary elections, leaving the social democrats in the opposition.

Analysts argued that the British conservative leader Margaret Thatcher insisted on carrying out comparable reforms in the 1980s, but the Finnish reform effort largely gave in. Koikkalainen said Finnish leaders probably concluded that the damage that could be caused would not be worth the results attained.

So far, the 500-day-old Finnish coalition has backtracked on many policy announcements whenever there is tense opposition. One of the high profile retreats was the cancellation of a plan to reduce housing assistance to seniors.

While the ruling parties have had to create "phenomena of success" in order to satisfy the respective party floors, the government has often failed to proceed with ideas that met with opposition within the coalition.

Unto Hamalainen, a political analyst for the leading newspaper Helsingin Sanomat, wrote last weekend that "test marketing" of products still in the development stage may work well in business life, but it is dangerous in politics. "While ministers do not argue against each other in public, there are internal tensions that undermine the joint determination to implement government policies," Hamalainen noted.

Late in 2015, the government managed to launch the national health and social service reform, and this rare success was achieved only after conquering an internal crisis. In the deal after all-night talks, centrists won their long desired regional administrative reform while conservatives got in plans to involve private producers in health care and allow the patients to choose their service provider.

Currently, the Center Party and the Conservative Party have largely maintained their support in opinion polls, but the backing of the Finns Party has decreased to pre-2011 levels. This problem has, in turn, reduced even more the willingness of the Finns Party to agree on legislation that would antagonize organized labor.

Sipila has maintained, however, that the 2015 strategic governmental program and its estimate of the economic situation still hold. The main target of the government is to create 110,000 new jobs before the 2019 elections and increase the employment rate to 72 percent. Endit