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Finland

Finland election results — and what they mean for Europe

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sipilaPhoto credit to Jari Laukkanen/Suomenmaa.

As expected, the liberal Suomen Keskusta (Centre Party) won the largest share of the vote in Sunday’s parliamentary elections in Finland after a campaign dominated by Finland’s flagging economic recovery.finland flag

That means Juha Sipilä, a former telecommunications executive who entered Finnish politics just four years ago, will become the country’s next prime minister, and he will prioritize an agenda of economic reform that includes personal and business tax cuts, further budget-trimming and steps designed to increase the competitiveness of Finnish industry.

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The Centre Party led Finland’s government most recently between 2003 and 2010 under former prime minister Matti Vanhanen, who also emphasized tax cuts and promoted innovation — Vanhanen’s government was the first in the world to introduce a legal right to broadband internet. Olli Rehn (pictured above), who from 2004 to 2014 became the European Commission’s chief official for economic and monetary policy, won a constituency in Helsinki to return to the Finnish parliament, where he’s expected to play a leading role in the new government — quite possibly as Finland’s next finance minister.

But the Centre Party’s narrow victory wasn’t the most convincing — it only defeated the governing center-right Kansallinen Kokoomus (National Coalition Party) by just over 3%. Another two parties, the far-right Perussuomalaiset (PS, Finns Party) and the center-left Suomen Sosialidemokraattinen Puolue (SDP, Social Democratic Party) weren’t far behind.

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Each of Finland’s four major parties won between 17% and 21% of the vote, hardly a ringing endorsement for anything other than the traditional moderation and consensus that has marked past Finnish governments. For now, the Centre Party’s victory will end talk of Finland’s potential accession to NATO, a position that outgoing prime minister Alexander Stubb favored and that Sipilä (along with most Finns) opposes.

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RELATED: Who is Juha Sipilä?
The man who wants to become CEO of Finland, Inc.

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But it also means Sipilä’s government will almost certainly depend on the Finns Party in some form. Throughout the Finnish election campaign, that has caused trepidation throughout Europe for two reasons. First, the eurosceptic far right will now hold the balance of power in Finland, a scenario that’s becoming increasingly common in the Nordics as anti-EU nationalists continue to gain support throughout all of Europe. Second, because the Finns Party are opposed to future Greek bailouts, Finland’s new government could complicate efforts to reach a new deal on Greece’s financing that will allow it to remain in the eurozone.

Perhaps the biggest surprise in Sunday’s vote was the strong showing of the Vihreä liitto (Green League), which gained five seats (for a total of 15) in the 200-member Eduskunta, the unicameral Finnish parliament.

Sipilä hopes to avoid the same unwieldy coalition that hampered the National Coalition-led government since 2011, first under Jyrki Katainen and under Stubb for the past 10 months after Katainen joined the European Commission (where he currently serves as vice president for jobs, growth, investment and competitiveness). Katainen was disappointed in his plan to enact deeper reforms, in part because he was forced to balance an unwieldy six-party coalition that included not only the center-right National Coalition, but the Social Democrats, the Green League and the Left Alliance (Vasemmistoliitto).

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Sipilä starts out with less than half the seats he needs for a coalition. If Sipilä includes the conservative Kristillisdemokraatit (Christian Democrats) and the Svenska folkpartiet i Finland (Swedish People’s Party), a small party devoted to the interests of Finland’s Swedish-speaking population, he’ll have just 63 seats.

Continue reading Finland election results — and what they mean for Europe →

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The 13 key EU players in the proposed Juncker Commission

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On Wednesday, the incoming president of the European Commission, Jean-Claude Juncker (pictured above), released full details on the proposed commissioners within his Commission, which will serve as the chief executive and administrative body of the European Union between 2014 and 2019.European_Union

The most important feature of the proposed Juncker Commission is that he’s introduced the greatest amount of hierarchy in an institution that used to be flat. It’s not a secret that some portfolios have always been more desirable than others, especially as the Commission has expanded to include all 28 member-states. But Juncker has introduced a first vice president and five vice presidents, who will also serve alongside Italy’s foreign minister Federica Mogherini, who was appointed two weeks ago to serve as Commission vice president and high representative for foreign affairs and security policy.

The delegation of so much power to five ‘super-commissioners’ with roving, supervisory briefs indicates that Juncker intends to be a much less hands-on Commission president that his predecessor, José Manuel Barroso. But it also reflects a Commission that, including Luxembourg’s Juncker, contains five former prime ministers (Finland, Slovenia, Latvia and Estonia).  It also contains four incumbents (Germany, Sweden, Bulgaria and Austria) who have served throughout the full second term of the Barroso Commission. That makes the Juncker Commission possibly the most distinguished in EU history.

Each commissioner must be approved by the European parliament and, while individual nominees have had troubles in the past, the parliament typically approves the vast majority of a Commission president’s appointments, all of whom were nominated by their respective national governments.

With nine women, it’s not as unbalanced as feared even a week or two ago, and with 14 members of the center-right European People’s Party (EPP), eight members of the center-left Party of European Socialists (PES) and five members of the Alliance of Liberals and Democrats for Europe (ALDE), it generally reflects the results of the May 25 European parliamentary elections, though some social democrats and socialists are grumbling that the left doesn’t have enough representation.

So what can we expect from this illustrious college of commissioners?

Here’s a look at the 13 most important players in the proposed Commission (aside from Juncker and Mogherini, of course). Continue reading The 13 key EU players in the proposed Juncker Commission →

European Union, Scotland, United Kingdom

How an independent Scotland could enter the EU

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Scottish referendum debate urging yes vote

One of the most vexing questions of the current campaign for Scottish independence is how easily it might be for an independent Scotland to join the European Union.scotlandUnited Kingdom Flag IconEuropean_Union

As a constituent part of the United Kingdom, Scotland has been part of the European Union and its predecessor, the European Economic Community, since 1972, the date of the first EEC enlargement, when Ireland and Denmark also joined.

As such, Scotland has been exempt from several conditions that would be required of an independent country seeking EU membership today. Scotland hasn’t had to join the eurozone or become a member of the Schengen zone, which allows all EU citizens to travel freely throughout 26 of the 28 member states (Ireland and the United Kingdom are the exceptions). It has also received some of the benefit of those rebates that Margaret Thatcher clawed back from Europe in the 1980s.

An independent Scotland might be forced to accept, at least in principle, joining either or both of the the eurozone the Schengen zone as a condition of re-accession to the European Union. The former could complicate the assurances that Scottish first minister Alex Salmond has tried to give that Scotland could continue using the British pound and, like Ireland today, share open borders with what remains of the United Kingdom. Continue reading How an independent Scotland could enter the EU →

Finland

Katainen hopes to trade Finland’s premiership for EU presidency

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jyrki

Just three years after taking power as Finland’s prime minister, Jykri Katainen is set to step down both as leader of Finland’s center-right Kansallinen Kokoomus (National Coalition Party) and as prime minister later this month, following the Saturday leadership election of Alexander Stubb as the party’s new leader. finland flag

Though Katainen (pictured above) is just 42 years old, he’s been at the helm of the National Coalition Party for a decade. Katainen stunned Finland in April when he announced he was resigning, with an eye toward pursuing a top job in the European Union. At the time, everyone assumed he was angling to become Finland’s next commissioner within the European Union, replacing Olli Rehn, the influential vice president of the Commission and, since 2010, the commissioner for economic and monetary affairs.

Rehn previously served from 2004 to 2010 as commissioner for enlargement, and he was recently elected to the European Parliament as a member of Finland’s liberal Suomen Keskusta (Centre Party).

But as the wrangling continues among Europe’s leaders over whether former Luxembourgish prime minister Jean-Claude Juncker should become the next president of the Commission, Katainen has tried to position himself as an attractive alternative.

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RELATED: The mother-of-all-battles over European integration has begun

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Juncker seems likely to command an absolute majority of the European Parliament, but there’s no sure bet that he’ll win the qualified majority within the European Council that he’ll need to win the Commission presidency. Juncker, led the pan-European campaign of the European People’s Party (EPP) in the May parliamentary elections, which won the largest number of seats in the 751-member legislature.

Enter Katainen, who’s guided a tenuous six-party (now five-party) coalition in Finland for the past three years, pushing through tough budget cuts, like so many other European governments over the last half-decade, in the face of economic recession. Before his National Coalition Party won the April 2011 national elections, Katainen previously served as finance minister and deputy prime minister, so he would bring to the job — or to any other top EU position — the experiences from governing through the eurozone sovereign debt crisis.  Continue reading Katainen hopes to trade Finland’s premiership for EU presidency →

14 in 14, European Union

14 in 2014: European Union parliamentary elections

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ukipin14

9. European Union parliamentary elections, May 22-25.European_Union

If for no other reason, the upcoming elections for the European Parliament will be the most important since direct EP elections began in 1979 because under the new Lisbon Treaty, it will be the European Parliament that decides who will become the next chair of the European Commission, the chief executive organ of the European Union (though German chancellor Angela Merkel has argued that the treaty’s language indicates that the Commission appointment need only ‘take into account’ the EP elections).  In any event, it still means that early in 2014, each of the major cross-national party groupings within the European Parliament will designate their nominees to succeed José Manuel Barroso, the former center-right Portuguese prime minister who will step down in November 2014 after a decade heading the Commission.

The eight European Parliament will have 751 members, over 56% of whom will come from just six member-states: Germany (96), France (74), the United Kingdom (73), Italy (73), Spain (54) and Poland (51).  Four states, Estonia, Malta, Luxembourg and Cyprus, will elect the minimum number of representatives (six).

Between 1979 and 1999, the Party of European Socialists (PES) and its predecessor was the largest group in the European Parliament.  Its members include the major center-left socialist/social democratic parties of Austria, the Czech Republic, Denmark, France, Germany, Portugal, Spain and Sweden, and the labour parties of Ireland, Malta, The Netherlands and the United Kingdom.

Since 1999, however, the European People’s Party (EPP), a group of center-right and Christian democratic parties, have held the largest number of seats.  In the most recent 2009 elections, the EPP won 265 seats to just 183 for the PES.  The EPP’s members include the major Christian democratic parties in Benelux, the Austrian People’s Party, the French UMP, Germany’s Christian Democratic Union Greece’s New Democracy, Hungary’s Fidesz, Ireland’s centrist Fine Gael, Italy’s Forza Italia, Portugal’s Social Democratic Party, Poland’s Civic Platform, Spain’s People’s Party and Sweden’s Moderate Party.

The third-largest group, the Alliance of Liberals and Democrats for Europe Party (ALDE), contains includes most of Europe’s liberal parties, notably Belgium’s Open VLD, the Danish Venestre, Luxembourg’s newly elected Liberals, the Dutch VVD, the British Liberal Democrats, and Ireland’s Fianna Fáil.

Other groups include:

  • the European Green Party (which includes essentially all of Europe’s green and ecological parties),
  • the Party of the European Left (whose members include the German Die Linke and Greece’s SYRIZA),
  • the slightly eurosceptic Alliance of European Conservatives and Reformists (whose members include the Czech Civic Democrats, the UK Conservatives and Poland’s Law and Justice Party),
  • the Movement for a Europe of Liberties and Democracy, formed in 2009 as another slightly euroskeptic group (whose members includes Italy’s Northern League, the Danish People’s Party and the Finns Party), and
  • the European Alliance for Freedom, formed in 2010 as a staunchly euroskeptic, far-right group (whose members include the French National Front, the Dutch Party of Freedom, the Flemish Vlaams Belang and Austria’s Freedom Party).

Although the EPP won’t determine its candidate for Commission president until a convention on March 6-7 and ALDE won’t determine its candidate until February 1, the PES has already nominated Martin Schulz, a member of Germany’s Social Democratic Party and president of the European Parliament since 2012. Polish prime minister Donald Tusk, Luxembourg’s Viviane Reding, the Commission’s vice president and current commissioner for justice, former Luxembourgish prime minister and Eurogroup chair Jean-Claude Juncker, former Latvian prime minister Valdis Dombrovskis, Lithuanian president Dalia Grybauskaitė, Swedish prime minister Frederik Reinfeldt and IMF managing director Christine Lagarde of France have all been touted as possible EPP candidates.  ALDE will choose between former Belgian prime minister Guy Verhofstadt and Finland’s Olli Rehn, currently commissioner for economic and monetary affairs.

Herman Van Rompuy, former Belgian prime minister and the first president of the European Council, the council of European heads of state/government, will also step down at the end of 2014 after two 2.5-year terms in that position.   The first EU high representative for foreign affairs and security policy, Catherine Ashton of the United Kingdom, is also likely to step down.

Given the tumult of the eurozone sovereign debt crisis, almost everyone expects that European voters may use the elections as an opportunity to register dissatisfaction with the direction of European governance.  In particular, that could bode well for the stridently leftist MEP candidates — most notably in Greece, where SYRIZA (the Coalition of the Radical Left — Συνασπισμός Ριζοσπαστικής Αριστεράς) of Alexis Tsipras leads EP polls.  It could also bode well for euroskeptic candidates — most notably in the United Kingdom, where Nigel Farage (pictured above) and his anti-EU United Kingdom Independence Party (UKIP) is competing for first place with the Conservative Party and the Labour Party in EP polls, and in France, where Marine Le Pen’s nationalist Front National (FN, National Front) leads EP polls.

Photo credit to Lucas Schifes.

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Regling denies north-south European divide, claims EFSM a ‘lot of solidarity’

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olli

If you were at Brookings Thursday afternoon, you could have taken away the following points:European_Union

  • Olli Rehn (pictured above), European commissioner for economic and monetary affairs and vice president of the European Commission, thinks the eurozone will return to growth by the end of 2013.
  • Klaus Regling, chief executive officer of the European Financial Stability Facility thinks there is no north-south divide in the eurozone.
  • The three-step plan presented by Jeroen Dijsselbloem, president of the Eurogroup of eurozone finance ministers, for future growth comes down to: balanced budgets, banking union and structural reform.  And, by the way, he thinks the main political problem in the eurozone is that European Union leaders have been so busy (for the past four years) dealing with the crisis that they haven’t had time to explain adequately their plans to the public.

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Consider this quote from Dijsselbloem (pictured above), whereby he says he and his colleagues have been so busy that they haven’t done a job of explaining themselves to the public:

‘[We’ve been so busy] solving the problems and dealing with the crisis, that we’ve not really involved a lot of people, the public, at large, as to what we’re doing, why we’re doing this, why it’s so crucial to work together along the lines of the strategy, why it’s so crucial to push forward structural reforms,” Dijsselbloem said.  ‘People are just experiencing the structural reforms in terms of, ‘I’m losing social rights,’ but we have to explain to them in order for young people to be able to participate also in labor markets, we have to rebalance maybe some countries’ securities and flexibilities in order to create new jobs.’

That’s a fairly audacious understatement of the democratic deficit problem in the European Union these days, and especially among the eurozone member states, who have had treaty upon treaty, condition upon condition dictated to them by Brussels and Berlin.

It also took two questions from the audience about deposit insurance for Dijsselbloem to confirm that their intention is for banking union reform to incorporate a eurozone-wide deposit insurance — in the fullness of time, of course.

klaus
Regling (pictured above), one of five northern Europeans sitting on the panel today, went so far as to rebuke Jean Pisani-Ferry, a French economist and director of Bruegel, a Brussels-based think tank, for suggesting that the political risks in the European Union are rising.

The director general of [the European commissioner of economic and monetary affairs] is Italian, I have two deputies, one is French and one is Spanish, so in the end we’re all good Europeans,’ Regling said, after calling Pisani-Ferry’s question cheap.  ‘We are also not saying that Southern Europe has no problems — you implied that, I think that’s just wrong. We are fully aware there’s a lot of solidarity coming from European partners to these countries.  My institutions alone have dispersed in two years alone €185 billion, in two years alone… That’s a lot of solidarity.  These countries go through very painful adjustments, nobody here is denying that, although we’re all northern Europeans.  But I don’t like this north-south [dichotomy].  I’ve said this before, Latvia was the first country to take [tough structural adjustments] and that’s pretty northern European, so I think we should all be a bit more rational here.’

Reasonable economists can disagree about the policy mechanisms available to Greece or Italy or Portugal or Spain or Cyprus to pull their economies out of depression and how to repair the eurozone’s growing pains.  I’m not going to argue that Italy is in no more dire need of labor market reform than, say Sweden or The Netherlands — of course, Italy needs to modernize its economy if it wants to goose its long-term GDP growth potential.  Greeks have had to learn that income tax isn’t an optional exercise.  And Germany needs to figure out a viable trade model where the eurozone doesn’t exist, as it seemed in its first decade, as a means of enabling the European periphery to buy all of Germany’s exports.

But to refuse to see that there’s a north-south divide in Europe, that Mediterranean Europe is not at the center of today’s eurozone crisis, is abjectly short-sighted.  Regling has to realize that even the north-south divide in Germany is stronger than the east-west divide, despite the separation of west from east for nearly three decades!

It’s Italy that’s currently undergoing a crisis of government today, not France.  It’s Golden Dawn in Greece winning their highest percentage of votes in the history of post-dictatorship Greece, it’s not a neo-Nazi resurgence in Germany.  It’s Cypriot depositors who spent a week wondering if their five-figure savings would be taxed by 6.75%, not the Irish or the Latvians.  That’s not to deny that Latvia and Estonia and Ireland have made incredibly tough decisions in the past four years, but none of those economies are even as big as Greece, let alone Spain or Italy.

If eurocrats like Regling have such a hard time at Brookings, who are largely sympathetic to the goal of (if not always the precise strategies for) saving the eurozone, good luck dealing with Alexis Tsipras’s radical left Greek government or the next Silvio Berlusconi government in Italy or Artur Mas’s declaration of Catalan independence — all of which could happen by the end of 2014.

Photo credit to Kevin Lees — Brookings Institution, Washington DC, April 2013.