Populist party surges in Finn poll, EU aid at risk

Supporters of the True Finns party celebrate landslide victory at the party's reception in Helsinki April 17, 2011.

HELSINKI (Reuters) - Finnish voters threw sand in the gears of European Union plans to bail out Portugal on Sunday by thrusting the anti-euro True Finns party into a crucial role in parliament and possibly into government.

Finland's parliament, unlike others in the euro zone, has the right to vote on EU requests for bailout funds, meaning it could hold up costly plans to shore up Portugal and bring stability to debt markets.

The strong showing for the populist True Finns -- in close third place -- reflects growing public frustration in some EU states with stronger economies, notably Germany, at having to foot the bill to bail out the weaker economies such as Greece, Ireland and Portugal.

The center-right National Coalition narrowly won with 20.4 percent of the final vote but the True Finns made the biggest election gains of any party, garnering 19.0 percent compared to 4.1 percent in 2007, which means they are likely to be involved in talks on forming a government.

The charismatic True Finns leader Timo Soini said he wanted to change the terms of the bailout for Portugal.

"The package that is there. I do not believe it will remain," Soini said on public broadcaster YLE, referring to the rescue package being worked on for Portugal, the third euro zone country to need a financial rescue after Greece and Ireland.

The opposition Social Democratic Party, which supports the EU but is critical of current plans to aid Portugal, won 19.1 percent support.

Prime Minister Mari Kiviniemi's Center Party suffered the biggest setback, dropping to just 15.8 percent of the vote compared to 23.1 percent in 2007. She said it would go into opposition.

PORTUGAL BAILOUT "A BAD DEAL"

Some Finns expressed concern about the surge in support for the populist True Finns. "They have strict opinions about everything," said one young woman voter, who gave her name as Eevi. "Finnish people have always been very open, I wonder why we are now pulling off, closing up again."

The True Finns leader later told Reuters his aim was for Finland to "pay less to Brussels." "It is a bad deal," he said of the Portugal plan.

Soini said the party would at least "get an invitation to talks" on a new government, which is expected to be formed in mid-to-late May.

Analysts anticipate that the talks, in which the pro-EU National Coalition will seek to gain a majority in the 200-seat parliament, will be difficult.

That task will be led by the party's 39-year-old leader Jyrki Katainen, the finance minister of the outgoing coalition who is likely to be appointed the next prime minister.

Analysts have said he could demand that potential allies agree to the bailout, although the narrow vote puts him in a tough negotiating position.

Katainen played down the idea that Finland would now join the euro zone's awkward squad.

"Finland has always been a responsible problem solver, not causing problems. This is about a common European cause," he said. "After the elections, the biggest parties will begin to look for common ground."

(Writing by John Acher and Ritsuko Ando, Editing by Elizabeth Fullerton)