May 9, 2014 / 8:56 AM / 4 years ago

Finland's social democrats oust finance minister Urpilainen

SEINAJOKI, Finland, May 9 (Reuters) - Finnish social democrats on Friday replaced its leader and finance minister Jutta Urpilainen with union boss Antti Rinne in a move that could complicate the government’s efforts to curb debt as the country battles economic downturn.

Rinne, who has criticised the government’s austerity measures, received 257 votes in the party congress election against 243 votes for Urpilainen.

The result means Urpilainen will also step down from the role of finance minister. Rinne has said he could take the post if asked by the party council.

Rinne, 51, would be unable to make major policy changes in the five-party government whose term will end in less than a year, but analysts have said the ministerial changes could complicate the coalition’s efforts to implement its earlier reform plans.

The government has agreed to cut public spending and implement tax hikes worth in total around 7 billion euros ($9.7 billion), and outlined long-term plans to reform health care and social welfare.

The biggest of the ruling parties, the conservative National Coalition, is due to change the prime minister next month, and Rinne the minister changes provide a chance to revise government’s plans.

He wants the government to create new jobs quickly by stimulating the economy rather than curbing debt, and also to invest in new industries to boost exports in the future.

“The government can accelerate on the home stretch ... To me, the most important measures will be the ones that boost growth and employment,” he said before the vote.

Since Urpilainen took the party helm in 2008, support for the social democrats has fallen from 21 to 15.5 percent, weakening its chances to retain posts in the cabinet after the general election next year.

Rinne has also said he favours changing the European Central Bank’s mandate to allow it to directly buy government bonds to moderate debt yields. He would also add employment and growth as a new ECB monetary policy target.

In addition, he wants to cut interests and lengthen maturities on Greece’s bailout loans to help the troubled economy grow. ($1 = 0.7214 Euros) (Reporting By Jussi Rosendahl Editing by Jeremy Gaunt)

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