April 19, 2011 / 4:10 PM / 9 years ago

Factbox: How Finland's next coalition govt will be formed

HELSINKI (Reuters) - The winners of Finland’s parliamentary election on Sunday will try to form a new coalition government in the coming weeks.

HOW IT WORKS, KEY DATES

- April 20 - Results become official, around 1500 GMT.

- April 27 - Party representatives are due to meet and formally appoint Jyrki Katainen, leader of the right-leaning National Coalition party, as the “scout” who leads discussions to form a government. The National Coalition won the most votes.

- April 28 - The present cabinet resigns but remains as a caretaker government until the next administration is in place.

- Early May - Katainen is expected to announce which parties he will negotiate with. He has already said the result suggested the coalition would include the three biggest parties — the National Coalition, Social Democrats and True Finns.

- May 9 - Talks to form a new cabinet and agree to a government program are due to start. Those negotiations usually last about a week, but they are expected to take longer this time because of disagreements over an EU bailout package for Portugal. Katainen has said he is prepared for long talks.

- May 16 - European finance ministers meet to discuss Portugal’s bailout package. Katainen, as incumbent finance minister, is likely to attend. Finnish politicians may still be in talks to form the government during that meeting.

- Katainen is due to get a mandate from the new parliament’s grand committee. The committee might require Katainen to ask for changes in the Portugal package at the euro group meeting.

After the meeting, either the incumbent or the new government will take the euro group decision for the new parliament. If it votes against using the stability mechanism, it blocks the entire bailout plan.

- May 17 - The parliament is due to vote on a prime minister, according to preliminary plans.

- May 20 or 24 - The president due to introduce the new government and its program. After a majority of the parliament backs the program, Finland would have a new government coalition. But party sources say the final ceremony may not be until June if talks are prolonged.

PARTIES HAVE CONFLICTING VIEWS

- National Coalition Party (right leaning)

Led by Jyrki Katainen, wants Finland to be active in the European Union and does not want to block an EU bailout for Portugal. The party supports cutting corporate tax to 22 percent to help create jobs and boost economic activity. It is also the only party calling for lower income taxes. But, like the other parties, it is calling for a hike in taxes on capital income.

The party has said it plans to keep the retirement age at 63 over the next four years, but will not rule out a rise later. It supports cutting public spending by halving the number of Finnish municipalities.

- Social Democratic Party (leftist)

A EU supporter, but has objected to the European competitiveness pact and is calling for investors and banks to shoulder more responsibility in the bailout of troubled countries. It has rejected cutting pensions or raising the retirement age. Its close ties to labor unions helped it block a government plan in 2009 to raise the retirement age to 65.

Party leader Jutta Urpilainen is calling for a policy mix of more spending and more taxes, and is pushing for more involvement in shaping EU policy.

- True Finns (populist)

Opposes bailing out euro zone countries and demands changes in the Portugal package. It says it wants to defend Finland’s “national identity.” Leader Timo Soini has said the party wants to balance public finances by lowering EU member dues and development aid. The True Finns have not ruled out raising the pension age.

POSSIBLE SOLUTIONS

- Analysts expect Katainen to compromise to bring the anti-EU True Finns into a new coalition government without blocking aid to indebted southern European countries, though the government may seek changes to the Portugal aid package.

- Analysts also expect the True Finns to tone down their anti-euro rhetoric and opposition to the bailout plans once they join government.

- The Social Democratic Party is considered easier to get on board because it has not threatened to oppose Portugal aid altogether but wants indebted countries, private investors and banks to bear more responsibility for reckless lending.

- The National Coalition may help the True Finns save face by installing some of its leaders in key government positions.

- Analysts also say Katainen will need to compromise on various topics unrelated to the Portugal bailout package in exchange for getting the True Finns on board.

- But analysts also say there is a risk that Soini agrees but other members of the party don’t follow through letting the vote pass. In that case, some say, the coalition may fall.

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