May 27, 2015 / 11:38 AM / 4 years ago

Finland appoints eurosceptic, anti-bailout foreign minister

HELSINKI (Reuters) - Finland’s new government has picked Timo Soini, leader of Eurosceptic party The Finns, as its new minister of foreign and European affairs, reinforcing a hardline stance over euro zone bailouts such as that for Greece.

Timo Soini of the Finns Party campaigned in Vantaa, Finland on April 18, 2015 ahead of the parliamentary elections. REUTERS/Vesa Moilanen/Lehtikuva

The 52-year-old Soini, whose anti-bailout views have spooked financial markets in the midst of the euro zone crisis, earlier this month said it would make sense for troubled Greece to leave the euro bloc.

He appeared to strike a more pragmatic tone on Wednesday.

“Finland is an active, pragmatic and results-oriented member state. We will seek, in a constructively critical and cooperative way, to combine the national and joint EU interest,” Soini told a news conference.

Alexander Stubb, the pro-EU prime minister in the previous coalition, will be the new finance minister. He faces a tough task in implementing a multi-billion euro austerity plan to curb public debt growth in the troubled economy.

The coalition government, including prime minister Juha Sipila’s Centre Party, The Finns Party and Stubb’s centre-right National Coalition Party, struck a deal after weeks of negotiations and is expected to be nominated on Friday.

Soini and his Finns party, formerly known as True Finns, refused to join the previous government but effectively hardened Finland’s stance on bailouts into one of the toughest in the euro bloc.

Soini, who has led his party for 18 years, compromised this time, and the new coalition agreed that it could accept a possible third bailout for Greece from the EU rescue fund within its current capacity and capital structure.

Many expected Soini to become the finance minister, but the former EU lawmaker and chairman of parliament’s foreign policy committee chose to be foreign minister instead.

SPENDING CUTS

The government is seeking to implement cuts and reforms aimed at saving 10 billion euros by 2030 to tackle persistent problems in the economy following the failures of the previous, quarrelsome coalition.

Direct spending cuts will total about 4 billion euros by 2019, including trimming social benefits, education spending and development aid. A big chunk of the long-term impact is due to come from reform of the healthcare system.

“This is an ambitious 10 billion euro program. Some of the measures are painful but they are necessary,” Stubb said.

“Finland has been a strong advocate of responsible economic and financial policy at the EU level, and we need to live as we preach.”

Finland’s economy has contracted for three years in a row and has yet to return to 2008 output levels, while its public debt and budget deficit have risen to levels that this month prompted a warning from the European Commission.

To keep his team unified behind the tough decisions to come, Sipila, a former telecoms executive, aims to bring a corporate-style culture to the cabinet focusing on strategic goals, smaller government and a plan to put his ministers work in an open-office environment for the next month.

The previous left-right coalition initially included six parties with varying views on austerity and taxation. Two parties left and several ministers resigned, and the coalition eventually failed to carry out planned reforms and agreed cuts.

Analysts said things could be harsh for Sipila’s coalition, too.

“I doubt Sipila’s business-world approach to politics will last beyond the summer. By then the 100-day honeymoon will be over,” said Juhana Aunesluoma, a politics researcher at the University of Helsinki.

Additional reporting by Anna Ercanbrack; Editing by Alistair Scrutton and Hugh Lawson

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