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Finland's center-left coalition concludes talks to form new government

HELSINKI (Reuters) - Five center-left parties concluded talks on Sunday to form a new government in Finland, Social Democrat leader Antti Rinne, set to become the first leftist prime minister for 20 years, said on Twitter.

FILE PHOTO: Social Democratic Party leader Antti Rinne listens during an interview in Helsinki, Finland April 9, 2019. REUTERS/Attila Cser/File Photo

“The government program is ready and ministerial posts have been allocated,” Rinne wrote.

While he said he would not release details until Monday, a leaked draft of a coalition agreement included 730 million euros ($815 million) in proposed tax increases to fulfill a campaign promise to maintain spending on public services.

In an interview with Finland’s public broadcaster Yle, Rinne said his new government would consist of 19 ministers. He said he would not unveil the cabinet lineup until Monday.

Rinne’s Social Democrats placed first in the April 14 general election by a tight margin with just 17.7% of the vote, forcing them to partner with four smaller parties to form a majority government.

A nearly-final draft of the coalition agreement was leaked to Finnish tabloid Iltalehti which published the entire 135-page document on Sunday. It showed plans of tax hikes worth 730 million euros to fund an increase in permanent public spending by 1.23 billion euros a year by 2023.

In his electoral campaign, Rinne had promised tax hikes to preserve Finland’s vast welfare state.

Rinne’s election promises included boosting state pensions, a change that will cost 183 million euros, according to the draft text. In addition to the permanent spending hikes, the coalition plans one-off infrastructure investments, notably to Finland’s railway network.

The planned tax hikes in the draft text include collecting additional 250 million euros in fossil fuel taxes over the government’s four-year term. Income taxes will not be raised.

Finland will renew its aging Hornet fighter jet fleet in its entirety and the new fleet’s supplier will be picked in 2021, the draft text said.

The five-party coalition also plans to change the law on rape to remove a requirement that prosecutors prove an attack was violent.

The nationalist and euroskeptic Finns Party placed a close second in the general election with 17.5% of the vote, but Rinne excluded them from the coalition talks, opting to partner up with outgoing Prime Minister Juha Sipila’s Centre Party as his main coalition ally in addition to the Greens, the Left Alliance and the Swedish People’s Party.

Reporting by Anne Kauranen; editing by David Evans and Peter Graff