Petteri Orpo's government of hate and tolerance
Petteri Orpo's new right wing government has had a chaotic start. The Finns party’s ministerial choices have caused widespread consternation abroad, the Swedish People’s Party (SFP) voted against the confidence of economic affairs minister Vilhelm Junnila and lastly the Finns party replaced Junnila with Wille Rydman, who resigned from Orpo’s National Coalition Party (NCP) and who has denounced publicly the leadership skills of Orpo. As the NCP got almost entirely its electoral manifesto’s goals of balancing public finances and labour market reforms in the government programme, prime minister Orpo has no choice but to accept the current awkward situation.
Orpo’s government intends to make budget cuts totaling over €4 billion, with the largest cuts of €1.4 billion in healthcare, and €1.2 billion in social security. Even influential figures within the NCP, journalists and the officials from the Ministry of Finance have been surprised by the extent of the spending cuts. What makes Orpo’s fiscal adjustment special is the absence of tax increases. The governing parties have clearly not listened to the experts who argued that excessive expenditure cuts in an economically uncertain situation, where the eurozone is already in a technical recession, can lead to a decline in overall demand, economic downturn, a decrease in tax revenues and consequently against electoral promises, a increase of indebtedness.
The program also includes €4 billion investment program financed by privatizing public assets. Investments mitigate the impact of spending cuts on demand but, on the other hand, increase net indebtedness. In order for the austerity measures not to deepen the problems of public finance, it is necessary to hope that the European Central Bank does not tighten monetary policy excessively, that other EU countries maintain sufficiently loose fiscal policies, and that there are enough private investments. And if, for example, cuts to healthcare services are not realized, the program may still not bring the debt under control during this government term.
However, the most radical policy change in Orpo's program concerns social security and labour unions. The government aims to create 100 000 additional jobs mainly through cuts in unemployment benefits, housing allowances, and social assistance, while simultaneously reducing payroll taxes. The underlying idea is that by increasing the gap between wage income and social security benefits, people are encouraged, obligated (and in deteriorating living conditions, even coerced) to work, resulting in increased tax revenues and a balanced economy.
Additionally, the labour unions are weakened by loosening the employment protection regulations, restricting the workers’ right to strike, tightening sanctions for illegal strikes, extending local bargaining to non-unionized employers, and limiting wage increases in labour disputes. The intention is to weaken the labour unions in order to restrain wage increases. While the Finnish industrial and business sectors had some doubts about the Finns party’s stance on climate change and cultural wars, such a radical undermining of organised labour was ultimately more important than ambitious climate targets or reasonable use of social media.
The Finnish opposition has accused the Finns party of betraying the working class. This is partly based on a mistaken notion that workers would be always and everywhere sympathetic towards the unemployed or supportive of the labour union movement. The founder of Finns party, Timo Soini, described his party as a “labour party without socialism” and before the elections the Finns party was the second most popular party among the members of Industrial Union, the biggest labour union in Finland. While it is true that the leader of Finns party and current minister of finance Riikka Purra promised not to cut from the most vulnerable during election debates, the Finns party campaigned on a platform of austerity policies and never promised to improve the position of labour unions. The electoral result demonstrates that there are many workers in Finland who find the cuts in social security for the unemployed, the weakening of the labour union movement, and tax cuts for the employed quite acceptable policy choices.
Orpo's government is based on a curious balance of hatred and tolerance. Despite all disagreements and antipathies, the SFP got the minister of education and secured the position of Swedish language in Finland and the Finns party got some restrictions on immigration policies and almost free hand in cultural wars. MPs of governing parties have already started smear campaigns against journalists and researchers who have criticized Orpo’s government. Moreover, it seems that in order to keep the majority government in place, Orpo has had to give up the constitutionally guaranteed right to veto ministerial choices. For example, yesterday he said that because of the allegations of inappropriate relationships with young women and underage girls, Rydman could never again have been a parliamentary candidate for the NCP, let alone a party minister, but stated that the trust and successful cooperation between governing parties require respecting the ministerial choices of other parties.
In addition that the trust between governing parties is eroding, the challenge of implementing the government programme will be even more difficult if the popularity of the government parties in the polls starts to decline as a result of the chaotic situation, fiscal austerity, and the attack on labour unions. Additionally, the government's overall majority depends on the support of ten SFP MPs, which gives it considarable leeway in forthcoming disputes. An influental figure from the NCP estimated that if even a third of the program can be implemented, it can be considered satisfactory.
The success of balancing the public finances is on shaky grounds, but if Orpo manages to implement its labour market reforms, it could be seen as boosting Nordic model with steroids. Unemployed individuals and low-wage earners who voted for the Finns party will soon experience what a “labour party without socialism” means in practice. Both the government and the opposition appear to be in a state of high turmoil readiness, and one can only imagine how frantic the situation will be after the summer break when the government program is brought to the parliament for approval.