Finland's SDP appeares closer to securing a governing coalition

Finland's left-leaning Social Democrats (SDP) appeared closer to securing a governing coalition after its traditional rival, the centre-right National Coalition, signalled on Tuesday that a deal on policy plans as possible. After coming top in Sunday's national election, albeit with fewer than 18 per cent of the votes, the SDP needs to find several partners before it can secure a parliamentary majority to govern.

SDP leader Antti Rinne has ruled out cooperation with the nationalist Finns Party, which came second in the vote, leaving the National Coalition of outgoing finance minister Petteri Orpo as a likely partner. During the election campaign, Rinne promised voters he would increase public spending, including a promise to increase all state pensions of less than 1,400 euros ($1,580) a month, prompting Orpo to call his economic policies "irresponsible".

However, Orpo, whose party pushed for spending cuts and austere budgets in the outgoing government, did not rule out supporting the spending increases but said he wanted Finland's economic performance to guide them. "It's possible for the National Coalition to participate in a government coalition if we can agree on a realistic understanding over the state of the national economy," said Orpo, whose party took 17 per cent of the ballot.

However, fiscal policy is likely to be a source of tension in any coalition agreement, with Rinne wanting to raise taxes to fund welfare services and Orpo believing cutting them would create more jobs and boost the economy. Besides securing backing from Orpo, Rinne will still need to team up with at least two other smaller parties to form a stable coalition.

Rinne's other option, the Centre Party, which came fourth with a record low vote share of 13.8 per cent, became a less likely partner after the party's leadership acknowledged voters had clearly not supported them enough for a government role. ($1 = 0.8852 euros)