Finland’s new government has to address the concerns of those Finnish voters suffering from the collapse in trade with Russia.

Chairman Juha Sipilä of the Centre Party is surrounded by the media at the press conference for the Finnish parliamentary elections at the parliament building in Helsinki, Sunday April 19, 2015. Photo: AP

On Sunday, April 19, parliamentary elections took place in Finland. The results indicate that Russia’s northern neighbor will have a new government. At the moment, Finland is governed by a coalition of parties headed by the National Coalition Party (NCP), whose leader is current Prime Minister Alexander Stubb.

However, the conservative NCP finished in second place (18.2 percent of the vote and 37 seats in the 200-seat parliament), ceding victory to the Center Party (CP), which received 21.1 percent of the vote and 49 seats. The third force in Finnish politics remains the nationalist-oriented Finns Party (17.6 percent of the vote and 38 seats).

Finland will see the formation of a new government over the coming weeks. Its makeup will be multi-party for sure, but the most likely candidate for incoming Prime Minister is the leader of the centrists, Juha Sipila. The CP’s support lies predominantly with the urban middle class and in rural areas.

Analysts blame primarily socio-economic circumstances for the retreat of the conservatives. True, Finland remains one of the richest countries in the European Union with a gross domestic product (GDP) per capita of more than $50,000 per year. Finland also has a highly developed social system, and an environmental policy second to none. Yet for all that, Finnish society has been sucked into the vortex of the global financial crisis.

Since 2012, annual GDP in this northern nation has been in decline, falling by 0.2 percent in 2014. Only this year, experts say, can Finland expect to see growth — and very weak at that, just half a percentage point. As a result, the labor market is gripped by social tension, and many companies in the past few years have sought to cut staff. A symbolic indicator of the crisis in the Finnish economy is the decision by Nokia – one of Finland’s most iconic brands - to sell its mobile phone arm to U.S. giant Microsoft in 2013.

The Stubb cabinet could not stop the rise in public debt and the country’s budget deficit. The opposition smelled blood: The Center Party’s pre-election platform contained a pledge to cut public spending and carry out structural reforms to stem the tide of growing public debt.

Finland’s NATO pivot in the spotlight

But Finnish and Western European journalists stress that at the heart of the conservatives’ failure is more than just internal reasons. A crucial issue for Finns is problem-free relations with its eastern neighbor, the Russian Federation. But here Stubb failed to read the national mood. Proof of that is the conservatives’ endless promotion of NATO membership.

Stubb stated publicly on more than one occasion that only full membership of the North Atlantic Alliance would ensure Finland’s safety in the new international climate. The same view is held by the leader of the Swedish People’s Party, current Defense Minister Carl Haglund, who is on the record as saying that “Finland must seriously consider joining NATO.”

However, in Helsinki the issue has yet to be discussed at the parliamentary level, primarily because parliament lacks a pro-NATO majority. And Sunday’s election did nothing to produce one. Finland’s potential renunciation of neutrality is opposed by the left-wing parties, including those in the present ruling coalition.

For instance, the leader of the social democrats, Finance Minister Antti Rinne, commented a few days before the election that, “It would be the wrong step to take. I can’t say how fatal it would be, but certainly a mistake. It would not improve Finland’s position.”

A similar view is shared by the leader of the Center Party, Juha Sipila: “As an independent country, Finland should act without fear or pressure and take the right decision in the interests of national security.” The right-wing conservative Finns Party likewise opposes the prospect of Finnish accession to NATO.

NATO membership does not have the backing of Finnish society, either. A recent public opinion poll showed that only 28 percent of Finnish voters support such a move, with 40 percent clearly opposing it.

Cooperation with Russia as a wild card in Finland’s politics

Finland’s proximity to Russia meant that EU sanctions against Moscow hit the country very hard. Although soon after the start of the “sanctions war” between Russia and the EU, Finnish President Sauli Niinisto rushed to say that bilateral relations between Finland and Russia had not suffered any damage over the Ukraine crisis, things are not that clear-cut. It is true, though, that Moscow and Helsinki are still talking on many common platforms, including the Arctic Council and the Council of Baltic Sea States.

But for many Finnish experts, Finland’s support for economic sanctions against Russia, coupled with Moscow’s retaliatory steps, have inflicted major damage upon Russian-Finnish cooperation. A quick look at the figures shows that in January 2015 Finnish exports to Russia were down by 43 percent against the previous year, while imports from Russia fell by 36 percent.

Behind these numbers is the fate of real people, hired hands laid off by factories, farmers in rural regions whose incomes have been slashed by sanctions. Meanwhile, the potential for Russian-Finnish commercial ties is very great indeed. Finland imports mainly oil and petroleum products, natural gas and timber from Russia, with machinery, vehicles, chemical products, paper and foodstuffs heading in the opposite direction.

It can only be assumed that Finland’s new government must and will try to address the concerns of those Finnish voters suffering from the collapse in trade with Russia.

The opinion of the author may not necessarily reflect the position of Russia Direct or its staff.