“These parliamentary elections are only a moment in the long process of transformation of Finland from an enlightened and social-democratic Nordic country to a standard neoliberalised member of the Western alliance.”
Heikki Patomäki is a social scientist, activist, and Professor of World Politics at the University of Helsinki. He has published widely in various fields including philosophy, international relations and peace research.
The result of the Finnish parliamentary elections held on Sunday 2 April is clear: the right-wing conservative parties won, and the center-left base of Sanna Marin’s government lost. The conservative party got 48 seats and the Finns party 46 out of 200. Although the social democrats slightly increased their share of votes (to 19.9%) and seats (to 43), this was likely because some supporters of the Greens and Left Alliance and perhaps also the Centre Party decided tactically to concentrate votes on social democrats in the hope of making them the biggest party. The three other main parties of the government coalition lost a combined 26 seats.
These parliamentary elections are only a moment in the long process of transformation of Finland from an enlightened and social-democratic Nordic country to a standard neoliberalised member of the Western alliance, which smoothly connects nationalism and Cold War mentality vis-à-vis Russia and, increasingly, also China.
The changes resulting in the current situation started in the immediate aftermath of the end of the Cold War, during a major economic crisis in the Nordic countries. The advocates of neoliberal changes typically argued retrospectively against “Finlandisation” and, with hindsight, that Finland should have been more on the Western and winning side of the Cold War. Across Nordic countries, economistic discourses about the requirements of “new times” rose, involving neoliberal framing of new social problems and consequent transformations involving austerity, tax reforms favouring the well-off, privatisation, outsourcing, and applications of new public management.
When Finland and Sweden joined the EU in 1995, they were redefined as European but militarily non-aligned, to replace the earlier idea of a neutral Nordic country, though the two coexisted for some time. Neoliberal globalisation and related changes have weakened the trade unions, altered income and wealth distribution, transformed the media, and thereby restructured power relations.
The Finnish NATO membership has been on the political agenda since the 1990s, but the process of building up momentum for it has taken a long while. The main newspaper of Finland, Helsingin Sanomat, decided to support NATO membership at the turn of the 2000s and the conservative party in 2006, but for many years public opinion remained stubbornly against it. Cracks in the apparently stable punctuated equilibrium began to appear in 2014 when the first phase of the war in Ukraine started. At that point, Finnish nationalism started again to become increasingly Russophobic (like it had been before the development of Nordic neutrality).
A day before the 2023 elections, the director of the Finnish Institute for International Affairs, Mika Aaltola, published a long and meandering tabloid column in which he glorified nationalism and its importance. A phenomenon of the last year has been Aaltola’s rise to the centre stage of Finnish politics. At one point, he even led the polls for becoming the next president of the republic, even though he has rejected the idea of candidacy. In Aaltola’s column “Patriotism has returned”, he draws direct parallels between the histories of Finland and Ukraine and writes “in an otherwise dark time, Finland has achieved something important, NATO membership”.
The elections of 2023 focussed on domestic issues, but this focus was built on a consensus about the world political situation. Russia and especially its current government is the source of all evil and NATO membership and the United States represent the good. Not only the right-wing conservative parties share this view: one of its most enthusiastic proponents has been the social democratic Prime Minister Marin. In the discussions before the elections, the issue of nuclear weapons came up occasionally (apparently no one wants to impose conditions on NATO membership), while some parties would like Finland to leave the ban on landmines (because landmines are needed on the Eastern border, where a new wall is also to be built). Only a few Left Alliance MPs voted against NATO membership and most of them were not re-elected.
The costs of the social security system and economic policy dominated public debates before the elections. From the point of view of economic policy, these elections are reminiscent of the spring 2015 elections, which laid the basis for Juha Sipilä government’s austerity and privatisation programme. The economists of the Ministry of Finance publishes its demand that public finances should be “strengthened” by a total of 9 billion euros; followed by a list of possible cuts. The main media has strongly supported this agenda, to such an effect that according to a survey conducted by Yle, the Finnish broadcasting corporation, public debt worries Finns as much as climate change, even though measured in net debt Finland is one of the wealthiest countries in Europe.
Even in terms of gross debt, the mainstream discussion on economic policy has been rather misleading. As a couple of economists pointed out publicly just before elections: (i) more important than the amount of the debt is what the debt is used for, and (ii) the burden of debt depends on the rate of growth and level of interest rates. However, what they failed to mention is that both interest rates and growth depend to a significant extent on economic policy. The former is determined by the ECB (the EU was hardly mentioned in the election debates). In response to inflation, the ECB has raised interest rates considerably. The interest rate is a very imprecise and inappropriate way to fight inflation. It would be more reasonable to respond to the inflation problem with fiscal policy measures. Anyhow, despite the ECB’s activities, the inflation rate remains higher than the interest rate and thus the real interest rate is for the time being sharply negative, meaning that debt is cheap even under conditions of mild recession (the economic forecast for 2023 is -0.5% of GDP).
Economic policy affects the growth rate of the economy through the multiplier effect. Increasing public spending strengthens growth; reducing it or increasing taxes does the opposite. This effect is much higher during economic downturns than upturns. Since 2007 and the global financial crisis, rounds of austerity have coincided with zero overall per capita growth in Finland. Although there are multiple causes for the lack of growth (also in the EU more generally), it is clear that the prevailing economic policy has been a central factor. This will be the case also during the next four years. When the combined total multiplier effect of spending cuts and tax increases is more than one – at the moment it may be as high as two – it means that each “adjusted” billion reduces GDP relative to its potential size by much more than one billion euros.
Finally, it is worth remarking that the right-wing views on economic policy and nationalist and militarist tendencies are, at least for the time being, closely linked. Former soldiers are now well-represented among the new MPs of the conservative party, including Major General Pekka Toveri, who has recently become known as a commentator on Ukraine and security policy; cyber security expert Jarno Limnéll; and former commander of the defense forces Jarmo Lindberg. The Finns party is best known for its strong anti-immigration stance, at times verging on racism, but they are also strong supporters of austerity and various neoliberal measures. What seems especially clear is that the Finland of the 2020s will be among the conservative forces in the EU opposing all attempts to improve the functioning of the EU by creating a common fiscal policy.
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