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April 15, 2019

Finland's far right changes the game

The Finnish elections on Sunday produced an even tighter result than the polls predicted. The Social Democrats (SDP) came first but with only 17.7%, directly followed by the far-right Finns party (PS) with 17.5%, and the conservative National Union (KOK) with 17%.  In terms of seats this translates into 40, 39 and 38 seats respectively. The biggest loser is the centre party (KESK) of outgoing PM Juha Sipilä with 13.8% of the votes or 31 seats, losing 18 seats compared to the previous elections.

This is the first election in a century where no party won more than 20% of the vote. And the difference between the the Finns and the SDP is just over 6,800 votes.

Source: Helsingin Sanomat 

The success of the Finns' party will change the game to form a government, and will have repercussions at EU level. The party has already announced a European election alliance with Germany's AfD, Italy's Lega and the Danish People's Party. At home, its role is less clear. Before the elections, most parties ruled out any coalition with the Finns' party. Its leader Jussi Halla-aho signalled that they are open to cooperation but not at any cost.

What happens next? Despite winning the elections Antti Rinne, leader of the SDP, will not have a strong mandate. A minority government is possible, though there is no tradition for it in Finland where compromises are sought to form coalition governments including several parties. Forming a coalition will be more tricky than ever, with a winning party without a clear lead and a charged agenda of social welfare reform and tax redistribution on the table. Rinne said yesterday he will send all other parties a list of questions, including about values, to decide which parties to invite to coalition talks.

Natural candidates for a coalition would be the Greens (VIHR) and the Left Alliance (VAS), both of which increased their seats in this election. Together the three parties would hold 76 of the 200 seats in parliament, according to the Helsinki Times. To have a clear majority Rinne would have to ask either the National Coalition or the Centre party to join in. But the National Coalition may refuse to enter a coalition with the Left Alliance. With the Centre, they could also invite the Christian Union to join.

The newspapers put their bets on a government formed by the Social Democrats, National Coalition, Green League and Swedish people’s party (RKP), with 106 seats. The RKP represents the Swedish minority living in Finland, and is an ideal candidate for coalition governments. 

Alternatively, Rinne might not get a coalition going and could chose to stay in opposition. The mandate would then go to the Finns' party. Their rise to second place was on the back of a stance against immigrants and climate-action. Theoretically a coalition with the National Coalition and Centre party would have 108 of the 200 seats in parliament, but the leaders of both parties have so far rejected a coalition with the far-right party. 

Could the parties' refusal to cooperate with the Finns' party soften? Could they support Rinne in his attempt to form a government? Helsingin Sanomat points out that forming a government in Finland is not so much about the parties but about the government programme. A programme could be supported by the Finns' party if it includes tougher immigration policies, which would be a big achievement. Whatever the coalition outcome will be, the government's overall policy orientation will clearly change. 

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April 15, 2019

Brexit party drawing almost even with the Tories

It is very tempting not to write about Brexit, as the news flow and commentary is grinding to a halt and other subjects are intruding into the public debate in the UK. But we picked up a few pieces of information that may have some bearing on the future course of events.

We have noted before that classic opinion polls at a time like this are next to useless. But we found an interesting constituency-level poll, by Electoral Calculus, showing for the first time that Labour would get enough constituency MPs to form a minority government with the support of the SNP. This is a shift from previous such exercises, which predicted a continuation of the status quo with the Tories still in command.

This latest poll, too, is subject to our observation of massively intruding volatility. It says that some of the Tory’s most prominent MPs would be at risk, including Amber Rudd and Iain Duncan-Smith. And we agree with the bottom-line analysis of John Curtice, the pollster, who said the abrupt fall in support for Tories is due entirely to their failure to have delivered Brexit on time.

The Tories are facing two electoral tests in May - local elections on May 2 and European elections on May 23. Early polls are show Nigel Farage's new Brexit party shooting up, taking votes away from the Tories. If European elections were held, we would expect the Brexit party to come ahead of the Tories. Labour is rock-solid in the polls, but Labour unity is at risk as the pro-referendum supporters want Jeremy Corbyn to put the second referendum on the party's manifesto.

The Tory/Labour talks on a compromise have stalled, but are set to continue next week with three working groups: on security, on environmental protection, and on workers' rights. A separate meeting is scheduled between Philip Hammond and John McDonnell, the chancellor and shadow chancellor. The big outstanding issue is the customs union. Theresa May has not yet moved on this one. We noted David Liddington, the effective deputy prime minister, saying that the minimum outcome of the talks would be an agreed and binding decision-making procedure to flush out all options but one in a series of parliamentary votes.

We think that the talks could succeed despite the odds, as May and Corbyn both have an interest in getting this over with. Corbyn needs a deal he can claim to be a customs union. It will disappoint some die-hard second-referendum supporters, but accepting a second referendum would also carry big political risks for him, and may produce a new leadership challenger. 

May’s task is to get at least half of her party on board for a compromise. What makes a deal attractive to the Tories is that May would resign soon afterwards, giving enough time for the Tory conference in October to select a successor before possible elections in early 2020. 

This relative alignment of interests is why we would not rule out a deal - either on an agreed joint future relationship, or at least on a method to deliver an outcome.

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