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Government Negotiations Consider Cuts

Negotiations aimed at forming a six-party administration in Finland got underway in earnest on Friday morning. Differences remain great on taxation policy issues between the two major players in the talks, the conservative NCP and Social Democrats.

Hallitusneuvottelut alkamassa Säätytalossa.
Hallitusneuvottelut alkoivat Säätytalossa perjantaiaamuna. Image: YLE

The SDP is strongly opposed, for example, to an NCP idea to further raise turnover tax. The parties are also seeking an understanding on how much money needs to be saved to ensure government programmes are funded in the future.

Prime Minister designate and NCP Chairman, Jyrki Katainen, did not pass comment to gathered reporters outside the venue of Friday's talks. At the start of Friday's meeting, he said that "expectations were high." He refused to take a position on the allegations that six billion euros worth of cuts would be proposed.

”I believe that all necessary means must be used to secure the welfare state,” said Katainen. ”The poor’s best friend is strong government finances.”

No deadline has been set for the government formation talks.

SDP Chair Upbeat at Start of Talks

SDP Chair, Jutta Urpilainen, added she had entered the government negotiations in good spirits and thought the atmosphere of the talks was good.

She predicted taxation would, however, be one of the most difficult issues to tackle. Public spending cuts would not be immediately up for consideration but a rather a more overall look at economic issues.

Portugal Bailout Measure Next Week

Urpilainen noted a caretaker administration could present the Portugal bailout package measure before parliament next week. She added a decision might even be forthcoming later on Friday.

The SDP Chair stressed investor responsibility remained key to Finnish support.

Seminar on Economic Issues

Kicking off today’s proceedings was a seminar where party representatives and experts focused on economic questions. In addition, both trade union and employers’ delegations put their views.

Participants also heard an Archbishop’s statement on promoting equality and harmony in society.

A group of students gathered outside the talks to demonstrate for increases in financial aid.

Good Atmosphere at Earlier Talks

On Thursday , the chairpersons of the six parties gathered for an initial meeting. Katainen said a good atmosphere prevailed at the gathering, adding that it was improving all the time.

Various working groups were set up by the party leaders. Unresolved disputes arising from the meetings will have to be thrashed out at a later session of the party chairs.

On Thursday morning, party chairpersons were given a report on the current economic situation. They have not set a final date by which the government formation talks should conclude.

Participating at the meeting were the leaders of the National Coalition, SDP, Left Alliance, Green League, Swedish Peoples’ Party and the Christian Democrats.

The Social Democrats will chair four of the eight working groups, while the National Coalition will chair the other four. The National Coalition will chair the working groups dealing with economic policy, foreign, EU and defence policy, environmental policy and welfare policy.

The Social Democrats take charge of the working groups on municipal and admistrative policy, industrial policy, education, science and culture policy, and justice, security and immigration policy.

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