Finland: Austerity on pause, instability on the horizon

Left Alliance leader, Li Andersson (wikimedia/CC)

The end of austerity in Finland has been loudly proclaimed by the new Social Democratic prime minister, Antti Rinne. The announcement came as talks were concluded between his party and  Keskusta (the Center Party), Vihreät (Green League), Vasemmistoliitto (Left Alliance) and the RKP (Swedish People’s Party).

However, this government is an unstable left-right amalgamation with several weak points, any one of which could lead to its breakdown. While cutbacks are paused, the new government is not fully reversing their effects.

The government is being touted as “left” on the basis that it includes the SDP, Greens and Left Alliance. The Green League, though, has committed itself to “eco-capitalism” and promotes tax cuts and deregulation as a way to stop the environmental catastrophe! The SDP itself did only the barest minimum to fight austerity under the Stubb and Sipilä governments – and it joined hand-in-hand with Kookomus (National Coalition), the Thatcher-worshipping Finnish Conservatives, to initiate austerity in 2011.

Some people suppose that Center, the party that has spent the past four years forging ahead with vicious austerity and privatisation while fetishising “entrepreneurship,” will swing leftward and follow the SDP’s lead. In decades past this might have been true–Center’s traditional base is small farmers. But the rise of Juha Sipilä and his technocratic leadership style shows Center’s turn towards being more like other European liberal big business parties.

Despite voters punishing them for leading the past four years of cuts and sell-offs, Center drew “red lines” to prevent the new government from raising business taxes or pursuing any model of “Sote” health care reform other than Center’s own.

Health care

The Sote reform is a point of weakness in the new government. At its heart is an important contradiction. During the election, Left Alliance leader Li Andersson condemned Center’s programme as opening the door for Finnish health care to be taken over by a cartel of four private providers. Now the Left Alliance will be not just supporting Center’s plan but administering it. Even the past two governments of all right wing parties couldn’t reach agreement on how to destroy Finnish health care!

This government might not even get the chance to attempt it. Its programme is still incomplete: the five parties have been unable to agree whether to close a funding gap of a 1.2 billion euro through raising the capital gains tax or from the liquidation of state assets. In other words: will the government fund itself from the sale of private property or public property?

Antti Rinne has signaled which side he will take. Center Party MPs received not only the Finance Ministry but the Economy Ministry. The Social Democratic former trade union leader is keeping the Finnish economy in the hands of neo-liberals.

Government programme

There are some areas of increased spending, but each comes with deep flaws. Some major points in the new programme:

  • Over 100 million euro will be allocated to cover some of the cost of extending compulsory education, but a billion euro is needed just to repair the effect of cuts. The amount restored to universities amounts to only about 40% of what was cut. No new money is being given to a vocational education in crisis.
  • Rail infrastructure will be expanded, but privatisation of rail will continue. Sámi activists have already objected to the building of the Kirkenes rail line, which would cause irreparable harm to their lands and traditional way of life.
  • The “trans laki” law regulating the legal rights and recognition of transgender people will be modified. But the proposed changes are still bound by the gender binary approach and still restrict legal transitioning to adults. Moreover, changes to the law were already demanded by a judicial review in 2018…the new law is the bare legal minimum the government could get away with!
  • Finland’s admittance of “quota” refugees will increase from 750 to 850. But refugees whose claims are refused will be forced to wear electronic shackles monitoring their movement in public.
  • Government members say the hated “active model” of unemployment is coming to an end, but details show the model will continue with only small changes to penalties for not actively seeking work.

The Left Alliance’s acquiescence in exchange for a few crumbs shows the inherent weakness of a “left” party not bound tightly to the working class. The Left Alliance calls itself a socialist party, and some of its 11,000 members hold important positions in the trade union movement. But the needs and concerns of working class members are often replaced with the fantasies of academic “experts.”

In 2017 and 2018, the Left Alliance made several economic demands we could support: a €10 per hour minimum wage, shorter working weeks with no loss of pay, a high level of basic income that complements rather than replaces the benefits system. These demands have all been given up in exchange for token, short-term gains.

Socialist approach

Socialists look at both the immediate and the long term. The small amount of increased spending is conditional on two issues: the employment rate must reach 75% by 2023 and the state budget must be balanced by the same deadline. With another global recession on the horizon, stable high employment at levels not seen in decades seems illusory. The demand for a balanced budget meanwhile comes in spite of the objections even of capitalist economists.

The need for fiscal “responsibility” washes away where military expenditure is concerned. All parties in the new government agree to spend 11 billion euro on unwanted, un-needed new jet fighters, while keeping the door open to Finnish membership of NATO.

By abandoning being in opposition, the left concedes ground to the ascending nationalist far right. Racist demagogue Jussi Halla-Aho, is now leader of the opposition and his party is one seat away from being the biggest in Parliament.

But socialists have reasons to be hopeful. Since the election was called, workers of all ages have shown a clear change in mood: more willing to take action, more willing to accept socialist ideas, more interested in the ideas of CWI.

The climate general strike called by Greta Thunberg for 20 September will be an important indicator of whether Finnish unions are ready to take political action. In 2020, almost all the major collective bargaining agreements come up for re-negotiation and we will see which unions will stand up to a traitorous Social Democratic-led government. The campaigns for refugee rights, against sexism and against homophobia continue to build. Wherever the oppressed are in motion, socialists will be there, canvassing support.

Sosialistinen Vaihtoehto says:

  • Take the biggest companies into public ownership. Run them democratically to create well-paying, green jobs.
  • Full funding for education at every level. No fees, no charges for materials, reverse the cuts!
  • Language rights and self-determination for Sámi and other national minorities. The North is not a dumping ground!
  • Recognise the full spectrum of gender identities at all ages.
  • Dignity for refugees. No to racism and xenophobia, no to criminalisation of asylum seekers.
  • No to the “active model”: guaranteed jobs for all who can work and public support for those who can’t. Expand the benefit and pension system.
  • For a living wage and a shorter workweek with no loss of pay!
  • For fighting unions and a mass socialist party of the working class!

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June 2019