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21 June 2011

A progressive coalition government is formed in Finland

The elections of last April led Finland to a historic situation. The big percentage of the nationalists "True Finns” brought to an end the “bipartisanship times” in power. The governmental coalition, built after True Finns option to stay in opposition, was then established by six parties with red-green-majority (Social democrats, Left, Greens).

Despite the big differences between parties, they’ve finally managed to build a common program, to which Left alliance contributed with important social reforms. The solution has been widely welcomed by trade unions, and the program, qualified as socialist "manifesto" by media, has been criticized by the Finnish Industries Confederation and financial representatives.

The new political program includes: an increase of 100 Euros of unemployment benefits, 25 Euros more for basic security, increases in housing benefits and rent control by the state (The Housing Finance and Development Centre of Finland that produces social housing will have cuts on part of these rents). In addition, there will be a deduction of tax income for those who have low and middle incomes - to finance this, the capital income tax is increased to 30% or 32% for surplus of 50,000 Euros per year, against today’s 28%. The fee for large inheritances is increased (to 16% instead of 13%) and a new tax to nuclear energy is created, but no more nuclear plants will be built.

The government is committed not to increase either the VAT or the retirement age. Education it is still free, despite previous governments started a process to change it structurally towards a non-free system. Finland will also push a European financial transaction tax and multilateral tax cooperation to close tax havens. Finally, the country is freezing its participation in NATO, withdrawing its troops from Afghanistan and focusing on assistance to civilians.
Unfortunately, and due to the hard economical situation, there are also some bad arrangements that were very difficult to be accepted by the Left as right parties have imposed a decrease in higher education funding, less development assistance and that they will not allow Finland to stop neoliberal solutions and speak clearly on IMF policy and financial mechanisms in Europe.

“This is the biggest extended hand to the very poorest that has happened in my lifetime. I am very proud of these achievements”, said Left Alliance chairman Paavo Arhinmäki.