Finnish government resigns over failure to agree reforms

12 Mar 19

The Finnish government has resigned ahead of the general election because it said it could not deliver a healthcare reform package seen as crucial to sustainable public finances.

Like in many other countries, the healthcare system in Finland, which is free, has been affected by rising treatment costs and people living longer.

Finland was planning to cut costs and boost efficiency, but the move has stalled for years. It had aimed to slow the increase in healthcare spending over the next decade, reducing the budget to €18.3bn in 2019, against an estimate of €21.3bn.

It also planned to centralise services into regional healthcare authorities, to take over from the current local municipalities, and use more private healthcare providers.

However, the coalition was unable to agree on the package.

Centre Party prime minister Juha Sipila told reporters at a news conference on Friday: “The picture I’ve got over the last few days from parliament forces me to draw conclusions. There is no way ahead. I am hugely disappointed.”

The coalition, made up of Sipila’s Centre Party, the conservative National Coalition, and the Eurosceptic Blue Reform party, resigned one month before the forthcoming election on 14 April.

Sipila said: “We need reforms, there is no other way for Finland to succeed.”

A parliament committee said the reform package was unconstitutional and required significant changes the government did not have time to implement before the election.

The country’s president Sauli Niinisto accepted the resignation but asked the government to continue in a caretaker capacity until a new cabinet is formed.

Other Nordic countries are reforming to accommodate for the ageing population by increasing the age of retirement. However, the problem has hit Finland particularly hard, after the 2008 financial crisis magnified the impact of demographic changes, such as a rapidly declining birth rate.

The proportion of over 65-year-olds in the Nordic country, which has a population of 5.4 million, is expected to reach 26% by 2030.

Successive Finnish governments have tried to push through healthcare reforms over the past 12 years, but all have failed.

The country spends 9.5% of GDP on health and was ranked ninth among EU countries in terms of health expenditure in 2016, relative to the size of its economy, according to Eurostat figures.

“Since elections were already set for 14 April, the resignation of the government is not a big deal at all at this point. Still, it does create some ugly headlines,” Nordea’s chief analyst Jan von Gerich wrote on Twitter.

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