Sipilä Cabinet

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Sipilä's Cabinet
Flag of Finland.svg
74th cabinet of Finland
Incumbent
Juha Sipilä 18-4-2015.JPG
Date formed29 May 2015
People and organisations
Head of stateSauli Niinistö
Head of governmentJuha Sipilä
No. of ministers14 (2015–2017)
17 (2017–)
Member partiesSince 13 June 2017
Centre Party
National Coalition Party
Blue Reform
History
Election(s)2015 parliamentary election
Budget(s)€55,774 billion (2018)[1]
Incoming formationCentre Party
National Coalition Party
Finns Party
PredecessorStubb Cabinet

The cabinet of Juha Sipilä is the 74th and incumbent government of Finland. It was formed following the parliamentary election of 2015 and formally appointed by President Sauli Niinistö on 29 May 2015.[2][3] Since June 2017, the cabinet has consisted of a coalition formed by the Centre Party, Blue Reform and the National Coalition Party. The cabinet's Prime Minister is Juha Sipilä.

Following the parliamentary election of 2015 and cabinet discussions, a coalition government consisting of the three largest centre-right parties – the Centre Party, the National Coalition Party, and the Finns Party – was formed. Centre returned to lead the government after four years in opposition. This was the first time that a right-wing populist party, namely the Finns Party, had participated in a Finnish government[4] and the first time since 1979 that the Swedish People's Party was left out. The center-right coalition had a total of 124 seats (62%) in the 200-seat parliament when it started. On 22 June 2016, Finns Party MP Maria Tolppanen joined the Social Democratic Party, which decreased the government's share to 123 seats.[5]

As a result of the 2017 Finns Party leadership election, Jussi Halla-aho became the party's leader. On 12 June 2017, Sipilä and Orpo declared that they did not see grounds for continued co-operation with the Finns Party, effectively announcing the imminent dissolution of the Sipilä Cabinet. They cited disagreements in the parties' value bases, as well as Halla-aho's newfound leadership of his party from Brussels as obstacles for maintaining the three-party coalition.[6] On the following day, 13 June 2017, a group of the Finns split from the party and formed a parliamentary group called Blue Reform (initially New Alternative), and declared to be willing to continue in the cabinet with its members and program. As a result, Blue Reform took the Finns Party's place in the cabinet and the cabinet continued with the same ministers as before. Meanwhile, the Finns Party went into opposition. After the split, the total number of seats held by the government changed a few times due to the shifting allegiance of some Finns Party MPs, but ultimately was settled to 106 seats, of which one is the speaker of the parliament, and as a result is unable to vote.[7][8]

The Sipilä cabinet is the most male-dominated government in contemporary Finnish history. It consists of 17 ministers, of which twelve are men and five women.

Ministers[edit]

At the start of its tenure, there were a total of 14 ministers in Sipilä's cabinet: six ministers from the Centre Party and four ministers each from the National Coalition Party and the Finns Party.[2][3] In April 2017, following concerns that some ministers have too much responsibility to serve their job properly, the government decided to split some of the portfolios. As a result, the work load of certain ministers decreased and each party received one additional minister position, resulting in a total number of 17 ministers in the government.[9]

On 13 June 2017, the five ministerial portfolios belonging to the Finns Party were granted to Blue Reform.

Portfolio Minister Took office Left office Party
Prime Minister Juha Sipilä29 May 2015IncumbentCentre
Minister deputising for the Prime Minister Timo Soini29 May 201528 June 2017Finns
 Petteri Orpo28 June 2017IncumbentNational Coalition
Minister for Foreign Affairs Timo Soini29 May 2015IncumbentBlue Reform
Minister for Foreign Trade and Development Lenita Toivakka29 May 201522 June 2016National Coalition
 Kai Mykkänen22 June 20166 February 2018National Coalition
 Anne-Mari Virolainen6 February 2018IncumbentNational Coalition
Minister of Justice and Employment Jari Lindström29 May 20155 May 2017Finns
Minister of Justice Antti Häkkänen5 May 2017IncumbentNational Coalition
Minister of Employment Jari Lindström29 May 2015IncumbentBlue Reform
Minister of the Interior Petteri Orpo29 May 201522 June 2016National Coalition
 Paula Risikko22 June 20166 February 2018National Coalition
 Kai Mykkänen6 February 2018IncumbentNational Coalition
Minister of Defence Jussi Niinistö29 May 2015IncumbentBlue Reform
Minister of Finance Alexander Stubb29 May 201522 June 2016National Coalition
 Petteri Orpo22 June 2016IncumbentNational Coalition
Minister of Local Government and Public Reforms Anu Vehviläinen29 May 2015IncumbentCentre
Minister of Education Sanni Grahn-Laasonen29 May 2015IncumbentNational Coalition
Minister for European Affairs, Culture and Sport Sampo Terho5 May 2017IncumbentBlue Reform
Minister of Agriculture and Forestry Jari Leppä5 May 2017IncumbentCentre
Minister of Transport and Communications Anne Berner29 May 2015IncumbentCentre
Minister of Economic Affairs Olli Rehn29 May 201529 December 2016Centre
 Mika Lintilä29 December 2016IncumbentCentre
Minister of Social Affairs and Health Hanna Mäntylä29 May 201525 August 2016Finns
 Pirkko Mattila25 August 2016IncumbentBlue Reform
Minister of Family Affairs and Social Services Juha Rehula29 May 201510 July 2017Centre
 Annika Saarikko10 July 2017IncumbentCentre
Minister for Housing, Energy and the Environment Kimmo Tiilikainen5 May 2017IncumbentCentre

[10][11]

Policy[edit]

Energy[edit]

In September 2016, Minister of Economic Affairs Olli Rehn (kesk.) announced his support for enacting an energy subsidy to serve heavy industry's use of oil and coal as a compensatory measure for the expenses arising from the EU’s Emissions Trading System. The subsidy would cover about 100 industrial facilities, with the biggest beneficiary being the forestry industry.[12]

Economy[edit]

Sipilä's government has struggled with Finland's poor economic performance,[13] caused according to Paul Krugman and others by the constraints of its eurozone membership and aftershocks from the European debt crisis,[14][15] but also by the decline of the paper industry, the fall of Nokia and a diminution in exports to Russia.[16][17][18][19] Its attempts to address the problems through policies of cuts to government spending and reducing labour costs have been controversial, particularly those in relation to education spending that have been seen as threatening to Finland's successful public education system.[18][20] These austerity measures have partly been implemented due to pressure from the European Commission, which has urged Finland to improve its adherence to the Stability and Growth Pact[21] and reform its labour market to improve competitiveness.[22] On 22 July 2015, Sipilä announced the government's commitment to the reduction of Finnish wage costs by 5% by 2019, an internal devaluation caused by Finland's loss of the ability to devalue its currency to boost competitiveness.[23] After a protracted negotiation, the "competitiveness contract" (Finnish: kilpailykykysopimus) was eventually agreed upon in summer 2016, with a coverage of 90% of wage earners and an estimated effect of 4.2% on the cost of labor.[24] In 2017, according to Bank of Finland and SAK economists, the contract proved to be largely successful, with a significant improvement in competitiveness, a 3% growth rate, reduced unemployment, and increased exports.[25][26]

There have been protests against the government's austerity measures.[20][27]

Development aid[edit]

Finnish development aid in 2017 was 0.41 % of GDP. Sipilä government reduced Finnish support.[28] The reference states Sweden and Norway support was over 1 % in 2013.[29]

Tax avoidance[edit]

In 4/2018 Sipilä government reported objective to end the tax planning agreement with Portugal.[30] In 2/2018 the European parliament planned an inquiry into financial crime, tax evasion and tax avoidance including Portugal. [31]

Controversies[edit]

Wrongful claims in proposal to allow indirect securities holding[edit]

In December 2015, Minister of Finance Alexander Stubb claimed that 90% of civil servants consulted supported a controversial law proposal concerning securities holding, while only 10% had done so. 2 out of 21 experts asked to give their opinion were in favor of the idea. If passed, the proposed legislation would have made it easier to hide one’s ownership of securities. Stubb has apologized for his mistake to the parliament. The proposal was later withdrawn by the government.[32][33][32][34]

Minister’s tax planning usage in the EU[edit]

Foreign Trade and Development Minister Lenita Toivakka has connections to a company that has, in turn, established a Belgian holding company. Toivakka accused Social Democratic MP Timo Harakka of lying in front of the parliament when he said that the family business of Minister Toivakka had set up the holding company in Belgium for tax planning purposes. Toivakka later had to apologize and admit that some of her previous statements were misleading, although she admitted to no wrongdoing.[35] She resigned from her ministerial post in 2016 due to the controversy.[36]

Katera Steel bid with Terrafame[edit]

Katera Steel, a company in which Juha Sipilä's two sons hold a 5% share each, won a public bid from the state-owned Terrafame mining company one month before the Prime Minister approved a €100 million public funding for the mine. The winning bid had no connection to new funding for keeping the mine running, as the order would have been executed even in the case of the mine shutting down.[37][38] The office of the Chancellor of Justice received more than ten complaints about a possible conflict of interest on Sipilä's part. On 1 February 2017, the parliamentary ombudsman ruled in favour of the Prime Minister and found no conflicts of interest in the matter.[39] The ombudsman's report stated in that Sipilä's children did not get any special benefit from the decision to grant Terrafame additional government funds.[40]

#Sipilägate[edit]

In January and February 2017, three journalists, Jussi Eronen, Salla Vuorikoski and Susanne Päivärinta, resigned from the public broadcaster Yle based on disagreements with the editor-in-chief Atte Jääskeläinen on the matter of journalistic integrity. The case concerning Prime Minister Juha Sipilä has been named as one.[41][42] The Council for the Mass Media in Finland (JSN) ruled that Sipilä had curbed freedom of speech when he bombarded journalists with emails complaining about the story. Finland's media watchdog gave Yle a reprimand over its reporting of a potential conflict of interest in Prime Minister Juha Sipilä's handling of the state-owned mine Terrafame. The council found that Yle changed tack after Sipilä made contact, killing follow-up stories and changing others.[43]

Chempolis[edit]

During an official trade promotion trip to India organized by Team Finland in February 2016, a conflict of interest arose from the inclusion of Chempolis, a company in which the Prime Minister's grown up children hold a 5% stake. Following the trade promotion trip, Chempolis announced a €110 million export contract from an Indian oil company.[44][45] The Finnish Chancellor of Justice received four separate complaints from private citizens regarding the Prime Minister's role in promoting Chempolis in India.[46] Deputy Chancellor of Justice Risto Hiekkataipale has stated that the Prime Minister did not act improperly in regard to Chempolis. According to the office, Sipilä had not acted impartially by including his relatives' business in the trip program.[47]

Constitutional issues[edit]

According to the Chancellor of Justice of Finland in December 2016, the Sipilä cabinet's law proposals have had major constitutional problems.[48] The Chancellor of Justice criticized the government for attempting to hastily push through a host of new laws, some of which were found to be unconstitutional.

None of the cabinet's ministers have a degree in law.[49]

According to Helsingin Sanomat, the constitutional problems in the Sipilä government's conduct have included the following:

  • The government aimed to release the crime of tax evasion from legal consequences.
  • The government aimed to raise public funds with twice-higher fines; the intention of the fines was not found to go towards financing the state's expenses.
  • The government aimed to create work obligations (unfree labor) and obligatory interviews for unemployed persons by commercial companies.
  • The government aimed to reduce the inheritance tax.[50]

Terrafame sale to Trafigura[edit]

The Sipilä cabinet agreed to sell a share of the state-owned mining company Terrafame to multinational commodity trading firm Trafigura. Trafigura made an investment worth 75 million euros to own a 15.5% share in Terrafame. The move has been criticized due to Trafigura's connections to tax havens, as well as the Minister of Economic Affairs Mika Lintilä's (kesk.) close involvement in the efforts to attract a private investor to the project.[51][52]

Electric bike subsidy[edit]

On March 13, 2018, the Ministry of Transport and Communications announced that starting on July 1, 2018, a subsidy of €400 would be granted to any Finnish citizen purchasing an electric bicycle. Minister of Transport and Communications Anne Berner (C) proposed the subsidy as an incentive to raise the combined modal share of bicycle- and walking-based commuting to 30% nationwide.[53]

On March 21, 2018, Minister of Finance Petteri Orpo (kok.) told Demokraatti that he had only heard about the LVM plan through the press and that he would not support the initiative.[54] Blue Reform chairperson Simon Elo deemed the LVM proposal as fillarikommunismia, (lit. "bike communism").[55] Berner declared that the ministry would continue to pursue the program's launch, substituting the €400 flat rate with a percentage-based model similar to those in practice in Norway and Sweden.[56]

See also[edit]

References[edit]

  1. ^ "Budjetti 2018". Valtioneuvosto.
  2. ^ a b "Sipilä's Government appointed". valtioneuvosto.fi. the Finnish Government. 29 May 2015. Retrieved 29 May 2015.
  3. ^ a b "President appoints new cabinet". yle.fi. Yle. 29 May 2015. Retrieved 29 May 2015.
  4. ^ Sipilä opts for right-leaning government Retrieved on 10 May 2015
  5. ^ "Perussuomalaisten kansanedustaja loikkaa Sdp:n riveihin". Helsingin Sanomat. 22 June 2016. Retrieved 22 June 2016.
  6. ^ "Sipilä: Hallituksen toimintakyky haluttiin varmistaa". Yle.fi. 12 June 2017. Retrieved 12 June 2017.
  7. ^ "Ritva Elomaa siirtyy takaisin perussuomalaisiin – Halla-aho kehottaa muitakin "pohtimaan asiaa"". Helsingin-Sanomat. 22 June 2017. Retrieved 22 June 2017.
  8. ^ "RVeera Ruoho vaihtaa kokoomukseen – "Päätös oli raskas, kokoomus uskottava puolue"". Yle. 30 June 2017. Retrieved 30 June 2017.
  9. ^ Nyt se on varmaa: Hallitukseen kolme uutta ministeriä - oikeusministerin salkku kokoomukselle 27.4.2017 Iltalehti
  10. ^ "Ministers". Valtioneuvosto. Retrieved 2017-11-25.
  11. ^ "Composition of a certain government, 74. Sipilä". Valtioneuvosto. Retrieved 2017-12-13.
  12. ^ Economy Minister Rehn stands firm on contested electricity subsidy for heavy industry 13.9.2016 Yle News
  13. ^ Walker, Andrew (2016-02-29). "Finland: The sick man of Europe?". BBC News. Retrieved 2016-11-06.
  14. ^ Paul Krugman (29 May 2015). "Northern Discomfort". The Conscience of a Liberal. https://krugman.blogs.nytimes.com/2015/05/29/northern-discomfort/: New York Times. Missing or empty |url= (help); |access-date= requires |url= (help)
  15. ^ Paul Krugman (1 June 2015). "The Finnish Disease". The Conscience of a Liberal. https://krugman.blogs.nytimes.com/2015/06/01/the-finnish-disease/?_r=0: New York Times. Missing or empty |url= (help); |access-date= requires |url= (help)
  16. ^ "In Finland, the euro is not the real problem". EUobserver. Retrieved 2016-11-06.
  17. ^ "Finland and asymmetric shocks | Bruegel". bruegel.org. Retrieved 2016-11-06.
  18. ^ a b Walker, Andrew (29 February 2016). "Finland: The sick man of Europe?". BBC News. Retrieved 14 November 2016.
  19. ^ "Finland's economic winter". The Economist. Retrieved 14 November 2016.
  20. ^ a b MacDougall, David (18 May 2016). "Down and Out in Helsinki". Politico. Retrieved 26 October 2016.
  21. ^ Goulard, Hortense (9 March 2016). "Commission tells six EU countries to cut budget deficit". Politico. Retrieved 26 October 2016.
  22. ^ "Council recommendation on the 2016 national reform programme of Finland and delivering a Council opinion on the 2016 stability programme of Finland" (PDF). European Commission. 18 May 2016. pp. 4–5. Retrieved 26 October 2016. (8) To restore Finland's competitiveness, the functioning of the labour market must be improved in several ways. On an aggregate level, wage increases have been moderate since the centrally agreed wage deal was agreed in late 2013. Under the agreement, the year-on-year increase in negotiated wages slowed from 1.3% in the last quarter of 2013 to 0.5 % in the fourth quarter of 2015. In June 2015, the social partners decided to extend the agreement into 2016. However, labour productivity growth has not yet recovered and therefore nominal unit labour costs are forecast to increase, albeit more slowly. Negotiations have been carried out to restore cost-competitiveness.
  23. ^ Hirst, Tomas (23 July 2015). "What's happening to Finland's economy?". World Economic Forum. Retrieved 14 November 2016.
  24. ^ Eero Lehto: ”Suomen talous piristyi alkuvuonna 2016”, Mitä Missä Milloin Vuosikirja 2017, s. 238–239. Helsinki: Otava, 2016. ISBN 978-951-1-30021-2.
  25. ^ STT, Olli Kuivaniemi /. "Suomella ei ole enää erityistä kilpailukykyongelmaa, sanoo SAK:n pääekonomisti".
  26. ^ "Kilpailukykysopimus ja Suomen viennin viimeaikainen kehitys: Onko tahti parantunut verrattuna muihin EU-maihin? - Suhdanne-julkaisu". 19 September 2017.
  27. ^ "Finland: Economic forecast summary (June 2016)". OECD. Retrieved 14 November 2016.
  28. ^ Suomen kehitystyövarat supistuivat–muiden OECD-maiden apu lisääntyi voimakkaasti YLE 9.4.2018 klo 18:56
  29. ^ "Aid to developing countries rebounds in 2013 to reach an all-time high". OECD. 8 April 2014. Retrieved 18 October 2014.
  30. ^ [https://yle.fi/uutiset/3-10156694 Hallituksen mitta täyttyi: Haluaa irtisanoa Suomen ja Portugalin välisen verosopimuksen – varakkaiden suomalaiseläkeläisten verovapaus päättyy, Esityksen taustalla on Portugalin viivyttely uuden verosopimuksen toimeenpanossa. YLE 12.4.2018
  31. ^ The European parliament has voted to launch an inquiry into financial crime, tax evasion and tax avoidance, saying the Paradise Papers had revealed the “unfinished work” needed to secure fair taxation ise Papers Guardian 8 Feb 2018
  32. ^ a b "Finance Minister flubs figures on investment regulation, opposition questions his credibility".
  33. ^ Osakeomistusten piilottaminen helpottuu YLE 2.10.2015
  34. ^ http://yle.fi/uutiset/3-8502423 Jari Korkki: Ministeri Stubbin pitkitetty anteeksipyyntö YLE 4.12.2015
  35. ^ Minister apologises, admits to misleading statements on Belgian tax planning company YLE 28.4.2016
  36. ^ "Lenita Toivakka to quit as minister as tax scandal hits reputation". YLE. 2016-06-21. Retrieved 2017-09-28.
  37. ^ "Taustatietoa Terrafame Oy:n ja Katera Steel Oy:n välisestä kaupasta - Terrafame".
  38. ^ Firm owned by PM's relatives gets half-million euro order from Terrafame YLE News 25.11.2016
  39. ^ "Ombudsman rules in PM's favour in Terrafame row".
  40. ^ Ombudsman rules in PM's favour in Terrafame row YLE 1.2.2017
  41. ^ [http://www.iltasanomat.fi/kotimaa/art-2000005081822.html Ylestä irtisanoutunut Susanne Päivärinta valottaa lähtönsä taustoja HS:ssa – tylyttää päätoimittaja Atte Jääskeläistä :Iltasanomat 9.2. 20:53
  42. ^ SK: Susanne Päivärinta irtisanoutui Ylestä – syynä jälleen päätoimittajan linja Iltasanomat 9.2. 20:53
  43. ^ Yle reprimanded by media watchdog over PM reporting YLE 23.3.2017
  44. ^ 1. Pääministeri Sipilän ympärillä kuohuu taas: Jättitilaus Intiasta herätti jääviysepäilyt – näin tapahtumat etenivät YLE 10.1.2017
  45. ^ 2. Hallinto-oikeuden emeritusprofessori: "Ratkaisevaa on, millä tavoin Sipilä on osallistunut asian eteenpäin viemiseen Intiassa" Turun yliopiston hallinto-oikeuden emeritusprofessori Heikki Kullan mielestä pääministeri Juha Sipilän tuorein lobbaussotku on mutkikas 10.1.2017
  46. ^ "Oikeuskanslerille tullut neljä Chempolis-kantelua Sipilästä". 11 January 2017.
  47. ^ PM Sipilä cleared of favouring companies owned by relatives YLE 24.3.2017
  48. ^ HS: Chancellor of Justice slams gov’t for “major constitutional problems” in drafted bills 18.12.2016
  49. ^ "Chancellor of Justice's criticism came as surprise to PM Sipilä". Yle Uutiset. Retrieved 2017-11-24.
  50. ^ Hallitus on törmännyt monta kertaa perustuslakiin Helsingin Sanomat 21.12.2017 A18-A!9
  51. ^ Bahaman paperit: Valtion kaivoskumppanin Trafiguran johtajat mukana sadoissa veroparatiisiyhtiöissä YLE 15.2.2017
  52. ^ Criticism for Terrafame investor: Russian ties, suspected tax evasion and toxic waste scandals YLE 11.2.2017
  53. ^ "Sähköpyörien hankintaan ehdotetaan 400 euron tukea". www.lvm.fi (in Finnish). Retrieved 2018-03-22.
  54. ^ "Bernerin sähköpyörätuki tuli valtiovarainministerille täytenä yllätyksenä – hanke voidaan julistaa kuolleeksi, Orpolta ei tukea heru". Demokraatti.fi (in Finnish). Retrieved 2018-03-22.
  55. ^ "Sinisten Elo tyrmää sähköpyörätuen – "Fillarikommunismia"". ts.fi (in Finnish). Retrieved 2018-03-22.
  56. ^ "Liikenneministeri Berner ei luovuta, vaan haluaa yhä tuen sähköpyörille – "Fillarikommunismia", "en tue", hallituskumppanit tyrmäävät". Helsingin Sanomat (in Finnish). 2018-03-22. Retrieved 2018-03-22.
Preceded by
Alexander Stubb's cabinet
Juha Sipilä's cabinet
29 May 2015 —
Succeeded by
Incumbent