Sipilä Cabinet

Juha Sipilä's cabinet
74th cabinet of Finland
Incumbent
Date formed	29 May 2015
People and organisations
Head of state	Sauli Niinistö
Head of government	Juha Sipilä
Member party	Centre Party New Alternative National Coalition Party
History
Election(s)	2015 election
Predecessor	Alexander Stubb's cabinet

Juha Sipilä's cabinet is the 74th Government of Finland. It was formed after the parliamentary election of 2015 and formally appointed by President Sauli Niinistö on 29 May 2015.^[1][2] After June 2017 cabinet consist of Centre Party, the New Alternative -parlamentary group and the National Coalition Party.

Following the parlamentary election of 2015 and cabinet discussions a coalition government consisting of three centre-right parties: the Centre Party, the Finns Party and the National Coalition Party was formed. The Centre Party returns to lead the Government after four years in opposition. This is the first time that the right-wing populist party, the Finns Party, is participating in the Government of Finland^[3] and the first time since 1979 that the Swedish People's Party is out of the Finnish government. The center-right coalition parties had 124 seats (62%) in the 200-seat parliament when it started. On 22 June 2016, the Finns Party MP Maria Tolppanen joined the SDP, after which the coalition parties had 123 seats.^[4]

In the June 2017 Finns Party leadership election party's whole leadership was changed and Jussi Halla-aho was elected the chairman of the party. On 12 June 2017, Sipilä and Orpo declared that they did not see grounds for continued co-operation with the Finns Party, effectively announcing imminent dissolution of the Sipilä Cabinet. They cited disagreements in the value base, as well as Halla-aho's proposed leadership of his party from Brussels as obstacles for maintaining the three-party coalition.^[5] Then portion of the Finns Party split from the party and formed a new pariamentary group named New Alternative and declared to be willing to continue in the cabinet with its then current members and program. As a result New Alternative -group took the Finns Party's place in the cabinet and the cabinet continues with same ministers as before, while the Finns Party went into opposition. After the split, the total number of seats by the government changed a few times, due to the shifting allegiance of some Finns Party MPs, but ultimately it got settled to 106 seats (1 of them being chairman of the parliament and not able to vote)^[6][7]

Sipilä government has out of 17 ministers, 12 (70.6%) men and five (29.4%) women. Sipilä’s cabinet is most male-dominated of the 2000s in Finland.^[8]

Portfolios

From start, there were six ministers from the Centre Party and four ministers from the National Coalition Party and Finns Party.^[1][2] In April 2017, the government decided to split some portfolios, so that the work load of certain ministers would decrease and each party would get one more minister position.^[9]

Energy policy

Minister Olli Rehn supported in September 2016 the energy subsidy to heavy industry to compensate the EU’s Emissions Trading System expenses of oil and coal use costs to industry. It would cover just under 100 industrial facilities, with the biggest beneficiary being the forestry industry.^[10]

Economic Policy

Sipilä's government has struggled with Finland's poor economic performance,^[11] caused according to Paul Krugman and others by the constraints of its eurozone membership and aftershocks from the European debt crisis,^[12][13] but also by the decline of the paper industry, the fall of Nokia and a diminution in exports to Russia.^{[14][15][16][17]} Its attempts to address the problems through policies of spending cuts and reducing labour costs have been controversial, particularly cuts to education spending that are seen as threatening Finland's successful public education system.^[16][18] These austerity measures have partly been implemented due to European Commission pressure, which has urged Finland to improve its adherence to the Stability and Growth Pact^[19] and reform its labour market to improve competitiveness.^[20] On 22 July 2015, Sipilä announced his government's commitment to reducing 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.^[21]

There have been protests against the government's austerity measures.^[18][22]

Controversies

Mistaken facts in proposal to allow indirect securities holding

In December 2015 Finance minister Alexander Stubb claimed that 90% of civil servants consulted supported a controversial law proposal - while in fact only 10% had done so. 2 of 21 experts asked to give their opinion supported the idea. The law planned by the Sipilä government would have made it easier to hide the ownership of securities. Stubb apologize for his mistake to the parliament. The proposal was later cancelled.^{[23][24][25][26]}

Member of cabinet utilizing tax planning within EU

Foreign Trade and Development Minister Lenita Toivakka is related to a company that has established a Belgian holding company. Toivakka accused Social Democratic MP Timo Harakka of lying when he said in the parliament 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 maintained her hands were clean.^[27]

Katera Steel won a bid with state owned Terrafame mining company

Katera Steel Ltd, a company, where Prime Minister Juha Sipilä's two grownup sons held a 5% share, won a public bid from the state-owned Terrafame mining company a month before the Prime Minister approved a €100 million public funding for the mine. The won bid had no connection to new funding to keep the mine running, as the order would have been carried trough also in the case of shutting down the mine.^[28][29] The office of the Chancellor of Justice received over 10 complaints about a possible conflict of interest on Juha Sipilä's part. The Parliamentary Ombudsman ruled February 1st 2017 in favour of the Prime Minister and found no conflicts of interest in the matter. ^[30] The ombudsman's report stated in February 2017 that the PM's children did not get any special benefit from the decision to grant Terrafame government funds. He states that there was no conflict of interest.^[31]

In January and February 2017 three journalists, Jussi Eronen, Salla Vuorikoski and Susanne Päivärinta, resigned YLE based on disagreements with the editor in chief Atte Jääskeläinen on journalistic decisions. The case concerning Prime Minister Juha Sipilä has been named as one.^{[32] [33]} The Council for the Mass Media in Finland (JSN) ruled that Sipilä's conduct had curbed freedom of speech when he bombarded journalists with emails complaining about the story. Finland's media watchdog has given 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.^[34]

Trade promotion to India generated results for Finnish company

On an official trade promotion trip organized by Team Finland in 2016 February to India, one of the joining companies was Chempolis, a company where Prime Minister Sipilä's grown up children holds a 5% stake via their investment company Fortel Invest. Sipilä founded Fortel investment in 1995 and sold his share to his children in June 2012. Chempolis soon announced a 110 million export contract from an oil company located in India. ^[35][36] Finnish Attorney General's Office received four complaints from private citizens regarding the Prime Minister's role in promoting also the company. ^[37]

Deputy Chancellor of Justice Risto Hiekkataipale says that Prime Minister Juha Sipilä did not act improperly in regard to Chempolis, a company partly owned by his children. Hiekkataipale said that Sipilä did not have a conflict of interest in India in 2016 when delegation promoted also the firm owned by Sipilä’s children. According to Deputy Chancellor of Justice Sipilä was not impartial by including relatives business in the trip program.^[38]

Critics

Constitution

According to the Chancellor of Justice of Finland in December 2016 the law proposals of Sipilä government have major constitutional problems.^[39] According to the Chancellor of Justice criticize the government for attempting to hastily push through a host of new laws, some of which were found to be unconstitutional. None of the ministers have law degree.^[40]

According to Helsingin Sanomat the Constitutional problems in the objectives of Sipilä government have included following: Sipilä government aimed to release the tax evasions from responsibility of prosecutions. Sipilä government aimed to raise public funds with higher fines (double size). The intention of fines is not to finance the state expenses. Sipilä government aimed to make work obligations (forced labor) for unemployed persons. Sipilä government aimed obligatory interviews for unemployed persons by commercial companies. Sipilä government aimed to reduce inheritance tax that stumbled in the constitutional aspects.^[41]

Terrafame mining company

Sipilä government agreed to sell a share of its state owned Terrafame mining company to the multinational commodity trading company Trafigura, which is the world's largest private metals trader. Trafigura made a 75-million-euro investment via its fund management subsidiary, Galena Asset Management, to own a 15.5 % share in the nickel and zinc mine Terrafame in Talvivaara.

Trafigura managers have dozens of connections in tax havens in Bahama, Malta, Luxemburg, Marshall Islands and Switzerland, in total in more than 150 tax havencompanies^[42] Finland’s Minister of Economic Affairs Mika Lintilä was closely involved in efforts to attract a private investor to the mine.^[43]

See also

• Politics of Finland

References