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Published: Sunday April 6, 2014 MYT 5:31:34 AM
Updated: Sunday April 6, 2014 MYT 5:31:34 AM

Finland's PM Katainen to step down, eyeing EU posts

HELSINKI (Reuters) - Finnish Prime Minister Jyrki Katainen announced on Saturday that he was stepping down in June with a view to taking a senior European Union post, a move that could further unsettle a coalition government that last month lost one of its parties.

Katainen, who had led a quarrelsome six-party coalition government since 2011, said he would not run again as chairman of his conservative National Coalition party at its congress in June, which means he will then cease to be prime minister.

The surprise announcement means there is no clear frontrunner to succeed him; Finnish media have floated the names of Economy Minister Jan Vapaavuori, Municipal Minister Henna Virkkunen, EU Minister Alexander Stubb or Petteri Orpo, who heads the party in parliament.

Katainen took the helm of National Coalition in 2004, taking the traditional conservative party in a more liberal direction and leading it to power in 2011 for the first time in 20 years.

He served as finance minister in the previous governing coalition and also as vice president of the European People's Party, the biggest grouping in the European parliament, until 2012.

He said he would not run again for the Finnish parliament next year, or for the EU parliament in May, but that he was interested in international roles.

"For example, membership of the (European) Commission or special duties outside the commission, which are given after the election - I am interested in them," he said in a speech at a party campaign event. "If those are not possible, then I'll just look at something else."

"This is a good time to hand over the party leadership... It just feels like the right thing to do after 10 years ... I want to move forward in my life," he said.

COALITION DISPUTES

The 42-year-old has been seen as a potential contender for top EU posts, although Finland's tough stance towards bailouts in the euro zone crisis might make him unattractive to southern EU states.

Katainen has, however, preserved Finland's pro-European line despite the dramatic rise of a eurosceptic party, The Finns.

His departure adds to the uncertainty in the left-right coalition in its last year in office.

Left Alliance quit the government last month over its plans to cut more spending.

The second biggest party in the coalition, the Social Democrats, could decide to replace their leader, Finance Minister Jutta Urpilainen, at a party congress next month because of low poll ratings. Union boss Antti Rinne is the leading candidate to replace her.

And the Greens party, now the third-biggest member of the coalition, has threatened to walk out in protest against nuclear power plans.

Unlike other Nordic countries, Finland has a strong tradition of majority governments, and analysts have said the political turmoil could lead to an early election in autumn.

Finland, although among the few euro countries with top triple-A credit ratings, has been stuck in recession for two years, and Katainen's government has tried to curb debt with tough austerity decisions.

In the recent party polls, National Coalition sits second after the opposition party The Centre.

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