June 10, 2017 / 8:12 AM / 2 months ago

Nationalists' leadership vote casts doubt over Finland's reforms

Finns Party chairman candidate Jussi Halla-Aho poses for a picture in Helsinki, Finland, May 23, 2017.Tuomas Forsell

JYVASKYLA, Finland (Reuters) - The eurosceptic Finns party is due to elect a new chairman on Saturday in a vote that may toughen their nationalist policy line, spelling trouble for Finland's coalition government.

Foreign minister Timo Soini, known for his hard line during European Union bailout talks during the euro zone crisis, is stepping down after 20 years at the head of the party, potentially paving the way for a more hard-line leader.

Formerly the True Finns, the second-biggest parliamentary party softened its nationalist and anti-EU stance on joining the coalition government in 2015, angering its core voters and plunging its support from a peak of 23 percent in 2011 to around 9 percent in a poll this month.

Latest opinion surveys show anti-immigration hardliner Jussi Halla-aho as favourite over Sampo Terho, who is EU minister.

Halla-aho, a member of the European Parliament, has said he would push coalition partners to tighten immigration policy, and that he could also take the Finns out of coalition government.

While snap elections are seen as unlikely, the break-up of the coalition could derail healthcare and local government reforms central to its plan to balance public finances.

Finland is recovering from a decade of stagnation and problems including the decline of Nokia's former phone business.

Finland's European Affairs Minister Sampo Terho speaks in Helsinki, Finland June 5, 2017.Tuomas Forsell

In a survey by the Helsingin Sanomat newspaper, 50 percent of polled party supporters said they would back Halla-aho, while 30 percent supported Terho.

But pollsters say the race is difficult to predict as any party member can show up and vote at the party congress in Jyvaskyla, central Finland.

"I'd say its closer to fifty-fifty. The frontrunners have been very even in debates and during the campaign," said Markku Jokisipila, the director at the Centre for Parliamentary Studies of the University of Turku.

Terho told Reuters last week he wants to keep the party in government until the 2019 general election to ensure continuity in economic policy.

The government, which includes Prime Minister Juha Sipila's Centre Party and the conservative NCP, has cut spending and reformed labour laws to boost growth and curb public debt.

Both leading candidates disagree with the pro-EU coalition partners over Finland's EU policy. Halla-aho wants Finland to leave the bloc, while Terho has said he might promote a referendum on EU membership after a 2019 general election.

The party congress is expected to elect the new chairman at around 1100-1200 GMT.

Editing by Jussi Rosendahl and Alexander Smith

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