Finland govt resigns after reform fails

The president approved Prime Minister Juha Sipila's resignation and asked his government to continue as a caretaker government until a new cabinet has been appointed.

Finland's outgoing Prime Minister Juha Sipila said on Friday he was "hugely disappointed" that his cabinet had to resign over its failure to pass a long-planned healthcare reform.

"My government will continue as a caretaker cabinet," Sipila told a news conference, adding he expected Finland to be able to form a government before June or July. Finland is assuming the European's Union rotating presidency on July 1.

The collapse of the government comes just one month before parliamentary elections are due, after Sipila failed to push through the reforms. The changes were crucial to the three-party governing coalition's plan to balance public finances.

Financial constraints are colliding with the healthcare costs imposed by Finland's fast-ageing population. But cutting those costs is a major political obstacle in a Nordic country that historically has provided an extensive - and expensive - healthcare system.

Sipila resigned "because the healthcare reform cannot be accomplished during this government term", Antti Kaikkonen, the head of Sipila's Centre Party's parliamentary group, wrote on Twitter. Several governments have tried to push through reforms in different forms over the past 12 years.

"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 wrote on Twitter.

According to the government, the reform could have curbed the annual growth of Finland's public social and healthcare expenses to 0.9 per cent from the current estimate of 2.4 per cent between 2019 and 2029.

Sipila had previously said he would dissolve his centre-right coalition government if it failed to push through its healthcare and local government reform.

Australian Associated Press