He’s back

Negotiations over who will take part in the next Finnish government have proven sticky. Six weeks after the elections, a deal still hasn’t been struck, meaning that Finland is still stuck with a caretaker government. The negotiations have now entered a new phase, following the Green Party's departure from the talks (it seems that forming a government with so many right-wing parties proved a bit too much for them).

So, following some twists and turns, the True Finns are now back at the negotiation table. Remember that the True Finns threw in the towel after they failed to reach a compromise on Finland’s participation in the Portuguese bail-out - an issue which the party vehemently opposes and which it won many votes on.

Without the Green Party, National Coalition leader and government negotiator Jyrki Katainen will need the True Finns’ support to achieve a majority in the Finnish parliament. According to Yle, the Centre Party is taking part in the negotiations on the condition that the True Finns are also included (the reason for this is unclear to us).

Soini, seemingly happy to be back, said that he is ready to restart negotiations but first wants to make sure that the True Finns' demands on the EU are met. “At this point, the three other big parties are on the same footing as we are”, said Soini today, without spelling out exactly what he means. He did, however, add, “I’ve been right all this time...In Europe, the criticality of these [bail-out] packages is increasing each day”.

The True Finns are expected to clarify their demands later this week. Interestingly, things have moved on considerably since the last discussions, as in addition to the controversial Portuguese rescue package, a second Greek bail-out has been added to the mix. How will Soini tackle Finland’s participation in a fresh rescue package for Greece, knowing that there’s a huge risk that a substantial chunk of the cash lent stands the risk of never being paid back to Finnish taxpayers (as Greece is likely to default in 2013-2015)? Soini said today: "We will not vote for bailout packages. But will that stop us from entering the government? That remains to be seen."

Add that to Slovakia’s resistance to activating the EFSF (the eurozone only bail-out fund for Greece) and it appears that the EU's headaches just got worse. (Incidentally, the return of the True Finns also increases the risk of the EFSM, the EU-wide bail-out fund for which the UK is partly liable for, being activated.)

Just when you thought the eurozone plot couldn't get any thicker….