Finland’s Government Survives Confidence Vote on Cyprus Bailout

Finland’s government survived a confidence vote brought by the opposition after lawmakers backed its handling of the Cyprus bailout.

The Helsinki-based parliament voted 86 to 65 to support Prime Minister Jyrki Katainen’s six-party coalition. None abstained and 48 were absent.

Finland’s minority opposition has criticized the government for participating in the 10 billion-euro ($13 billion) rescue to the Mediterranean island nation, the euro-area’s fifth international aid infusion in almost three years. “The Finns” party filed the motion on April 5 to force a debate over the bailout in a plenary session.

Rescues funded by the European Stability Mechanism are approved by the Finnish legislature’s Grand Committee, while payouts from the previous rescue fund, the European Financial Stability Facility, were discussed and approved through a vote in which all lawmakers were able to take part.

Germany’s lower house of Parliament, the Bundestag, yesterday backed the country’s participation in the rescue by 487 votes to 101 with 13 abstentions. German lawmakers “recognized their responsibility for the euro and the euro zone, sending a strong signal,” Finance Minister Wolfgang Schaeuble said after the vote.

`Tax Haven'

“Finnish tax revenue is used to prop up a tax haven, which doesn’t collect taxes to fund itself,” Timo Soini, who heads “The Finns” party, said in the motion on April 5. “In addition, we’re saving very questionable funding sources and supporting money laundering.”

Finnish Finance Minister Jutta Urpilainen defended the rescue on April 17, saying the depositor bail-in agreed on as part of the package “safeguards taxpayers from mistakes others made” and means investors share the burden, in line with the government’s stance.

The Grand Committee is scheduled to vote on the rescue package at 1:30 p.m. local time. In the committee, 16 members are from government parties while nine are in the opposition. The committee last month gave Urpilainen a mandate to take part in the bailout negotiations.

To contact the reporter on this story: Kati Pohjanpalo in Helsinki at kpohjanpalo@bloomberg.net

To contact the editor responsible for this story: Tasneem Brogger at tbrogger@bloomberg.net

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