June 14 (Bloomberg) -- Alexander Stubb, picked by his party today to become Finland’s next prime minister, has little time to celebrate the victory as the Nordic nation faces its deepest economic rut since the early 1990s.
The Europe minister won the National Coalition Party chairmanship vote, backed by 500 votes against 349 for Paula Risikko, 54, in the second round of voting at a party conference in the southern town of Lahti. He will succeed Jyrki Katainen, 42, who will step down on June 16 after leading the party for 10 years to become commissioner in the European Union.
“Our nation, this country, needs only two things at the moment,” Stubb, 46, said after the vote. “The first is political stability and the other is predictable economic policy. We are committed to both.”
Finland’s economic pain is largely a result of faltering export cornerstones in the technology and paper industries as austerity policies and Europe’s crisis have crippled demand. Finnish public debt has ballooned by 47 billion euros ($64 billion) net since 2008, to a total of 110 billion euros.
Stubb will need to work with a new finance minister, former union boss Antti Rinne, who has spoken out in favor of more stimulus to rescue growth. Rinne, 51, assumed the job last week after winning chairmanship of the Social Democrats, the second-biggest of five parties in Finland’s ruling coalition.
Katainen’s cabinet, in power since 2011, has agreed on austerity measures totaling 6.8 billion euros by 2017, equal to about 3 percent of gross domestic product, to shield Finland’s AAA rating. Its latest budget package, put together in March, prompted the Left Alliance to quit the six-party alliance. Members of the Green League have also called on the party to leave the government over an expansion into nuclear energy.
Finland’s central bank said this week that the economic stagnation will be prolonged through this year as exports fail to recover. GDP grew an annual 1.2 percent in April, after a revised 1.1 percent contraction in March, Statistics Finland said yesterday.
Stubb said at a press conference today that it’s important that the new government stick to the agreed on framework and that we must “implement these decisions in the coming months.”
“We must find ways to increase employment and spur growth,” he said to reporters after the vote. “The key is getting our economy competitive again.”
Stubb will be Finland’s first Helsinki-born prime minister in 86 years and the first minority Swedish speaker to lead the country since the 1950s. Economy Minister Jan Vapaavuori, 49, was eliminated in the first round of voting today.
Cai-Goeran Alexander Stubb was Finland’s foreign minister for three years to 2011, and has been minister for European affairs and foreign trade in the current coalition. Stubb received a doctorate in international politics at the London School of Economics in 1999. He’s worked as an assistant to then-European Commission President Romano Prodi from 2001 until 2003, before his election to the European Parliament in 2004.
Stubb holds a bachelor’s degree in politics from Furman University in South Carolina and a master’s degree in politics from the College of Europe in Bruges, Belgium.
He’s married to a lawyer, Suzanne Innes-Stubb, and has a son and a daughter.
Stubb’s passion for sports, including triathlon and golf, comes from his father Goeran, who worked as a sports reporter, ice hockey team leader and talent scout for the National Hockey League.
Katainen said in an interview with state-owned broadcaster today that his aspirations for any leadership roles in the EU would come “in the long run” and that he is now focused on becoming Finland’s commissioner “with an interesting portfolio.”
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