Brussels, 03/10/2014 (Agence Europe) - When the president-elect of the next European Commission, Jean-Claude Juncker, chose Finnish prime minister Jyrki Katainen to head his mammoth €300 billion investment plan, there were raised eyebrows among reporters attending the press conference where the announcement was made. Katainen's reputation preceded him to Brussels. The Financial Times calls him a fiscal hawk and he was harshly grilled by a number of highly critical MEPs at his hearing in July ahead of taking up the job of Economic and Monetary Affairs Commissioner.
He seems to be aware of his reputation, but people who know the man find the “fiscal hawk” description surprising. Henna Virkkunen, an ally in his political party, who has known him for 20 years, said: “I'm really surprised about all this discussions that are going on here, he's very interested in education and the welfare state”. She explains that domestically, he is not known for public spending cuts and, “when he was minister of finance, we still had good times in the Finnish economy. In that time we would invest more, investing in education, big university reforms”. Virkkunen says Katainen was above all a strong defender of the welfare state. Hence the need for strong public finances, according to a source.
Public spending tended to rise when he was finance minister, explains Olli Koski, chief economist at Finnish trade union SAK. His budget policy aimed to stimulate the economy, adds Koski, but he had to change tack when the crisis came.
In 2011, the Finnish general elections turned Eurosceptic party True Finns into the third biggest political force in the country. Katainen became the prime minister of a government that covered all the variations of the political chessboard, with the socialist party alongside True Finns. His policies then clearly incorporated a range of different values and priorities, explains Pekka Ristelä, director of the Permanent Representation of Finnish trade unions to the European Union. He adds: “During the years Katainen led the Finnish government, many kinds of policies were put in place, ranging from cutting expenses to raising some social benefits”.
A Finnish source describes him as a dove for Finland and a hawk for other countries. He was the head of the triple-A countries in the eurozone, where he had for many years recommended tight budget discipline along with structural reforms. In October 2011, he co-signed a letter to this effect with the Netherlands and Sweden and, the same year, he urged countries hit by speculation, such as Portugal, to make greater effort. He is a fierce opponent of the eurobond idea. Green/EFA MEP Sven Giegold criticised him in July for calling for guarantees on Finland's loans to Greece. Katainen defended himself by saying that he represented responsible policies, but several people have pointed out that this was a condition issued by the Finnish Socialist party for them to consider joining a government along with Katainen. “On the Greek collateral question, Katainen would never have asked for that on his own”, said Koski.
As for whether he's the right man to head Juncker's investment programme, Virkkunen certainly thinks so: “It's an area where he's strong, he's interested in the future, in jobs and growth”. His background should not cause him too many problems in his hearings at the EP because it is Moscovici who has been given the economic affairs job. Talking of Katainen, Giegold said: “He will do less harm” in his new job as vice-president of the Commission with responsibility for growth, investment, jobs and competitiveness. Giegold has become less critical since meeting the Finnish leader. He appreciates Katainen's openness to the Green group's ideas. He says that Katainen's written answers about the big investment programme show that he does not know where the €300 billion are going to come from. Those close to Katainen explain this by saying he has not yet been given a mandate. (EL)