Helsinki shrugs off election setback

HELSINKI (AP) - Finnish voters expressed displeasure with government welfare cutbacks and new taxes in municipal elections, but the ruling coalition said yesterday that it would continue its policies.

The elections on Sunday were the first since the four-party national government of the Prime Minister, Esko Aho, began cutting pensions, unemployment payments and other welfare benefits. Opposition parties made gains and government parties lost 5.8 per cent of their support, compared with the 1988 municipal elections.

The elections came three days after the latest round of government spending cuts and tax rises. The austerity packages have been aimed at improving national finances during a recession marked by increasing bankruptcies and record unemployment of 13.6 per cent, one of the highest in Western Europe.

'Even before the elections we clearly stated that the direction of government policy will not be decided at these elections,' Mr Aho said yesterday. 'The elections do not affect the balance of power in the Parliament, so I see no need for a change.' His coalition commands a majority with 114 seats in the 200-member legislature.

The results showed that Mr Aho's Centre Party, with 19.2 per cent of votes, had lost 6 per cent of the support it received in the parliamentary elections 18 months ago, and was down 2 per cent on the last municipal elections.

'The result of these elections means that there should be a change in government policy,' said Ulf Sundqvist, chairman of the opposition Social Democratic Party. It won 27 per cent of the votes in Sunday's elections, the highest of any party.