Eurosceptic Finns Party leader named foreign and EU affairs minister

(HELSINKI) - Finland's new Prime Minister Juha Sipila on Wednesday named eurosceptic Finns Party leader Timo Soini the country's new foreign and European affairs minister.

It is the first time the populist, far-right party will be in government, after placing second in Finland's April 19 general election.

Soini, who has been an outspoken critic of the European Union and especially of eurozone bailouts, was cautious in his first statements after the appointment.

"The (European) Union must be reformed. We need to improve it so that we can serve its citizens better. In the government however, we don't regard the amendment of treaties as an issue at this time," Soini said at a press conference alongside Sipila.

"Finland respects the common rules and expects other member states to do the same," Soini said.

"We will seek in a constructively critical and cooperative way to combine the national and joint European interest in Finland's EU policy," he added.

Soini's appointment came the same day the government of British Prime Minister David Cameron confirmed it will hold a referendum on whether Britain should leave the EU.

However, despite rising euroscepticism analysts have said they don't expect Finland's new government to rock the EU boat.

"As a third bailout package for Greece looms, will it be Finland that blocks it? Probably not," Nordea bank economist Jan von Gerich said last month about the prospect of Soini in government.

Sipila meanwhile appointed his predecessor Alexander Stubb, a committed pro-European, as finance minister, a move seen as balancing out the government's EU position.

The Finns Party was long known for its anti-immigration stance, which helped it gain a foothold among the electorate, but in recent years shifted the target of its attacks to Europe.

It came third in the 2011 election but chose to stay out of a left-right coalition as it was vehemently opposed to eurozone bailouts to Greece and Portugal.

"I think the Finnish cow's milk should stay in Finland and not be sent abroad as charity," Soini said at the time.

Sipila's three-party centre-right government, presented on Wednesday, consists of his own Centre Party, the Finns Party and the conservative National Coalition Party (NCP), which together hold 124 of 200 seats in parliament.

- 'Painful measures ahead' -

The negotiations between the three parties on a government programme have focused on liberal reforms to boost economic growth.

Finland's economy stagnated in 2014 after two years of recession, following the decline of its telecom and forestry industries.

The country's unemployment rate is meanwhile at its highest level in 12 years, at 9.6 percent.

"The situation in Finland is serious. This means we have big and painful measures ahead," said Sipila, a 53-year-old self-made IT millionaire and relative newcomer to politics.

His government plans to boost consumer and corporate confidence by slashing the budget deficit, which in 2014 for the first time exceeded the maximum three percent of gross domestic product allowed by eurozone regulations.

"Finland has been a strong advocate of responsible economic and financial policy at the EU level and we need to live as we preach," his new finance minister Stubb said.

He said most reforms would come early on in the new government's term.

"Direct spending cuts and revenue increases are front-loaded," he said.

"The government's tax policy will be geared to support growth, entrepreneurship and the tax burden of labour will fall. The government will also implement strong measures to improve the functioning of the labour market," he added.

Parliament will formally elect Sipila as prime minister on Thursday, and his new government will be formally appointed by the president on Friday.