Finnish eurosceptics gain local seats but lose momentum

HELSINKI (Reuters) - The anti-euro Finns Party won 12.8 percent of the vote in Finnish municipal polls on Sunday, according to early estimates, showing its popularity down from last year's national election but still strong enough to pressure the pro-Europe government.

Prime Minister Jyrki Katainen's conservative National Coalition party led with 21.4 percent of votes, followed by his coalition partners the Social Democrats with 20.2 percent, public broadcaster YLE estimated after more than half the votes were counted.

The Finns Party was fourth behind another opposition group, the traditionally agrarian Centre Party which got 19.0 percent.

Finland, having dutifully followed EU fiscal rules, is one of the few remaining countries in the euro zone to keep its triple-A credit rating.

The National Coalition has been pushing for fiscal reforms, including steps to improve efficiency in municipal spending, particularly in the sparsely populated countryside.

Opposition groups including the Centre and Finns Party have said such reforms could mean people in the countryside will be left with less, or more distant, access to basic services such as medical care.

Fears of such cuts have added to some voters' frustration over Finland's participation in EU rescue plans, with many feeling they are rewarding profligate countries while facing austerity at home.

Most Finnish voters and businesses however believe euro membership has provided stability and helped Finland emerge from the shadows of the former Soviet Union and neighbour Sweden.

The slim lead the top two parties had over the opposition groups means though they will likely continue to try to appease voter discontent, for example by taking a tougher stance on any future aid to indebted euro zone countries.

Finns Party leader Timo Soini's fiery anti-euro rhetoric struck a chord with voters unhappy with EU bailouts of indebted countries helping it secure 19 percent of the vote in national elections in April last year.

The rise of the Finns Party has forced the government to demand collateral on its contributions to rescue plans for Greece and Spain.

But Sunday's municipal election appears to show the Finns Party, tarnished by racist and homophobic remarks by some of its members, has lost some support, though the outcome was still an improvement from the 5 percent it won in 2008 local elections.

"We won 2.5 times more seats than we had before, so it is a clear victory," Soini told YLE, saying the party was still intent on changing Finnish politics and its role in aiding countries like Greece.

"The euro crisis has not disappeared. We will see more bad news before Christmas."

Ville Pernaa, researcher at Turku University's Centre for Parliamentary Studies, said the party appeared to have become more established, but had lost some its disruptive force.

"This result means they might permanently rise into a middle-sized or even big political power in Finland," he said. "But today they did not achieve the standing that would have mixed up the whole political scene like they did last year."

(Reporting by Ritsuko Ando and Jussi Rosendahl; Editing by Jon Hemming)