Finnish conservatives gather to choose next PM

HELSINKI (Reuters) - Finland's conservative party will pick the country's NEXT (NXT.LO)prime minister this weekend when it selects a new leader to replace current prime minister and party head Jyrki Katainen, who steps down to seek a high-level EU job.

The new prime minister, to be picked from three hopefuls, will take over a country which has seen its economy contract for two years in a row, and may shrink again this year as economic indicators show wide-spread weakness.

Polls show the candidates, who have different approaches on the economy, with some favouring reforms others more stimulus, in a dead heat. About 900 local leaders and more senior members of the National Coalition party will vote.

"The situation has become increasingly close," the editorial of daily Aamulehti, which until the 1990's supported the party openly, said on Thursday, calling the race a three-way tie.

The hopefuls are all ministers in the current five-party government - Alexander Stubb is the minister for foreign trade and EU affairs, Jan Vapaavuori for economy and Paula Risikko for health and social services.

Throughout the campaign candidates have sought to portray party unity and assure voters that while there are differences in personalities, all three would continue Katainen's policies.

Stubb, 46, got a boost from the European Parliament election last month, where he received almost twice as many votes as the next-most popular candidate of any party.

Despite his popularity, especially with young voters, some members say he has little substance behind the flashy facade.

Vapaavuori, 49, is seen as a straight talker and tough negotiator, whose strength is a comprehensive knowledge of the economy, but people from rural areas view him with suspicion because they feel overlooked by him.

Risikko, 54, the only woman of the three, appeals to women, social conservatives and those advocating a larger role for the state. She would be the first woman to lead the party and the third female prime minister in the Nordic country.

"The campaign has been an excellent branding event for the party, they get nothing but good publicity out of this," University of Turku researcher Mari K. Niemi said. "The race doesn't appear nasty at all and the candidates are nice to each other."

But with the economic tailspin intensifying, cracks have started to appear. Risikko is most open to offering additional short-term stimulus measures, as the new finance minister, social democrat Antti Rinne has demanded.

Vapaavuori has stressed that Finland has to curb public deficits while Stubb seeks to cut spending more radically.

Another division emerges in security policy.

Risikko says now is not the right time to discuss NATO membership. Vapaavuori says he supports joining the defence alliance, but would not push it as public support remains low - only about one-fifth of Finns want to see the country join.

Stubb wants to actively push Finland to join NATO, arguing that the public would follow politicians and change their mind.

With the vote likely to go to a second round - the winner has to get more than half the votes to become party chair - getting most votes in the first round might not be enough.

"The winner is not necessarily the one with the most support," Aamulehti said. "It could be the one with least opposition."

(Reporting by Sakari Suoninen and Jussi Rosendahl; Editing by Alexandra Hudson)