CONSERVATIVE GAINS MAY SPEED FINNISH MARKET REFORM
Conservative gains in Finnish general
elections could speed liberalisation of financial markets,
though there will not be a radical economic restructuring,
conservative officials and economic analysts said.
    The conservatives gained nine new seats in parliament after
the two-day elections, which ended yesterday, and political
commentators say social democrat Prime Minister Kalevi Sorsa is
likely to be replaced by a centre-right coalition.
    International spokesman Pasi Natri told Reuters: "we are
willing to liberalise the economy as much as possible."
    Helsinki analysts said the outgoing centre-left coalition
had introduced major reforms of money and stock markets in its
period of government between 1983 and 1987.
    They said Finnish conservatives bore little resemblance to
other European conservative movements and had, for example,
shelved privatisation policies to increase their popularity.
    Finnish trade affairs are dominated by its special ties
with its neighbour, The Soviet Union, and a new centre-right
coalition could alter this relationship, the analysts said.
   The two countries have a long-term pact under which trade
must be balanced in value. The 1987 accord signed in January
agreed bilateral trade totalling about 30 billion markka.
    Finland exports finished products to the USSR, with crude
oil accounting for 80 pct of imports.
    The Centre Party said before the elections that Fenno-
Soviet trade would have to be cut because Finland had to trim
exports when the value of Moscow's oil exports to Finland fell.
    Finnish financial markets reacted cautiously to the
election news, with little movement in the markka or on the
Helsinki stock exchange.
    Securities analysts said the market would respond positively
if a centre-right coalition was formed, but added it was too
early to exclude the possibility that social democrats would
hang on to power.
    The spokesman said conservatives favoured legislation
governing the stock market to prevent "casino-style behaviour."
    He said the conservatives also favoured the establishment
of an internal market between the Nordic countries.
     International capital markets were becoming more and more
important, he  said, adding conservatives would speed up the
development of Finland's capial markets.
   He said the conservatives supported the bilateral trade ties
with Moscow, but that links with western Europe should be
studied. Finland is a member of the European Free Trade
Association ( EFTA).
    Negotiations between the major Finnish political parties
are likely to be protracted, and the shape of the new
government will probably not be established before the start of
April.
    Conservatives hold 44 seats now, The Centre Party gained
three to 40 and the social democrats lost one, and now hold 56
seats.
 REUTER
