The most interesting aspects of the quadrilateral - what phenomena to follow?
Autumn is here in earnest as the final months of an eventful 2022 kick off. What is happening in the world? What to keep track of? Blic's experts list what they themselves plan to monitor at work and in their free time and share nine tips for the last quarter of the year. If you want to exchange ideas, we are available.
Final stretch of election preparations
The parliamentary elections are just around the corner – the elections are almost six months away at the time of writing. We are constantly following the parties' preparations for elections, the nomination of candidates and the formation of the objectives of the Government Programme and, of course, the development of the general political situation, public debate and the positions between the parties. In the last quarter of the year, it is often possible to do the first finger exercises on possible government bases and even ministers, and to assess what kind of policies different government bases might make on certain issues.
Almost without exception, there has been a theme at the government programme negotiating tables, for which each party has prepared its own solution. In 2015, cut lists were compared, while in 2019, alternative models for organizing social security were presented. If the old signs are correct, each party will also have a solution ready at the spring 2023 negotiating tables for a problem or need for change that is plaguing society. A separate chapter is the public debate – on whose shoulders will the difficult economic situation and energy shortages fall? Who succeeds, who fails?
We will follow with interest which themes will begin to emerge during the final months of the year, when the election programmes and preparatory work will be finalised.
Finland joins NATO
Following Russia's war of aggression against Ukraine, Finland's application for NATO membership and the processing process have progressed rapidly. NATO membership has significant social impacts that affect almost every Finn; Finland is finally becoming a full member of those discussions in which it is possible to influence not only the security of our own region, but also the transatlantic future. Membership opens up new opportunities for Finnish companies, as NATO acquisitions are fully opened up to Finland as well. All in all, membership will strengthen Finland in the future in many ways.
We will follow with interest how the processing will proceed in the coming months and what kind of member state Finland will become in the future. In particular, the intentions of Turkey and Hungary complicate the process, as ratification of the application is not yet entirely clear for two countries. In addition, the question remains whether the parties will address the theme in their election platforms and what the next government programme will look like when Finland's NATO membership determines the country's foreign and security policy for the first time.
Economic slide
Above all, the economy is characterised by uncertainty about the future. Inflation is galloping, purchasing power is weakening, and the prolonged period of zero interest rates has been replaced by rapid interest rate hikes and uncertainty about the future direction. Soaring inflation is plaguing the euro area, and the ECB's message so far has been that interest rate hikes will continue to be advanced, despite signals in favour of both rate hikes and reductions, and the first signs of recession are visible. The markets have occasionally estimated that the 12-month Euribor could rise to well over three per cent already at the beginning of the year. On the other hand, there have also been daily declines, and the market is not infallible.
At the same time, rising interest rates and accelerating inflation hitting the prices of all commodities will increasingly discipline households in the coming months. Consumer confidence is already at a record low and the economy is characterised by waiting and uncertainty. The economic outlook is expected to deteriorate further in the near future. Rising interest rates also slow down business investment. So far, industrial order backlogs have held up, but as the outlook darkens, they will inevitably weaken as well. The decline in industrial order books will soon be reflected in industrial jobs and then in employment and society more broadly.
The economy is developing in a worrying way in a direction that accelerates inequality. In an election year, the development of inequality also affects the debate before elections and even the decisions made at the ballot box. When the economy stalls, we talk not only about the big picture of the economy and the measures that need to be taken, but also about issues on a very personal level. Will any party succeed in turning this in its favour, will someone stumble in understanding the hierarchy of voters' needs?
Deepening energy crisis
Even before the NordStream leaks, the energy situation in Europe looked complicated. The energy crisis is becoming a reality now that the coldest and darkest months of the year are approaching. National and EU-level measures aim to solve the acute situation and ensure sufficient energy supply. Crisis response has occasionally deviated from the prevailing values and policy. Continuous fluctuations in policy lines weaken the predictability of the operating environment. That is why it is essential in energy policy to be able to look beyond an acute crisis situation and to weigh different solutions and their effects also in the longer term.
Energy policy is defined by changing values. In recent years, the focus has been on environmental issues, but now, in an acute crisis and beyond, the trilemma of energy policy – availability, price and environmental issues – is seeking a new position. The values used in energy policy today will have a major impact on Finnish industry, energy companies and citizens. We will closely monitor the position of the pieces of energy policy in the acute crisis and beyond. And what does the crisis teach us, for example, in terms of policies or energy saving? For example, will the crisis push forward various innovations and investments?
Will Ukraine see a turning point?
Russia's response to the deterioration of the war situation will be one of the most crucial issues in the coming months. The development of the situation is widely reflected globally. At the time of writing, Ukraine's advance in the fighting looks very strong, and Russia's internal discontent and civil movements have increased radically with the partial mobilization.
Nothing definite can ever be said about the course of the war. In authoritarian states, however, everything often boils down to the leader and the preservation of his face. Putin can hardly continue in power without a victory that now seems unlikely. There seem to be two possible directions: regime change in Russia and withdrawal from Ukraine, or making desperate and even surprising decisions driven into a corner. The latter scenario is likely to mean further escalation.
Our sympathies are strongly with Ukraine and with the Ukrainians. Every day of bloody war of aggression and human suffering is too much.
Final spurt in the preparation of wellbeing services counties
The years-long discussion of the health and social services reform finally came to an end when the decision to establish wellbeing services counties was made in 2021. We are facing a new situation when the entire responsibility for organising healthcare, social welfare and rescue services will be transferred to the wellbeing services counties at the very beginning of next year. The ad hoc preparatory bodies will have their hands full with only a few months left before the regions are launched.
However, many things are still at a stage. The historic change in the organisation of health and social services in Finland will have a significant impact on the operations and finances of municipalities. It will be interesting to see where the concentration of municipalities will turn when responsibility for organising health and social services disappears and resources are left for other things. In the reform, concerns about the funding of wellbeing services counties may lead to mergers of small areas and service cuts as the need for services increases and expenditure is high. From the point of view of the reform, it would also be important to solve the shortage of personnel in the sector. Over the next year, it will be interesting to see how municipalities cope with their changed role. In addition, we will continue to monitor how the transfer of employees transferred from municipalities and joint municipal authorities and the integration of numerous information systems will be handled in the new wellbeing services counties.
Election victory of right-wing populists in Italy
The unstable political situation and premature changes of government are not unusual phenomena in Italian politics. This was also seen this year, when former Prime Minister Mario Draghi announced his resignation in July and elections scheduled for next year were postponed until the end of September. As a result of the elections, Giorgia Meloni's Fratelli d'Italia party, together with Silvio Berlusconi's Forza Italia and Matteo Salvini's Lega, now run the country with its far-right coalition. Italy's most right-wing government since Mussolini comes to power. Meloni, the new prime minister known for her national conservatism, is the first elected prime minister in ten years.
The election result will be significantly visible, especially in Italy, but also in Europe. With inflation rising and interest rates rising, it will be interesting to see how the Italian economy can be managed. Another big question for the EU is how the new right-wing coalition will conduct its foreign policy. The war in Ukraine takes on a new dimension in the eyes of the EU when the question arises of Italy's possibly changed attitude towards Ukraine and Russia.
The party's election victory would still have been incredible in the last elections, with only four percent support for the party at the time. The rise in support for the extreme right and populists in different countries indicates that populism is once again rearing its head in European politics. No wonder, because a world in crisis leaves room for populists who seek to exploit citizens' social and economic concerns in their rhetoric.
Midterm elections for the United States Congress
November 8 is a day that will largely determine U.S. politics as the country holds midterm elections for the Legislative Congress. Voters will decide which party will control Congress in the final half of President Joe Biden's term. The outcome of the election will largely determine Biden's chances as well as the direction of U.S. politics in general.
The elections will also have significance for the presidential elections in two years' time. Support for incumbent President Joe Biden has fallen alarmingly and public trust in him is exceptionally low. Former President Donald Trump has campaigned actively across the country in the run-up to the midterm elections, and his bid for leadership seems highly likely, overshadowing the incumbent president. If Democrats win Congress, Biden has a chance to advance his own liberal policies. If, on the other hand, Republicans take Congress, it will greatly complicate the Biden administration's ability to function for the rest of its term when Republican hopes of blocking Biden's agenda would come true.
Political decision-making in the midst of crises
Unexpected and large-scale crises have cast a shadow over the political environment in recent years. They have revealed the vulnerability of societies, but also the importance of cooperation and flexible decision-making both nationally and globally. Although the initial crisis of the coronavirus has been somewhat overcome, Europe is now shaken by the war in Ukraine, the energy crisis, escalating inflation and rising interest rates, again putting a lot of things to solve for our government. In a crisis, the importance of national and international unity is also a sign of resilience.
Rapidly changing circumstances require quick reactions and prioritisation. Decision-making can become paralyzed, but on the other hand, pressure to make decisions can also promote them. It will be interesting to see how, in the midst of crises, there is room for debates other than those that have to be held. The final stretch of the government term and the looming parliamentary elections will set a new level for the phenomenon, as the parties' election campaigning will begin in earnest over the next few months.