Jyrki Katainen: Europe’s financial growth wizard

EPA/MAURIZIO BRAMBATTI

Vice-president of European Commission Jyrki Katainen.

Jyrki Katainen: Europe’s financial growth wizard


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Jyrki Katainen, ‘Europe’s financial growth wizard’, former Prime Minister of Finland, is one of Europe’s top political and fiscal minds in a time in which pro-growth strategies are needed to fully propel Europe out of the turmoil starting in 2007. Yet who is Jyrki Katainen? Who is the individual that ascended to the office of Prime Minister of Finland at the age of 40? And what does he have coming for an encore?

 

Early life and career 

Katainen was born in a small town in Finland called Siilinjärvi in 1971.

He graduated from Siilinjärvi Senior High School in 1990. He obtained a Master’s degree in political science from the University of Tampere. Beyond his political accomplishments, Katainen is also known to be an accomplished chef. His cooking specialty? Wild game. 

After Katainen began to make a name for himself in Finnish politics as a member of Parliament as a member of Finland’s center-right party, elected to the seat in Northern Savonia in 1999. He was vice-president of the EPP’s youth organisation, YEPP, from 1998-2000. Katainen ascended to the leadership of the National Coalition Party for Finland in 2004 and also became a Vice President for the European People’s Party in 2006.

Tomi Huhtanen, the Executive Director of the Wilfried Martens Centre for European Studies, the political foundation of the EPP, reflects on Katainen’s time as party chairman:

tPkJHTOj“As a party Chair, Jyrki Katainen got into his lap a beaten National coalition political party, without a perspective to enter into the government in the near future. At age of 32 he turned the party around and later brought home 10 consequent electoral victories. While doing that he basically changed the political culture of the country with his modern leadership style and outstanding public speaking skills.”

Katainen ultimately rose to the rank of Deputy Prime Minister, holding the post of Finance Minister in Finland (19 April 2007 – 22 June 2011), where he was named the best finance minister in the Eurozone by the Financial Times. As finance minister Katainen cited imbalance in Finland’s welfare system, and called for reform, describing how:

The existing welfare state was designed for a very different Finland from the one that is emerging now. A quarter of a century ago there were approximately 100 taxpayers for every 50 non-taxpaying residents, he said; by 2025, the ratio will be 100 to 70

Katainen’s message resounded with Finnish voters, who quickly put him in office as Prime Minister as the leader of a tenuous 6 party coalition tasked with pulling Finland back from budget issues and the decline of its flagship telecommunications company, Nokia.

 

Time as Prime Minister  (22 June 2011 – 24 June 2014)

Whether it was a six party coalition, or his professed philosophy of “liberty, equality of opportunities, education, encouragement, tolerance and caring,” Katainen proved to be a savvy Prime Minister. His reforms, which though not inspiring in the eye of the public, helped to coax confidence back into the economy and investors to allow for growth to be sustainable when it did return.

While Katainen was brutal about cutting Finland’s public debt, he remained pragmatic in regards to the debt issues in Europe’s southern countries, citing his belief that bailouts for Greece or Spain would stabilize the Eurozone and ultimately be beneficial for the whole, saying:

Nobody likes bailout packages but so far we have been looking at what is good for the stability of the eurozone

Katainen’s practicality served him well in office, and he was able maintain the fragile coalition government in place in Finland as well as cultivate a new technology industry in Finland, as Nokia was partially sold to Microsoft. Katainen also faced a dwindling forestry industry – equally important to the Finnish economy as the tech industry – which was transferring paper and pulp production to Asia and Latin America.

epa02033355 French Minister for Economy, Finance and Employment Christine Lagarde (L) chats with Finnish Finance Minister Jyrki Katainen as they attend a European Union (EU) Finance Ministers meeting in Brussels, Belgium, 15 February 2010. The bloc's finance ministers held a meeting to decide how to help help Greece to overcome its debt crisis. EPA/OLIVIER HOSLET

Yet his economic policies and the gains made were crucial, and saved Katainen from what would have been an otherwise unpopular and politically suicidal decision to refuse to buy Nokia’s shares when the company was trending down and taking the entire Finnish economy with it.

These decisions show the style of Katainen, and how he defies his stereotypes. Young political leaders who rise to high office oftentimes are portrayed as charismatic, energetic, and optimistic. And while Jyrki Katainen’s charisma and energy are unquestionable, the lasting impression he leaves resembles none of those things. Katainen weathered his three years as PM with the steadiness and competence of an elder statesmen with years of experience. He was more interested in the tax code than media headlines, and as a result he got the results he wanted. To go along with this he chose to resign in order to pursue a position at the European Commission, perhaps even the Commission presidency…

 

European Commission President?

Jyrki Katainen at Bocconi UniversityThough the ultimate battle in the EPP came down to Jean-Claude Juncker vs Michel Barnier, which Juncker ultimately won in March of 2014 with EPP members voting 382-245, Katainen’s name had long been in the running. Katainen figured as a good compromise candidate for the Commission presidency. His strong conservative record, lack of histrionics, and origin from a relatively low profile EU member state made him an ideal candidate to Germany and other major EU players.

As Olli Rehn stepped down to take a seat in the European Parliament, Katainen resigned to fill his seat until the new Commission (that he would be a critical part of) was being formed. He was nominated and confirmed as Commissioner for Economic and Monetary Affairs. Katainen’s confirmation hearing was not uneventful. Despite disruption by Kurdish protestors, the former Finnish PM was confirmed as Europe’s top financial mind, a position that he was more than suited for given his track record in Finland.

The overarching story on the rise of Katainen to the Commission at such a young age, is how in demand Nordic leaders are and have been in recent years. At the time of his nomination, former Norwegian PM Jens Stoltenberg ascended to the head of NATO, and Danish PM Hell Thorning-Schmidt was also being mentioned as having a strong chance to become head of the Commission prior to Juncker’s election. The characteristics of these countries seem to have proven attractive to European leaders and citizens.

 

Vice-President Katainen in #teamJuncker

After the EU election results came in, the Juncker Commission started to take shape. Katainen was made a Vice-President of the European Commission in charge of Jobs, Growth, Investment, and Competitiveness.

Since becoming Vice-President, Katainen has attempted to boost growth in the EU by promoting the Commission’s 315 billion Euro investment scheme, highly touted by EU Prime Ministers. As part of his role, Katainen has had to convince private investors that they should jump aboard this plan and contribute their own capital. Within 10 months Katainen travelled to all the European Union member states to promote the Investment Plan for EU.

 

EPP Youth nominee for Vice President

In October 2015, during the EPP Congress in Madrid, Katainen was one of the 10 EPP candidates for Vice-President that were successful. Though 12 candidates ultimately ran for the positions, circa 20 candidacies were considered, and ultimately some candidates withdrew before the deadline.

 


Katainen’s candidacy was special,he was nominated by the Kokoomus party in Finland, but he was also the only candidate not to be nominated just by his national party. Rather, Katainen was nominated by the youth organisation of the EPP party (YEPP), of which he has also served as a Vice-President (1998-2000).

Konstantinos Kyranakis, President of the YEPP, says Katainen’s roots were not the only reason for his nomination:

ec46de6a53157066a0f79cf76bd22940“Jyrki has never forgotten his past in Youth EPP as Vice President in 1999. But this is not the only reason we nominated him for the presidency of the EPP. He is a man who always remained simple and open. He is one of the very few politicians I have met who actually listens when you’re talking to him and you know he will do something about it.”

At the EPP Congress in Madrid, Katainen talked about the midterm review of the 2020 investment strategy,  and about trying to encourage the notion of circular economy and creating stronger internal markets in Europe. Katainen said that a plan on circular economy would be presented by the Commission by the end of 2015.

Katainen is one of the few politicians that comes from Europe’s past, is active in its present, and is likely to grow into a greater role in the future.

Photos: EPA

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