On This Day

Matti Vanhanen

Prime Minister of Finland from 2003 to 2010 (born 1955)

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Matti Taneli Vanhanen (born 4 November 1955) is a Finnish politician who served as Prime Minister of Finland from 2003 to 2010 and then as the Speaker of Parliament from 2022 to 2023. He was also Chairman of the Centre Party from 2006 until 2010 and the party's presidential candidate in 2006 and 2018. Outside of that, he has served under multiple ministerial positions throughout his 27 years as a member of the Finnish parliament, with those being Finance Minister, Deputy Prime Minister and Defence Minister.

In his earlier career, he was a journalist. Vanhanen is the son of professor Tatu Vanhanen and Anni Tiihonen.

Vanhanen studied political science at the University of Helsinki, graduating as a Master of Social Sciences in 1989.

He was chairman of the Centre Party Youth League from 1980 to 1983. He also served as a member of the Espoo City Council from 1981 to 1984. Vanhanen used to work as a journalist. He was an editor (1985–1988) and editor-in-chief (1988–1991) at the local newspaper Kehäsanomat. In a column in Suomenmaa (the Centre Party's organ), he strongly condemned the Baltic Star pro-Estonian independence demonstration held in Helsinki in July 1985, calling the demonstration "provocative".

Vanhanen was elected to the Finnish Parliament (Eduskunta) in 1991. As a member of Parliament, he was interested in ecological issues. For instance, Vanhanen spoke against the building of a fifth nuclear power plant in 1992, at the same time as serving on the board of electricity corporation Fortum. He served on the Parliamentary Environment Committee 1991–1995 and was chair of the Parliamentary Grand Committee 2000–2001. He was vice-chair of the Centre Party Parliamentary group 1994–2001 and Deputy Chairman of the Centre Party 2000–2003.

Another important topic for Vanhanen was Finland's foreign and security policy. As a specialist on the European Union, he was a member of the European Union Constitutional Convention. There, he criticised the president of the convention, former French president Valéry Giscard d'Estaing, as authoritarian. Vanhanen has said that he is unenthusiastic about European co-operation, and that he is an "EU pragmatist", so he may be considered a eurosceptic, especially when compared to his EU-enthusiast predecessor Paavo Lipponen.

Vanhanen served as Chairman of the Youth Foundation from 1998 to 2003 and deputy chairman from 1981 to 1997. The prosecution claims the Youth Foundation donated, under the direction of Centre Party MP Antti Kaikkonen, funding of over 90,000 euros for his own campaign and that of other Centre Party MPs, including Matti Vanhanen. Prosecutors say this contravened the Foundation's own rules and laws governing such institutions.

Vanhanen resigned from the Constitutional Convention in 2003 when he became Minister of Defence in the cabinet of Prime Minister Anneli Jäätteenmäki. After Jäätteenmäki's resignation, Vanhanen was elected Prime Minister and his first cabinet was formed.

As a politician, Vanhanen is considered to be part of the liberal wing of the old agrarian Central Party, along with the two other Party ministers from Uusimaa region. His government cut the top state income tax rate from 35.5% to 33.5% in 2005 and 32.5% in 2006 (resulting in approximately a 55% total tax rate after local government and social security taxes). The corporate tax rate was also lowered to 26% and capital gains to 28% (both formerly 29%), though at the same time, dividends were partially made taxable.

As the Centre Party candidate, Vanhanen challenged President Tarja Halonen in the 2006 Finnish presidential election. He received 18.6% of the vote, coming third to the National Coalition Party's Sauli Niinistö (24.1%) and the Social Democrat and incumbent Tarja Halonen (46.3%), and thus did not qualify for the runoff. Vanhanen expressed his support for Niinistö in the runoff election against his coalition partner's candidate, Halonen.

The presidential election and co-operation between the Centre Party and the National Coalition Party proved to be a major strain on the government coalition between the Centre Party and the Social Democrats. The flashpoint came in March, when the Centre Party demanded national agricultural subsidies to cover farmers' losses when the Finnish exception in the European Union's Common Agricultural Policy was about to expire. At the end of the crisis, Vanhanen told his parliamentary group that taxpayers would cover ninety per cent or about 100 million euros, in losses.

Matti Vanhanen received 25,000 euros for his presidential election campaign in 2006 from Ahti Vilppula via his company Helsingin Mekaanikkotalo. Mekaanikkotalo is owned by Procomex in Luxembourg and further by Kilbrin Investments Limited in the Virgin Islands. In 2009, it was found out that this finance was not included in the finance announcement.

After the March 2007 election, the Centre Party narrowly remained the largest party after losing four seats. However, their coalition partner, the SDP, lost eight seats and the centre-right National Coalition Party gained ten. Vanhanen's second cabinet was formed on a centre-right basis, with minor partners the Green League and the Swedish People's Party.

A scandal involving Vanhanen's second cabinet began rolling in May 2008, after the leader of the Centre Party's parliamentary group, Timo Kalli, said publicly that he would not reveal information about his campaign finances, because such disclosure was not required. After a media backlash, Kalli gave up his secrecy and listed a group of businessmen known as "Kehittyvien maakuntien Suomi" (KMS; in English, "The Finland of Developing Regions"), who had financed the Centre Party. Centre Party links with KMS were suspected, as one address of the organisation belonged to a party official. It was later revealed that the organisation had been formed in the Centre Party's general secretary's office.

After the Russian response to the Georgian invasion of South Ossetia, Vanhanen said that Finland would rethink its security.

Vanhanen's cabinet proposed raising the retirement age from 63 to 65 years. His proposal was fiercely opposed by the Central Organisation of Finnish Trade Unions (Finnish acronym SAK), which is affiliated with the SDP.

In December 2009, Vanhanen announced that he would step down as chair of the Centre Party at its June 2010 convention. Mari Kiviniemi was chosen for the position, and she also inherited the position as prime minister. In September 2010, Vanhanen started as the head of the Family Business Network Finland and left the parliament.

In 2010, the Finnish police investigated whether Vanhanen had been wrong not to disqualify himself in certain cabinet decisions on financial contributions to an organisation affiliated with the Centre Party, which had previously financed Vanhanen's presidential campaign. Because the charges concerned Vanhanen's actions while in office, the decision whether he should be prosecuted fell to the Constitutional Law Committee of the Finnish Parliament. The Committee decided not to prosecute Vanhanen.

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