Finland’s Prime Minister Sanna Marin conceded defeat in elections on Sunday evening after being overtaken by two conservative opponents in a tight three-way race for control of parliament.
The centre-right National Coalition Party claimed victory with about 97.7 per cent of the votes counted, coming out on top at 20.7 per cent.
They were followed closely by right-wing populist party the Finns with 20.1 per cent, while the Social Democrats took 19.9 per cent.
No party is in position to form a government alone. More than 2,400 candidates from 22 parties were vying for the 200 seats in the Parliament.
“Based on this result, talks over forming a new government to Finland will be initiated under the leadership of the National Coalition Party,” said the party's leader Petteri Orpo, as he claimed victory surrounded by supporters.
"This was a great victory," the 53-year-old Mr Orpo said.
Mr Orpo has two main options for forging a coalition. One alternative is to work with Ms Marin’s party, and another to reach out to Riikka Purra’s Finns Party.
Ms Marin said "democracy has spoken" as she acknowledged defeat.
One of the world's youngest leaders at 37, she has received praise for her Cabinet’s handling of the Covid-19 pandemic and for her prominent role, along with President Sauli Niinisto, in advocating for Finland’s successful application to join Nato.
Her vocal support of Ukraine in the past year has increased her international visibility.
Ms Marin remains popular at home but her party’s views on the Finnish economy, which emerged as the main campaign theme, were being challenged by conservatives.
Mr Orpo had hammered on economic issues at campaign events.
Finns leader Ms Purra said the populist party would focus on shaping policies on migration, climate, crime and energy if it becomes a partner in the next government.
The Finns Party sees "Fixit" - an exit from the European Union - as a long-term goal and wants to postpone Finland's target of carbon neutrality for 2035.
After voting at Helsinki City Hall, university professor Mariana Seppanen said she thought Ms Marin’s positive reputation abroad exceeded the prime minister’s domestic popularity.
“I think usually the party that has been in charge and has the prime minister … loses the election, and the criticism has been very harsh,” Ms Seppanen said.
“But I think she [Ms Marin] has a lot of support anyway.”
While Russia’s invasion of Ukraine prompted Finland to seek Nato membership in May 2022, neither the historic decision to abandon the nation’s non-alignment policy nor the war have emerged as major campaign issues. Finland shares a long land border with Russia.
Apart from its economy, other issues the parties debated during the election campaign were the government’s increasing debt, climate change, education, immigration and social benefits.
”I know Sanna Marin is very popular and she has done great, and most Finns also think that she has done an amazing job with the coronavirus,” another voter, Evelina Makela, said in Helsinki.
“But maybe we have to look at the new crisis that we have. Some of us still believe that she does a very good job. Other people want something new, apparently."
Finland, which is expected to join Nato in the coming weeks, is an EU member with a population of 5.5 million.
