By Tuomas Forsell


HELSINKI (Reuters) - A splinter group of nationalists who remained in Finland's ruling coalition after their party broke up called on Monday for big tax cuts for the middle class in a bid to improve their dismal standing in the polls.


In the latest reverse for Europe's far-right anti-establishment parties, the Finns party was kicked out of the government in June after it elected more radical anti-immigrant leaders. The party broke apart after some members rejected the leadership change and formed a New Alternative group to stay in the ruling coalition, saving it from collapse.


But voters were unimpressed. The latest polls show the splinter group - including five government ministers - with only 1 to 2 percent popular support. At the same time, the Finns' support in opposition has risen slightly to around 9 percent.


"We secured Finland's economic growth and tens of thousands of jobs. But not our own," Europe Minister Sampo Terho said at a meeting of New Alternative called to outline its political platform, referring to the latest polls.


New Alternative said it favored major tax cuts to benefit the middle class, and described its eurosceptic policy line "critical but constructive".

While Finns party leaders have recently said Finland would be better off outside the European Union, Terho said the more moderate New Alternative could only consider a referendum on EU membership after the 2019 election.

"Our immigration policy is realistic and without racism. The latter part differentiates us (from the Finns Party)", said Simon Elo, chairman of New Alternative.

Finland is recovering from a decade of stagnation. The government, now half-way through its four-year tenure, has sought to improve growth and curb public debt growth by cutting spending and reforming labor laws.


New Alternative said it had gathered about half the required 5,000 signatures needed to register as a new party called Blue Reform.

But Erkka Railo, a political scientist at the University of Turku, said the splinter group faces an uphill battle to model a platform that differentiates it from the Finns as well as the mainstream parties.

"The Finns Party is a protest movement ...It's almost impossible for a group that's in the government to present itself as an alternative to political elites," said Erkka Railo, another University of Turku political scientist.

"It also takes years for a party to build its political identity and brand. For the Finns, it took more than 10 years."

With New Alternative, the coalition, including Prime Minister Juha Sipila's Centre Party and the pro-EU National Coalition Party (NCP), has 105 of the parliament's 200 seats.

The Finns, earlier known as True Finns, became known for trying to block the sovereign bailouts that helped end the euro zone's debt crisis. But it angered many voters after joining the three-party coalition in 2015 and accepting compromises on austerity while backing another bailout for Greece.

At a congress in June, the Finns voted for European Parliament deputy and anti-immigration hardliner Jussi Halla-aho as its new chairman, and also replaced three deputy leaders, steering it towards a more far-right nationalism.

Sipila then ejected the Finns from the government, citing differences in core values and in immigration and EU policies.

(Reporting by Tuomas Forsell editing by Jussi Rosendahl and Mark Heinrich)