Finland's Social Democratic Prime Minister, Mr Paavo Lipponen, looked poised to stay in power after staging a dramatic comeback in yesterday's general elections.
Final returns from over 3,000 polling stations showed the SDP battered but not defeated as it remained the biggest party in the 200-seat parliament with 51 seats compared with 63 in the 1995 elections.
Early results put the opposition Centre Party ahead with 56 seats to 50 for the SDP, but after initial euphoria it conceded Mr Lipponen's five-party government was likely to carry on.
The final result gave it 48 seats, four more than in the 1995 elections.
With strong gains by the SDP's main allies, the Conservatives of Finance Minister Mr Sauli Niinisto, both parties looked poised to lead Finland when it assumes the rotating presidency of the European Union in the second half of 1999.
"It seems like we will have the same as before," a senior EU diplomat in Helsinki said. "The European policy will remain the same."
The SDP won 22.9 per cent of the vote, the Centre 22.4 per cent, and the Conservatives got 21 per cent. Ex-communist Leftist Alliance, part of Lipponen's "rainbow" coalition, got 10.9 per cent and another ally, the Greens got 7.3 per cent.
Mr Lipponen, who looked grief-stricken when it appeared the SDP was falling into an abyss, said he was ready to stay on.
"I'm prepared to continue," he told reporters. "Of course the Social Democrats will also discuss this as it is now too early to talk about individuals."
Pre-election surveys showed the SDP, which got 28 per cent in 1995 elections, falling out of favour with left-leaning Finns after pursuing tough economic reforms that paved the way for Finland's membership in of Europe's single currency.
Commentators have said a government led by the rural-based Centre Party could take a more sceptical line than the current team on European integration after opposing adopting the single European currency.
Mr Lipponen and Mr Niinisto saw membership in the economic and monetary union as a guarantee of Finland's place in the EU mainstream after decades spent as buffer between the West and the Soviet Union.
Financial markets had turned a blind eye to the elections as differences between main parties were small and the tight corset of the single currency limited space for policy shifts.
Commentators saw a period of intense horse-trading between the two parties in the next few weeks, with the Conservatives likely to push for more cabinet seats following their best ever result, but no major changes in economic policies are likely even though the Conservatives and the SDP seem at odds over taxation and labour market flexibility.
"We are likely to see a continuation of the previous government, perhaps even a shift to the right with the strong showing of the Conservatives," said Mr Juha Ahtola, chief economist at Merita Bank.
The Conservatives can add 46 seats to SDP's 51 so the two parties will need support from at least one smaller party to command a majority.