The trouble in the government comes at a time when Finland is getting ready to celebrate its 100th anniversary of Independence.

Finnish Prime Minister Juha Sipila is set to resign on Tuesday as the Finns Party, one of the three partners in the ruling coalition that came to power in 2015, has elected a new chairman who is perceived as extremely right wing.

As Finland is a stranger to interim elections, Mr. Sipila, leader of the liberal Centre Party, may return to power with support from the Swedish People's Party and the Christian Democrats, which are currently in the Opposition, senior officials in Helsinki said.

Jussi Halla-aho, the new leader of the Finns Party, is a Member of the European Parliament, but wants the country to be taken out of the European Union, the officials said. His views on migrants and women are "horrendous", they added. He has been convicted of hate speech.

Right-wing populism

The nationalist party will now take the path of radical right-wing populism. But without its support, the ruling coalition will be reduced to 86 in the 200-member Eduskunta, the Finnish Parliament. With the support of the two Opposition parties, Mr. Siplia will have the support of 101 MPs, a margin of just one.

The officials said the Finnish economy had shown sign of recovery after a lost decade since the global economic crisis. The latest growth rate hovered around 1%, with an analyst predicting 3% in the coming year. But unemployment rate remained uncomfortably high at 9%.

The trouble in the government comes at a time when Finland is getting ready to celebrate its 100th anniversary of Independence.