The "Big three" of Finnish politics are the SDP, the centre-right Centre Party and the liberal conservative National Coalition Party. The CP and the NC currently form a coalition government with the Green League and the Swedish People's Party.
Unlike its Swedish counterpart, which has been the most dominant party of government in modern Swedish political history, the Finnish SDP has generally commanded 20%-28% of the votes in the parliamentary elections since the end of World War II. Like many social democratic parties, it has in recent years drifted somewhat rightwards and adopted a more third-way program. Additionally, as a consequence of the Finnish parliamentary system, where coalition governments are the only possibility, parties are forced to move towards the center in order to be able to co-operate successfully.  As the political center seems to have nasty habit of inching to the right, so has the Finnish SDP.

The first warning signs were apparent in 2006, when incumbent president Tarja Halonen was supposed to cruise to re-election. While she amassed an impressive 46% of the vote in the first round, she fell short of her stated goal of reaching 50% and thus avoiding a second round of voting. Instead, she had to face the NC's Sauli Niinistö, a former party chairman and Minister of Finance. While she managed to defeat Niinistö, it was a narrow victory - 51.5% to 48.5%. Niinistö would subsequently run in the 2007 election for the Eduskunta, the Finnish parliament, where he received more votes than any other Eduskunta candidate in history. He's currently serving as the speaker of the Eduskunta, and it is almost a foregone conclusion that Niinistö will win the presidential election in 2012, putting an end to thirty years of the SDP controlling the Finnish presidency.

2007 turned out to be a disastrous year for the SDP election-wise. During the campaign, the SDP ran advertisements with a clear social democratic theme, proclaiming that the red-colored "we" are larger than the blue-colored "I". The SDP was looking to overtake the Centre Party as the largest party in the Eduskunta; instead, it suffered a rather humiliating defeat by falling behind the NC and ending up being only the third largest party - one of the worst results for the SDP in many years. After twelve years in the government, the party was forced into opposition.
There are of course numerous factors contributing to the SDP's defeat, a lack of clear leadership being chief among of them. But more worryingly, the SDP's message during the campaign apparently failed completely to catch on with the Finnish populace.
With the results in mind, it was not particularly surprising that party chairman Eero Heinäluoma chose to step down in 2008. In his place, the party elected Jutta Urpilainen, a teacher who at the time was a mere 33 years old and had served a scant four years in the Eduskunta; an apparent attempt to counter the NC's popular, charismatic and young chairman, Jyrki "People die every day" Katainen.

Urpilainen's first test as chairwoman was last year's municipal elections; the outcome has to be considered middling, at best. Having been the largest party in the previous municipal elections, the SDP once again fell behind the NC. In Helsinki, the Green League overtook the SDP as the second largest party in the city council.
Whatever discontent there is with the Finnish blue-green coalition government, the CP, who also suffered losses in the municipal elections, appears to be bearing the brunt of it, and Prime Minister Matti Vanhanen in particular seems to be fast reaching the expiration date of his political career. The SDP has thus far been unable to put up credible and effective opposition. Not for a lack of opportunity; there have been numerous flare-ups and scandals during the 18 months the blue-green coalition has been in power.
Most notably, the government suffered set-backs from its handling of a threatening health care workers strike in 2007. Ever eager to provide a perfect illustration of compassionate, Katainen proclaimed that while any deaths that might occur due to the potential reduced availability of health care, "people die every day".
The Ilkka Kanerva sex SMS scandal in the first half of 2008 has apparently not caused any fallout for the NC beyond Kanerva's resignation as Foreign Minister (as an aside, Kanerva stood for election in last year's municipal elections, running ads that boldly declared Kanerva "Human". It is unknown how many people were not familiar with Kanerva's taxonomy prior to the campaign.).

The SDP seems to be charting dangerous territory, as the NC has successfully managed to present itself as the party of the middle class and indeed as the party of general welfare. In his 2006 campaign, Sauli Niinistö declared himself the candidate of the working man, a slightly ridiculous proposition coming from a guy who at the time was serving as vice-president of a bank in Luxembourg (and never mind that the Finnish president is supposed to concern him- or herself primarily with foreign policy. Although this minor detail was ignored by most of the presidential candidates.).

An additional factor is the increasing popularity of the right-wing populist party the True Finns (as opposed to all the false Finns?), which to some extent has been eating into the SDP's constituency. Like many populist parties, the True Finns revolves around its chairman, Timo Soini, but if the party's success in the municipal elections is anything to go by, it might threaten to break into the political mainstream. It could of course be possible or even likely that this success is temporary, and that the party will be unable to maintain its momentum when it has evolve from being a protest party and to participating in actual governance.  That said, it seems people who are well off are apparently too well off to worry about their fellow human beings , while people who aren't well off take out their frustration by voting for populist parties or by not participating at all. A very troublesome equation for the SDP.

It's hard to tell where the SDP goes from here. One can only hope that Urpilainen finds her voice and a workable direction for the party that does not involve moving further to the right. A few years in opposition may very well help the party crystallize its message into a winning campaign theme.

Although, with both the CP and the SDP suffering from declining support and an ascendant NC threatening to become the largest party in the next Eduskunta election (the latest poll have NC clearly in the lead with 24%, and the CP and the SDP trailing with about 21% and 20% respectively), one can't help but wonder if there's not a brewing re-alignment in Finnish politics.