The Finnish social partners and the EU's Lisbon strategy

The reformulation of the European Union's Lisbon strategy has prompted discussions among the Finnish central social partner organisations in spring 2005. This article reviews the positions of the different actors in the debate.

A debate among the social partners in Finland over the Lisbon strategy, whose aim is to make the EU the most competitive economic area in the world by 2010, has largely taken place as a response to proposals to reformulate the strategy issued by the European Commission in February 2005. The Commission argues that the European economy is not developing as hoped and that the implementation of the targets of the Lisbon strategy has not been adequate. Thus it proposes that the strategy should be refocused so that the promotion of economic growth and jobs would take primacy over other objectives laid out in the strategy. In March, the Commission proposals were discussed by the European Council. It gave its support for them but left much of the responsibility for implementation with national governments (EU0504201F).

In May 2005, Finland's central trade union organisations held a joint seminar on the European Union. The reformulation of the Lisbon strategy was an important topic in these discussions. This article reviews the positions of the different actors as expressed in that seminar and in their earlier statements in the course of 2005.

Refocusing of Lisbon strategy concerns unions

All the Finnish central social partner organisations are committed to the Lisbon strategy goal of increasing the competitiveness of the EU. However, the proposed focus on growth and jobs has caused concern among all the three union confederations. The Central Organisation of Finnish Trade Unions (Suomen Ammattiliittojen Keskusjärjestö, SAK), the Finnish Confederation of Salaried Employees (Toimihenkilökeskusjärjestö, STTK) and the Confederation of Unions for Academic Professionals in Finland (Akateemisten Toimihenkilöiden Keskusjärjestö, AKAVA) fear that important social and ecological objectives of the Lisbon strategy may now be sidelined. They maintain that these objectives, including improvements in working conditions and welfare provisions and in the role played by the social partners, are not only important as such but are also needed to support the very goals of growth and higher employment. Finland is an indication of this, according to STTK, as productivity and competitiveness have developed very positively within a framework of extensive welfare services, high coverage of collective agreements and tripartite decision-making. SAK argues that the social objectives also have political significance; structural reforms have made the Lisbon strategy and the EU in general lose popularity. If further reforms were made on economic grounds only and without the cooperation of unions, resistance to the important task of improving competitiveness would only become stronger.

SAK and STTK have expressed their concern over the support of the Finnish government for the refocusing of the Lisbon strategy. They argue that the government should prioritise social and ecological issues in its EU policy and that this is particularly important due to the government’s central role in the EU in 2006 when Finland holds the EU Presidency.

SAK, STTK and AKAVA all share the view that the implementation of the Lisbon strategy goals should be tripartite. In Finland the sector-specific dialogue that was successfully carried through in 2004 could be continued as a part of the process, they maintain. This dialogue between the social partners at sector level was a component of a 'Finland in the global economy' project. Its aim was to discuss concrete ways in which the competitiveness of firms in the particular sectors could be ensured in the future. The social partners finished these talks successfully in 21 sectors, and in only two sectors they could not agree on the measures needed to promote competitiveness (FI0412202F).

Employers agree with Commission's proposals

The employers’ central organisation, the Confederation of Finnish Industries (Elinkeinoelämän keskusliitto, EK), is content with the Commission proposals to refocus the Lisbon strategy. EK is of the opinion that the EU has strongly furthered social and environmental issues in recent years, and it should now be the time to focus on economic fundamentals, entrepreneurship and the global competitiveness of companies. The main tools the EU has for doing this are trade policy, competition policy and common market principles. The EU should concentrate its efforts on these central areas, EK argues. One of the reasons for the failure of the Lisbon strategy, according to EK, is that the objectives of the project were too extensive to begin with. Furthermore, while advancing certain social and ecological objectives, the EU has actually worsened the competitiveness of European firms; the EU should not act as a pioneer in areas such as the politics of climate change and chemical use or the regulation of working life, if the effect of doing so is to dampen the competitiveness of companies, EK argues.

EK is nonetheless relatively content with the progress of the Lisbon strategy at EU level. It is thankful for the results that have been achieved in the areas of communications legislation, financial services and the liberalisation of energy markets, for instance. At national level, however, EK sees progress on necessary structural reforms in the EU Member States as having been very limited, largely due to popular opposition and the consequent inaction of governments. EK would considerably strengthen the role of the Commission in directing the Lisbon strategy in order to speed up the process. The European Council did not, however, take this stance at its March summit but instead preserved the dominant role of national governments in directing the process. For EK the Council’s final conclusions was a disappointment and it described the agreements included in them as too imprecise. Nonetheless, the adopted Commission proposal for drafting clearer and more concise national action plans for the implementation of the Lisbon strategy is, for EK, a step forward. In the case of Finland such a strategy already exists, it argues, namely the final report of the 'Finland in the global economy' project’s steering group. The report was presented to Prime Minister Matti Vanhanen in November 2004 and it included extensive reform proposals, many of which were strongly denounced by SAK and STTK (FI0412202F). EK recommends that the government should implement the programme laid out in this report. Furthermore, it stresses the importance of the Lisbon strategy’s refocus for the government, as the Finnish EU Presidency is approaching. New measures to promote competitiveness need to be pushed through in the EU under the direction of the Finnish government, EK maintains.

Commentary

Finnish central social partner organisations have taken a strong interest in the renewal of the Lisbon strategy. An important reason for this is that the Finnish government has a real possibility of affecting the course of the Lisbon process during Finland’s EU presidency in 2006. The government has been rightly criticised for being passive and lacking vision thus far in the EU context, but during the Presidency it will have to assume an active role. What this role will be like is to be decided between the coalition government parties of the Finnish Social Democratic Party (Suomen Sosialidemokraattinen Puolue, SDP), which is close to trade unions, and the Centre Party (Suomen Keskusta, Keskusta) and the Swedish People's Party (Ruotsalainen kansanpuolue, RKP), which are closer to employers. The social partners are understandably attempting to affect the nature of the compromise that needs to be reached between these parties in drafting the agenda for the EU Presidency.

As to the Lisbon process in Finland itself, the European Commission’s Implementation Reports on the Broad Economic Policy Guidelines (BEPGs) suggest that the Lisbon strategy goals have been put into practice more effectively in Finland than in EU 15 on the average. An important reason for this is that popular opposition to structural reforms has been rather limited in Finland. A case in point is pension reform, which has been fiercely opposed in many Member States but went through rather smoothly in Finland. The reform will in the long run lower pensions unless workers remain longer in employment (FI0403203F). One reason for this not arousing more opposition is that the union confederations were involved in the drafting of the reform. Thus SAK’s argument that popular opposition to the Lisbon process is mitigated by the involvement of unions seems to hold true. Quite another question is, however, which structural reforms unions are prepared to be a part of. STTK and SAK cannot, for example, accept cutting wages in low-income sectors to reflect the levels of productivity in those sectors, which is one of the Commission's recommendations for Finland in relation to the BEPGs. (Aleksi Kuusisto, Labour Institute for Economic Research)