The high unemployment rate in Finland was one of the main factors which led to the current national collective agreement on incomes policy, signed in September 1995. Both employers and trade unions would like to see a new centralised agreement on incomes policy to maintain economic stability as the Finnish Government seeks to reach the inflation target for joining EU Economic and Monetary Union (EMU).
In summer 1997, the Confederation of Finnish Industry and Employers (TT) is currently discussing the possibility of negotiating a new agreement on a broad and comprehensive incomes policy. While the employers retain an open mind on the level of future pay settlements, they hope that the outcome of future negotiations will guarantee the continuity of moderate pay settlements.
The high unemployment rate in Finland was one of the main factors which led to the current national collective agreement on incomes policy, signed in September 1995. Both employers and trade unions would like to see a new centralised agreement on incomes policy to maintain economic stability as the Finnish Government seeks to reach the inflation target for joining EU Economic and Monetary Union (EMU).
The announcement in June 1997 by the Paperworkers' Union, one of the largest trade unions in Finland, of its intention to seek a separate agreement with the employers in the forestry sector (FI9706119N) has undermined the common approach of the unions in their policy of aiming to renew an agreement on incomes policy. It therefore seems unlikely that a broad consensus can be reached on a new centralised incomes policy agreement. Despite this setback, the employers' side are not too worried about the implications, considering that the level of future pay settlements is far more important. In an interview in Kauppalehti, Jussi Mustonen, head of the Confederation of Finnish Industry and Employers (TT), stated that the employers were keeping an open mind on the eventual outcome. So far, there have been no detailed discussions on the desirable level of pay settlements but the indications are that moderate settlements will continue.
The present two-year agreement, which is based on small nominal pay raises, has been influential in enhancing improvements in real earnings, and the unions might well be reluctant to do anything which might jeopardise these achievements. The recent joint opinion of the social partners on the desirability of Finland entering EMU (FI9706120N) illustrates the importance that both sides attach to keeping inflation low and maintaining Finland's competitiveness in world markets.
Eurofound recommends citing this publication in the following way.
Eurofound (1997), New centralised agreement on incomes policy unlikely, article.
