The social partners could not agree on "EMU buffers" in their meeting on 20 October 1997 in Helsinki and decided to continue the negotiations the following week. In the negotiations, which have been in progress all autumn, the working groups of the social partners have been trying to find answers to the questions concerning these "buffers" - a reserve which will collect funds to be used to the benefit of wage earners in adjusting to economic fluctuations when Finland joins the EU Economic and Monetary Union (EMU). During periods of business boom, money could be saved in the fund and then brought into use during recessions. The social partners are studying by means of three working groups whether there are any ways in which the occupational pension system, the unemployment benefit system or the personnel funds (a form of profit-sharing scheme) could be used to provide EMU buffers. Extra payments could be made by employers and employees into these systems in good times, allowing contribution increases to be controlled in bad times.
Over autumn 1997, the Finnish social partners have been trying to find a common policy concerning the so-called "EMU buffers" - a fund to help protect Finnish wage earners from fluctuations within EMU. The organisations believe, however, that the solution will not be found quickly.
The social partners could not agree on "EMU buffers" in their meeting on 20 October 1997 in Helsinki and decided to continue the negotiations the following week. In the negotiations, which have been in progress all autumn, the working groups of the social partners have been trying to find answers to the questions concerning these "buffers" - a reserve which will collect funds to be used to the benefit of wage earners in adjusting to economic fluctuations when Finland joins the EU Economic and Monetary Union (EMU). During periods of business boom, money could be saved in the fund and then brought into use during recessions. The social partners are studying by means of three working groups whether there are any ways in which the occupational pension system, the unemployment benefit system or the personnel funds (a form of profit-sharing scheme) could be used to provide EMU buffers. Extra payments could be made by employers and employees into these systems in good times, allowing contribution increases to be controlled in bad times.
The biggest concern in Finland is the asymmetry of the economy. Because of its structure of production, Finland might fall into a different stage of the economic cycle than the core countries in EMU. TheEuropean Central Bank (ECB) would not necessarily support the Finnish economy in recession, as much of the rest of the EU might be in a period of economic upswing.
Questions concerning the timing of the collection of the funds, the amount of the funds to be collected, the administration of the buffers and the mechanism to be used for discharging the buffers are still open.
Since the negotiations are still incomplete, the wage earners' organisations have not been able to take their final position in the matter concerning Finland joining EMU (FI9706120N). Parliament will make the final decision on entry in spring 1998. The negotiated solution to the buffers question will also have an influence on the current incomes policy negotiations (FI9710132F).
The employers are in favour of joining the EMU and according to them, the best buffers against economic fluctuations are firm public finances and strong company balance sheets.
Eurofound recommends citing this publication in the following way.
Eurofound (1997), No quick solution in negotiations on EMU buffers, article.
