Paperworkers find buffer funds agreement insufficient

In November 1997, the Finnish Paper Workers' Union stated that the agreement on the "EMU buffer funds" drawn up by the social partners at national level is insufficient. The union believes that some central sector-specific objectives were left out of the agreement.

According to the Paperworkers' Union (Paperiliitto), the agreement reached by the central social partners on 17 November on the creation of "buffer funds" to protect Finland against cyclical economic changes within EU Economic and Monetary Union (EMU) is insufficient. Under the agreement (FI9711138F), a total sum of up to FIM 7 billion will be collected in two buffer funds created in the occupational pension scheme and the unemployment insurance system. During periods of economic prosperity, employers and employees will pay higher contributions to the schemes than necessary, allowing rises in these contributions to be controlled during times of recession by using the buffer fund to meet benefit and pension costs.

In its statement made on 20 November, the Paperworkers' Union - an affiliate of the SAK confederation - claims that the buffers agreement will amend the financing of unemployment benefit in the employers' favour. The union believes that larger buffers should have been created in the unemployment insurance funds, to prepare for more severe national crises than usual. Furthermore, according to the union, personnel funds (a form of profit-sharing scheme) could have been used as a very important additional buffer to balance cyclical changes. However, the central social partners dealt with this matter only by making a common statement that the issue will be negotiated at local level. The Paperworkers' Union had earlier announced that it is not willing to give up the funds, which are under threat: two large groups of forestry companies, ENSO and the UPM-Kymmene, have announced that they will run down their personnel funds.

The Paperworkers' Union also demands that the lay-off security system should be developed to protect employees during recession. By this means, the union wants to prevent the lay-offs to which paper industry usually resorts when demand becomes weaker, with employees being offered training instead for the period of lay-off.

What the union considers to be positive about the buffers agreement is that the benefits and pensions provided for unemployed and retired persons are not weakened. The buffers are also seen as diminishing pressure to reduce benefits during recession.

Both the maintenance of personnel funds and the development of lay-off security are sector-specific problems brought up by the Paperworkers' Union. Since the problems have not been resolved yet, the union does not want to take a stand on Finland joining the EMU.