Two reports published on the industrial relations implications of EMU in Finland

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Two separate committees - a group of professors appointed by the Government and a committee of economists from the Finnish social partners - published reports in early May 1997 on the industrial relations implications of EU Economic and Monetary Union (EMU) for Finland The social partners themselves have adopted a joint declaration on EMU membership.

The first report from the professorial group states that if Finland were to join EMU then pay would have to be more flexible than up to now, if a low inflation rate were to be achieved. Moreover, increases in pay would have to much lower than hitherto and small companies might even have to reduce pay levels. The working group recommends that Finland should adopt either a completely centralised or fully decentralised system of collective bargaining if these changes are to be implemented.

The second report from economists on the incomes policy committee of the social partners adopts a positive approach to joining EMU. Their report concludes that EMU would impose strict criteria for pay bargaining, price stability, the public sector and fiscal policy. If Finland were to stay out of EMU, it might well result in higher levels of inflation. The committee does not believe that EMU membership would necessarily result in any specific pressures on the Finnish negotiation system, but it does recommend improvements in payment-by-results systems and other forms of incentive pay.

A joint declaration from the Finnish social partners issued on 22 May 1997 states that it is their view that EMU membership would not necessarily threaten the current collective bargaining system or affect pay levels. The declaration also states that joining the European single currency "can commonly be seen as extension of the integration process".