Social partners from the export industry in Finland have issued a joint statement calling on the Government to adopt policies to improve competitiveness. Unions and employers in the export sector affiliated to the Confederation of Finnish Industries and Central Organisation of Finnish Trade Unions say it cannot sustain new tax increases. Despite the joint statement, unions and employers disagree on how the Government should go about restoring the country’s competitive edge.
Introduction
Employers and trade unions have joined forces to urge the Finnish Government to do more for exporters. The Confederation of Finnish Industries (EK) and the Central Organisation of Finnish Trade Unions (SAK), which represent employers and workers connected to the export industry, have made a joint statement on the issue. They have demanded that the Government budget session should adopt policies that promote the competitiveness of Finnish exports.
In the joint statement, the organisations stressed that the Finnish export industry cannot sustain new tax increases. They also said that Finnish companies should be fully compensated for the disincentives stemming from EC directive 1999/32 reducing the sulphur content of certain off-road transport fuels, and the consequent emissions trading.
The demands were presented by the Federation of Finnish Technology Industries (Teknologiateollisuus), the Chemical Industry Federation (Kemianteollisuus), the Finnish Forest Industries Federation (Metsäteollisuus), the Finnish Metalworkers’ Union (Metalli), the Finnish Paper Workers’ Union (Paperiliitto) and the Industrial Union (TEAM).
Competitiveness at risk
Finland has usually been ranked relatively high in international listings of competitiveness. Factors often noted are the country’s highly-educated population and track record for innovation. However, Jukka Palokangas, chief economist for Teknologiateollisuus, says:
From the perspective of the productivity and labour costs crucial to export industries, Finland’s position looks very different.
Teknologiateollisuus has stated that the competitive position of countries in southern Europe has developed more successfully than that of Finland. According to them, high labour costs have hit Finnish export industries partiularly hard.
Against this background, EK and Teknologiateollisuus have argued the need for the terms of the framework agreement on wages and conditions (FI1110011I) to be renegotiated, to take account of worsening economic conditions. Employers have also warned of mass dismissals unless agreed pay rises are reduced.
Controversy over German model
There has been a blunt and negative reaction from unions to employers’ calls for the terms of the framework agreement to be renegotiated. Union leaders have emphasised that the framework agreement can only be terminated or suspended if the parties who signed it agree to do so jointly. They admit that the economic outlook has weakened, although not as much, they insist, as the employer representatives claimed when publishing their initiatives.
A report (in Finnish) published in August by Teknologiateollisuus indicates that Finland’s cost competitiveness has declined in comparison with its main competitors.
In the debate surrounding this issue, employer representatives have referred to the strength of the German export industry in particular, and hinted that Finland should follow Germany’s example.
To counter the employers’ report, Metalli and the union Pro (Ammattiliitto Pro), affiliated to the Finnish Confederation of Professionals (STTK), released a 30-page study (in Finnish) on how Germany’s labour market model has affected German employees since the mid-1990s. Riku Aalto, President of Metalli, and Pro President Antti Rinne both agree that Germany’s road cannot be the Finnish road.
Aalto and Rinne claim that employers have totally ignored the employee perspective when referring to Germany’s example. They stress that it is essential for employees to be paid enough to make a decent living.
Pertti Jokivuori, University of Jyväskylä