Roundup: Finnish employers, labour unions reach deal to improve economic competitiveness

After 13 months of arduous negotiations, Finnish employers and employees have reached an agreement which aimed to improve the country's economic competitiveness.

Under the agreement, annual working time for employees will be increased by 24 hours without compensation. Employees will have to pay more pension contributions while employers pay less.

The negotiations amounted to a cliffhanger throughout Friday as the influential metal workers and the technology industry failed to reach an agreement until late afternoon. The metal workers union held a vote within their board before they finally agreed to the deal.

In order to extend the working hours, various schemes had to be created, as most of the unions did not simply accept adding full working days to the calendar.

In the technology industry, for example, the metal workers will have extra shifts of 2-4 hours until they amount to 24 hours in a year.

The agreement, nicknamed as an "internal devaluation", affects 80 percent of the private sector and all state and municipality employees.

Prime minister Juha Sipila noted late Friday that the 24-hour-extension of annual working time reduces unit production costs by roughly 1.5 percent. Sipila said it would improve Finland's competitiveness in comparison with countries such as Germany and Sweden. He believed the result of the agreement would be reflected in the unemployment statistics as early as next year.

He underlined the deal could not solve "all the problems of Finland", but would have an important impact on turning around the stagnant Finnish economy.

The Sipila government helped reaching Friday's agreement with its pledge on tax concessions on Thursday. Sipila said the tax reduction could partially restore the purchasing power loss caused by the work force's heavier burden on social security payments. The 30 percent cutback of holiday bonuses in the public sector was believed to be the sole major loss that would not be compensated..

The deal fell short of the planned objectives of the employers and the center-right government that took office in the spring of 2015. For example, the companies had hoped the agreements with the employees would not be tied to the salary standard agreed by the trade unions and they had wished to have more opportunities to hire personnel for a limited time without a reason.

Initially the Sipila government was an active participant in the talks and endorsed many of the employers' demands. The effort suffered fierce setback.

Numerous deadlines could not be adhered to. A unique rally gathered 30,000 wage earners in Helsinki in September last year, and it turned out to be the largest ever demonstration against the government since Finland gained independence in 1917.

In the rounds of negotiations afterwards, the trade unions managed to repeal any intention to essentially weaken their bargaining rights.

The employers had to make concessions and their representatives complained the compromises diminished the value of the overall agreement.

Sipila welcomed Friday's result and said it "proved again that Finland is a country where agreements are possible". Endit