Centre Party Secretary proposes extensive social contract
Freezing wages seen as one way to secure competitiveness
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Centre Party Secretary Jarmo Korhonen is proposing an extensive "social contract" to be enacted soon.
Korhonen sees such a contract as a necessary response to the hazards stemming from the economic crisis in the United States. He wants key labour market organisations, the Confederation of Finnish Industry (EK), and the national government to work together to draw up the contract.
He also feels that the political opposition should be kept informed about how the negotiations progress.
Korhonen says that for years all Finnish politicians have seen Finland as a part of a great social change which can be seen as in increasing inter-continental contacts.
“Where would globalisation have disappeared to now?” Korhonen asks of those who are saying that Finland can avoid the problems of the world. He says that it is quite clear that the difficulties of the United States will reverberate in Finland as well.
“Why wouldn’t a recession find its way to Finland, considering that bird flu can find the way too?” Korhonen asks.
Korhonen praises the government for the actions it has taken to stimulate the economy, but goes on to demand more action to keep the country from having to hit rock bottom again.
“Finns need to recognise that things are out of control in the United States. We need a longer-term plan for a period of slow growth”, he says.
In Korhonen’s view, the social contract should include difficult matters as well. To secure competitiveness it must be permissible to talk about freezing planned pay increases. He feels that “obviously excessive pay increases” have been made in Finland.
He also recognises that enacting such a contract might be very difficult, noting that Prime Minister Esko Aho (Centre) and Bank of Finland board member Kalevi Sorsa (SDP) tried and failed in such a project in 1991.
“At that time, labour union leaders said that they have not been chosen to reduce workers’ wages”, he points out.
Korhonen says that in connection with the contract, the government should compensate possible interventions on pay levels with other actions to secure purchasing power. One means to this end could be to cut fuel taxation.
Korhonen does not specify details of his proposal, but sees the protection of the competitiveness of Finland’s export industries to be of tantamount importance. He also does not want to rule out reductions in existing benefits.
Korhonen has not discussed his proposals with his party’s Chairman, Prime Minister Matti Vanhanen.
Helsingin Sanomat
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| 18.9.2008 - TODAY |
 Centre Party Secretary proposes extensive social contract |
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