Elinkeinoel

1

• Elinkeinoelämän keskusliitto
• Finlands Näringsliv
• Confederation of Finnish Industries

1 EK/Eng/shs11.2004
2
EK represents

• The entire private sector and companies of all
  sizes
• 35 branch associations
• About 16,000 member companies, of which 96 are
  SMEs
• Over 70 of Finlands GDP
• Over 95 of Finlands exports
• About 950,000 employees in member companies

3
Member Federations of EK
Association of Finnish Furniture and Joinery Industries Association of Logistic Enterprises in Finland Association of Social Services Employers and Businesses Association of Support Service Industries, ASSI Chemical Industry Federation of Finland Coastal and Internal Waterway Employers Association Confederation of Finnish Construction Industries RT Employers Association for Transport and Special Services Employers Association of Private Educational Institutions Employers Association of the Special Branches Employers Federation of Road Transport Federation of Finnish Commerce Federation of Finnish Financial Services Federation of the Finnish Media Industry Finnish Association of Consulting Firms SKOL Finnish Energy Industries Finnish Food and Drink Industries Federation Finnish Forest Industries Federation Finnish Hospitality Association Finnish Plastic Industries Federation Finnish Port Operators Association Finnish Shipowners Association Finnish Special Purpose Shipowners' Association General Industry Federation Kulutustavararyhmä Pharma Industry Finland Private Employment Agencies Association Private Healthservice Association Property Maintenance Association Technology Industries of Finland The Employers' Association TIKLI The Finnish Cosmetic, Toiletry and Detergent Association The Rubber Manufacturers Association of Finland Ålands Arbetsgivareförening
4
EK activities
EK activities
5
How has euro affected the Finnish companies and
economy?

• 27.4.2010Simo Pinomaa Senior Economist
• Confederation of Finnish Industries EK

6
What happened to the price level in 2002?
7
(No Transcript)
8
(No Transcript)
9
(No Transcript)
10
(No Transcript)
11
(No Transcript)
12
(No Transcript)
13
(No Transcript)
14
Why did consumers feel that the euro raised
prices even though statistics show otherwise?

• Consumers had expected prices to rise as a result
  of the euro already before the transition had
  even taken place
• Consumers tend to remember price increases better
  than decreases
• The prices of many cheap (cup of coffee) items
  tended to rise affecting price perception
  although the real affect on prise level was small
  
• The food prices in January 2002 increased 7.0
  percent
• Rounded conversion rate in nearly all euro
  countries happened to be higher than the precise
  rate 1.8 percent on average.
• In Finland the rounded conversion rate (6) is 0.9
  percent higher than the actual rate (5.94573).

15
Impact on markets, sales and competition

• Psychological prices (for example, 99 euros)
• A dress costs Fim 299 (about 52 euro)
• gt 49 euro (6 reduction)
• A candy bar costs Fim 10 (about 1,7 euro)
• gt 1 euro (41 reduction)
• gt The company may have to modify its product
  design and packing
• gt
• Implications to production and procurement

16
How has euro affected Finnish economy?
17
(No Transcript)
18
(No Transcript)
19
(No Transcript)
20
(No Transcript)
21
(No Transcript)
22
(No Transcript)
23
RD Expenditure in Some Countries
24
What happened to interest rates?
25
(No Transcript)
26
(No Transcript)
27
Is the stability and growth pact difficult for
small countries?
28
(No Transcript)
29
(No Transcript)
30
How labour markets have reacted?

• - No more devaluations

31
Finnish industrial relations model typical
features

• Traditionally a high rate of organization both
  employers and employees (70 of employees are
  members in trade unions)
• 90 of employees are covered by collective
  agreements
• Branch-level collective agreements are generally
  binding
• Local bargaining today
• Collective agreement is already today allowing
  local bargaining in many cases on wage increases
  and working time arrangements
• Long traditions employer and employee
  confederations (social partners) established
  over 100 years ago

32
The need for more flexible wage system

• It should be possible to adjust wages and other
  labour costs to cyclical variations. This would
  require that wage increases can be determined
  more on the enterprise or division level.
• Variation of basic wages and salaries are often
  difficult to apply because binding nature of the
  collective agreements.
• Therefore profit based bonuses have become fairly
  common in Finland.
• Nowadays about 1/3 of manufacturing blue collar
  workers and 2/3 of white collar workers receive
  result based bonuses. In terms of magnitude, they
  average 5 per cent of annual earnings.

33
(No Transcript)
34
Future of collective bargaining in Finland

• In the future, collective bargaining should
• strengthen competitiveness,
• boost productivity,
• ensure better employment and balanced increase of
  purchasing power
• EK will no longer negotiate comprehensive income
  policy agreements employers and employees will
  negotiate on sectoral level, shifting more and
  more emphasis on workplace decision-making
• Change of role, but EKs role in
• drafting labour and social legislation in
  tripartite co-operation
• managing and revising social security schemes in
  tripartite co-operation
• bipartite negotiations with the trade unions
• will remain the same
• EK encourages wage determination at company level
  to reflect better productivity and individual
  performance
• Challenges
• how to control the wage race better?
• how to improve internal and external
  coordination?

35
Thank you!