Elinkeinoelämän keskusliitto Finlands Näringsliv Confederation of Finnish Industries

1. Elinkeinoelämän keskusliitto Finlands Näringsliv Confederation of Finnish Industries vvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvv 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 Finland’s GDP • Over 95% of Finland’s exports • About 950,000 employees in member companies Tekijä

3. Member Federations of EK Tekijä

4. Business Environment Economic Policy Industrial Relations Innovation Environment and Competences Business Infrastructure • Logistics • Energy • Environment and Climate • Sustainable Development • Business Law • Competition • Information Society • Trade Policy and International Relations • Economy • Taxation • Employment • Finance and Welfare • Business Cycles and Trends • Competitive-ness • Collective Bargaining • Development of Labour Market • Labour and Social law • Statistics and Surveys • Corporate Security • Business Development • Education, Training and Qualification Requirements • Labour and Immigration • Research and Technology • Business Services and Financing Communications SME-Affairs Regional Offices EK Brussels EK activities EK activities Tekijä

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?

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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). Tekijä

15. Impact on markets, sales and competition • Psychological prices (for example, 99 euros) • A dress costs Fim 299 (about 52 euro) • => 49 euro (6 % reduction) • A candy bar costs Fim 10 (about 1,7 euro) • => 1 euro (41 % reduction) • => The company may have to modify its product design and packing => • Implications to production and procurement Tekijä

16. How has euro affected Finnish economy?

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23. R&D Expenditure in Some Countries Tekijä

24. What happened to interest rates?

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27. Is the stability and growth pact difficult for small countries?

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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 Tekijä

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. Tekijä

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 EK’s 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? Tekijä

35. Thank you!