Finland's Prime Minister Juha Sipila arrives for an EU leaders summit
Helsinki - AFP
A plan by Finland's centre-right government to revive the eurozone country's sluggish economy by extending working hours and reducing pay was at risk of unravelling Monday after key labour unions refused to endorse a deal.
Dubbed the "social contract" by Finland's pro-austerity government, the plan would result in three extra working days per year without compensation for many workers, and employees would have to pay a greater portion of social insurance contributions.
The plan is the brainchild of Prime Minister Juha Sipila, a former businessman who took office last May, to help the country recover from four years of recession and stagnation by restoring economic competitiveness through a deal between labour unions and employers.
While Finland has a long tradition of compromise between employer associations, unions and the government, the chances of a deal took a knock Monday after the country's largest confederation of employee unions, SAK, was riven by divisions over the pact.
SAK, which represents nearly one fifth of Finland's 5.4-million population, agreed Monday to give its "preliminary approval" for the deal, only to see five its member unions opt to stay out of the deal, including the country's single largest union PAM with 230,000 members employed in the service sector.
"In this situation it's not possible to state that there would be a deal and that it would be signed," Jyri Hakamies, the head of the Confederation of Finnish Industries (EK), said at a press conference in Helsinki, blaming the five unions that were still holding out.
It remained unclear on Monday whether the employers confederation, EK, would continue negotiations, as it considers that without the five unions there isn't sufficient union representation for a deal to be signed.