HELSINKI, March 1 (Xinhua) -- Finnish employers and unions clinched an agreement Monday to increase the annual working hours by three days and reduce pension and unemployment benefits, a deal assessed to improve the country's competitive edge.
According to Prime Minister Juha Sipila, the deal, reached between the employers and central unions of wage earners after ten months of negotiation, was acceptable although it was less than the once expected 5-percent "internal devaluation" demanded by the government.
As a euro country, Finland cannot carry out external devaluation. The country has suffered a slowdown in exports and negative growth for three years in succession.
Sipila's government, which came to power last May, wanted to save labor costs through "internal devaluation."
In mid-September last year, a government plan to impose tougher working conditions through binding legislation triggered the largest joint labor walkout since the 1950s.
Sixten Korkman, a professor of economics at Aalto University, said the deal would be the first step to recovery. He also underlined the need to improve confidence to implement the agreement, adding the government could now reconsider the suggested cutbacks in education services.
Analysts believe the agreement was reached because the government had agreed that local bargaining at the workplace would remain in the hands of the unions and not be enforced through legislation. This was a concession that one of the coalition parties, the conservative National Coalition Party, found difficult to accept.