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• Jussi Pesonen of UPM: FINLAND IS SLACKING IN THE INDUSTRY RACE
According to Jussi Pesonen, President and CEO of UPM, Finland lacks a strong drive to preserve its industry. He was interviewed in EK’s Prima magazine published on October 6.
“Even the Government Programme fails to define practical measures. This will soon make it difficult to attract important industrial investments to the country,” says Pesonen.
Finland’s participation in the industry race is exceptionally sluggish: the outlying country seems to prefer the stick to the carrot. Electricity, for example, is around nine per cent more expensive than in Sweden, even though its market price is the same in both countries. The price difference comes from taxes. What is more, Fingrid, the Finnish power grid company, will raise prices by a whopping 30 per cent at the beginning of next year.
Pesonen says he also worries about Finland’s reputation because of the numerous illegal industrial actions. They cause considerable damage to society.
The planned restrictions on sulphur dioxide emissions from shipping will slap the export industry with annual costs of over one billion euros. Dependent as it is on sea transports, the restrictions will hit Finland harder than its competitors.
Erratically imposed additional expenses, such as uranium and windfall taxes, raise the demand for returns and the threshold for investment. Finland also has operating models in both the wood and labour market that do not suit today’s needs.
Pesonen does not expect to see investments in basic industry for some time.
“The business environment presents great challenges to basic industry, and sooner or later the whole country will suffer from this,” says Jussi Pesonen.
• MISLEADING COMPETITIVENESS SURVEYS
Finnish industry may not be as cost competitive as traditional competitiveness indicators lead us to believe. Reijo Mankinen, researcher at the Research Institute of the Finnish Economy (ETLA), is developing a calculation method that also takes into account the costs of intermediate inputs, such as energy, raw materials and logistics.
Including these prices shows that the cost competitiveness of Finnish industry has not improved in the past decade. The difference between traditional competitiveness calculations is considerable. If the prices of intermediate products are ignored, Finnish industry appears to have raised its cost competitiveness notably. In Prima’s interview, Mankinen points out that misleading surveys may result in poor political decisions.
According to Director Jussi Mustonen from EK, the inclusion of intermediate products in cost competitiveness calculations would show how everything affects everything in society. In his view, costs must be curbed in all sectors, and the entire economy should be kept in synchrony since the various pay settlements affect the economy overall.
• Mikko Pukkinen, EK: WEIGHING THE EU SKILLS OF POLITICIANS
Mikko Pukkinen, Director General of EK, is concerned about the Finnish politicians’ ability to defend Finnish interests in the EU and international forums. One of the most tragic cases is the marine sulphur directive, which imposes regulations on northern European sea areas that will be over thirty times tougher in 2015 than global obligations.
In an interview with EK’s Prima magazine, Pukkinen describes EK’s hard work to make its European sister organisations understand the seriousness of the matter. It has not been easy, but a consensus has now been reached in BusinessEurope, a cooperation forum for European business organisations. Efforts will continue, and it is now time for political decision-makers to roll up their sleeves.
The question is about competitiveness and employment, in other words, about matters in which the government, employee organisations and employers can achieve a great deal through cooperation. Pukkinen emphasises that political decision-makers now carry the main responsibility.
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