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Government agrees to defer 200m in unemployment benefit cuts

Juha Sipilä’s government has agreed to postpone plans to cut 200 million euros from unemployment benefits. Following a meeting with labour leaders Monday, the administration said that the proposal will now be implemented at the beginning of 2017, at the earliest.

Timo Soini, Juha Sipilä ja Alexander Stubb tiedotustilaisuudessa.
Perussuomalaisten puheenjohtaja Timo Soini, hallitusneuvottelujen vetäjä, keskustan puheenjohtaja Juha Sipilä ja kokoomuksen puheenjohtaja Alexander Stubb hallitusneuvottelujen tiedotustilaisuudessa valtioneuvoston juhlahuoneistossa Helsingissä keskiviikkona. Image: Antti Aimo-Koivisto / Lehtikuva

In a statement issued Monday, the government said that it had agreed to prepare the legal reforms required to cut back on unemployment benefits only following "dialogue with social partners".

According to the government timetable the preparatory work will take place by mid-October of this year. The government programme has sketched out 200 million euros in cuts to unemployment benefits, however it does not define how the cuts will be implemented.

According to the government statement the draft legislation will be tabled in Parliament next spring and the reform should come into force at the beginning of 2017. The new administration initially hoped to implement the benefit cuts at the beginning of 2016.

Prime Minister Juha Sipilä, Foreign Minister Timo Soini and Finance Minister Alexander Stubb represented the government in the talks with labour leaders on Monday.

STTK: No formal agreement yet

Meanwhile Antti Palola, head of the umbrella white collar union federation the STTK, said Monday that there had been no final and binding agreement to cut earnings-based unemployment benefits.

“No formal agreement has been made, we were just told that this is the situation and this is what the government wants to do. Now we have to see how the unions want to move forward,” Palola told Yle.

The union leader added that participants in the meeting with the government primarily discussed salary negotiations related to next year’s growth and employment pact.

Earlier on Monday the head of the metal workers union, Riku Aalto, told Yle that he wasn’t optimistic about a breakthrough in talks with the government on the growth and employment accord.

He was particularly displeased with government’s plans to cut earnings-based unemployment benefits and said that the administration’s perceived strong-arm tactics weren’t creating the best atmosphere for advancing a breakthrough.

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