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PM: Planned Tax Cuts in Danger

Prime Minister Matti Vanhanen called the Tehy nursing union's rejection of the local authorities' final contract offer "regrettable" but reiterated that the government would not offer any more money to raise municipal wages.

He said that tax cuts planned over the next few years would have to be cancelled if all wage agreements are as high as those reached so far. He said the government plans to cut taxes when the economy begins its next downturn. For now, he says, the priority is to pay off the state debt.

Interviewed on YLE TV's Saturday afternoon current affairs programme, the premier warned that if unions drive excessively hard wage bargains, it could undermine Finland's competitiveness.

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