News |

Tuesday's papers: Backtracking banker, back to school blues and budget bother

Tuesday's newspapers cover a banker who backtracked on a previous promise to cut his salary, a look at the everyday routine for families with school-age children, analysis of the difficulties of cutting ineffective subsidies for business in the upcoming state budget, and news of ill-prepared shopkeepers at a Helsinki festival.

Reijo Karhinen
Reijo Karhinen said he'd cut his pay if Finnish workers did the same. Image: Yle

Two years ago the then-newly elected Juha Sipilä government set about slashing wage costs by 5 percent across the Finnish economy in a bit to improve the country's competitiveness relative to other European countries. The idea was that Finnish workers had received over-generous pay rises in recent years despite sluggish economic growth.

That was eventually agreed a year later, after extensive wrangling and compromises on all sides, but not before some business leaders had promised to take some of the pain as well. One of them was Reijo Karhinen, Executive Chairman of OP, Finland's biggest financial group, who said that he would cut his salary by five percent if the competitiveness pact was agreed.

Ilta-Sanomat took at look at the company's accounts and found that actually Karhinen's pay had stayed the same in 2016, when his basic salary for the year was 754,392 euros or 62,866 euros a month.

Karhinen tells the paper that as the pact agreed did not hit the 5 percent mark, he had not felt obliged to cut his own pay. The agreement had switched some pension payments from employer to employee, lengthened working hours and cut holiday pay for public sector workers to give a cumulative impact on staff costs of between 3 and 4 percent.

Schooldays are here again

Finland's schoolkids return to the classroom this week as the long summer holiday draws to a close. Helsingin Sanomat has a big feature on Tuesday, including the results of a reader survey about how much time first-graders should spend alone and a look at changes to the curriculum.

The survey suggested that children can handle between half an hour to an hour and a half on their own after the end of school. That's a big question in Finland, where kids start school at the age of seven and have shorter days--often finishing well before parents are home from work.

HS also interviews an expert from the Mannerheim League for Child Welfare, who said that it pays to listen carefully to what children say. They might put a brave face on things and claim they're ready to be independent even when they feel a little scared.

Lastly, the paper looks at changes to the primary school routine. Foreign languages will be introduced earlier, in the first or second year of school. Institutions in more challenging areas will get funding to hire more staff, and there will be an emphasis on hobbies to try and help each child find at least one hobby.

Business subsidies here to stay

HS also analyses the state of business subsidies in Finland, which a report recently found were ineffective and wasteful. There is broad agreement among experts and even within the government that the 2.9 billion euro bill for supporting companies should be cut--they just haven't proposed any way to do that, and have no intention of doing so in next year's state budget.

HS reports that the economic liberals in the National Coalition are keen to slash support for employment in inefficient businesses, while the Centre and New Alternative/Blue Reform are much less keen on that kind of creative destruction.

The biggest problem, according to HS, is that we are now two years away from a parliamentary election, and any announced cuts will be protested long and hard by the firms losing out. No party wants to be subjected to that kind of noise, so the reforms have been kicked into the long grass.

HS wonders why there isn't even a timetable for future cuts, allowing businesses time to plan for the change. That's been used effectively with mortgage interest tax relief, which has been cut in phases so that the average borrower barely notices the change.

The paper says that Minister for the Economy Mika Lintilä could have been expected to produce such a plan, but he hasn't.

Latest in: News


Our picks