FINLAND - The Finnish government has withdrawn its plans to increase the pension age in increments from 63 to 65 from 2011, after reaching an agreement with the three main labour unions and employers.
Akava, the confederation of unions for professional and managerial staff, said the government's objective is to now find other methods to extend the work time scale, rather than mechanically lifting the retirement age - a move it said "would not have been a solution to the problem."
The agreement was reached at a meeting between the minister of finance Jyrki Katainen and leaders of the three main labour unions - the central organisation of Finnish trade unions (SAK), the Finnish confederation of salaried employees (STTK) and Akava - on Tuesday evening.
The negotiators then met with the Finnish prime minister on Wednesday morning, at his residence, to finalise the decision.
Although the government has now backtracked, the rift between the government and unions has dented confidence in the traditional tripartite communication between government, labour unions and employers.
Akava lawyer Jarmo Pätäri said that while the government has backtracked, the situation has "damaged" confidence and "diminished the credibility of the government."
Following the governments original proposal on February 24, the unions met on March 14, threatening potential strikes and other actions in opposition to the proposed age change.
The government had initially intended to increase the age because Finnish debts are increasing through the downturn and future recovery would be hindered by a smaller workforce.
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