Lisbon Strategy for Growth and Jobs - Progress Report on Finland's National Reform Programme (2005-2008)

The Government yesterday endorsed the progress report for Finland's National Reform Programme. The purpose of the programme is to advance the Lisbon Strategy for growth and jobs. The main focus in Finland's reform programme is on securing sound public finances, especially in local government, on fostering and better exploiting the innovation system and on improving labour market functioning.

Finland has already reached a number of the goals in the original Lisbon agenda. Resources for R&D as well as employment rates among women and older workers have clearly exceeded the targets set for 2010. Finland also ranks high in Internal Market implementation.

The programme drawn up last year has been carried out as planned. Economic and employment growth in Finland has been robust by EU standards, and no significant changes have been required in the National Reform Programme. However, the progress report places greater emphasis on certain areas significant for Finland's development strategy, such as bolstering local government finances, enhancing the innovation system and improving the functioning of the labour market. The programme is now also tied in more closely with Finland's structural funds strategy.

The macro-economic priorities in the programme highlight the importance of securing economic stability and sustainable public finances for business and household decision-making. Stable and predictable price and cost developments - including taxation - makes it easier for businesses to make investment decisions and for households to make acquisitions. By preparing for an ageing population and enabling the contracting of longer term labour market agreements we are creating a stable and reliable environment. Concrete measures already in place or in progress include reforms in the pension system, a government productivity programme and a programme to restructure municipalities and service structures, which will gain momentum next year. These will help secure a well-functioning welfare system and adapt public finances to the existing resources in the national economy.

Inter-administrative policy programmes help boosting the growth potential

A key objective in Finland's National Reform Programme is to boost the growth potential in the economy by fostering competitiveness and productivity through structural reforms. Inter-administrative policy programmes in entrepreneurship, information society and job creation will help to achieve this goal more easily. The cornerstones in Finland's strategy are to strengthen competencies in the economy by revamping the education system and by increasing R&D funding and making better economic use of R&D exploits. Measures to improve the innovation system have already been carried out and introduced on a wide front. This theme has also been highlighted in events hosted by Finland during its Presidency.

While, gratifyingly, employment is up and unemployment is down, threats to the functioning of the labour market have also escalated. It has now become even more important to break open the bottlenecks and improve the functioning of the labour market. This was reflected in the Budget for 2007 too. Moreover, collective organisations have been taking an active part in efforts to reduce structural unemployment and to promote occupational and regional mobility in the workforce. This is a high priority in the progress report of the National Reform Programme.

The Report is available on the Ministry's web pages at
www.financeministry.fi/Publications and documents

For further information, please contact:
Mr Jukka Pekkarinen, Director General, tel. 160 33191
Ms Meri Obstbaum, Financial Counsellor, tel. 160 32550