Finnish recovery to take time till 2016

The first comments coming from the trade unions regarding the Society Pact, which forms the heart of the government programme and seeks to boost Finnish cost competitiveness, have not been encouraging. Those comments should be taken with a pinch of salt, but they do illustrate the challenges drafting the pact entails. 

The real negotiations have not even started yet, and it would be a surprise, if the talks collapsed at this stage. More likely, the next notable piece of news concerning the matter is probably going to be the announcement that the actual talks can start. Those discussions could easily last another year.

"The stakes are high. While even in the best case, the Finnish recovery will have to wait long into 2016, if the Society Pact fails, the medium term does not offer much hope either", says Nordea Bank. 

Even the unions are likely to gradually grasp the importance of reaching the pact, which makes it likely it will surface. The downside is that the negotiations will take a long time, while Finland needs quick action. Unfortunately, the current setup does not make a quick agreement realistic.