Finland's government will honour a promise to cut taxes, a minister said on Monday, after unionised employees overwhelmingly agreed to work harder for less money to help kick-start an economy that surveys showed remains in the doldrums.
The economy has been struggling for a decade, with output still below the level it reached before the 2008/9 financial crisis amid high labour costs, the decline of Nokia's former phone business and a recession in neighbouring Russia.
To help Finland's exports regain lost competitiveness, the government and unions agreed labour reforms in June, under which working hours and workers' pension contributions will rise while holiday bonuses will be cut and wages frozen for a year.
If 90 percent of workers backed the deal, the government agreed to sweeten it with 515 million euros ($577 million) of tax cuts in 2017.
That threshold was passed on Sunday when information and communication technology workers in the Pro union signed up to the pact, Pro said. Lower support would have generated a lower level of tax cuts.
"The (deal) now has a coverage of more than 90 percent... The government has promised the tax breaks and that promise will be kept," Foreign Minister Timo Soini told lawmakers of his Finns party.
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