Water privatisation? Finland says no!

In early January 2020, the municipality of Jyväskylä, located in the Central Finland Region, announced its intention to part-privatise between 30 and 40 per cent of its multi-utility company Alva, including water, energy and heating. Bringing in expertise from the private sector would better equip the company to tackle current market challenges, the municipality stated. Moreover, mirroring water privatisation arguments elsewhere, privatisation was said to promise increased efficiency and lower consumer prices. However, the announcement led to an immediate public outcry. Several critical opinion pieces appeared in various Finnish daily newspapers, and activists from the Left Alliance party launched a public petition to push the Finnish parliament into action. On 10 February, Jyväskylä announced that it had withdrawn its proposal. In this post, Dominika Baczynska Kimberley and Andreas Bieler trace the dynamics underlying this quick turnaround.

Water privatization in Jyväskylä, Finland?

Photo by Sampo Sikiö

Jyväskylä is the first Finnish municipality, which has decided to part-privatize its water services, intending to sell 30 per cent of the municipal company. What may look as an attractive option at first sight to generate finance for the municipality, is however a potentially highly dangerous initiative. The experiences of water privatizations elsewhere in Europe counsel caution.

Globalisation and the erosion of the Nordic model

In 2007 the Finnish employers’ confederation withdrew from the comprehensive tripartite, multi-sector bargaining system, a step which had been taken by the Swedish employers’ federation 17 years earlier. In Sweden, it signalled to some extent the demise of the so-called Swedish model. In Finland, by contrast, Finnish employers organised in EK and here especially the Federation of Finnish Technology Industries, which represents Finnish export companies, did not succeed in enforcing company level bargaining and, thus, more flexibility in wage structures. Instead, a sectoral collective bargaining system, giving sectoral trade unions significant power, was established. How can we understand this failure in comparison to the more successful attack of the Swedish employers in the 1990s? In this blog post, I will argue that the far lower degree of transnationalization of production in Finland explains to some extent why the attack on the established class compromise happened much later than in Sweden and has been less successful. Nevertheless, I will also conclude that trade unions must remain vigilant in their protection of the welfare state as further attacks are likely.

Finnish trade unions in changing times – Part II: an attack on trade union rights?

Some of the trade union representatives, interviewed in the period of 8 April to 12 May 2010, and here in particular representatives from trade unions organising the workforce in the public and private service sectors, raised the concern that a returned centre-right government around the National Coalition Party and the Centre Party as the result of general elections in 2011 could lead to a more direct attack on trade unions and labour rights in Finland.

Finnish trade unions in changing times – Part I: the end of tripartism?

In the period of 8 April to 12 May 2010, I carried out 23 interviews on the Finnish political economy with representatives of Finnish trade unions, employers’ associations, political parties and government ministries. It became clear that Finnish trade unions face significant challenges in currently uncertain and changing times.