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1. The Committee notes with interest the Government's report for the period ending in May 1998, which contains comprehensive and useful information and transmits the observations made by the Central Organization of Finnish Trade Unions (SAK), the Confederation of Unions of Academic Professionals in Finland (AKAVA) and the Finnish Confederation of Salaried Employees (STTK).

2. The Committee notes that strong and sustained economic growth during the period has encouraged job creation and led to a fall in unemployment. The rate of unemployment, which in 1995 reached 17 per cent, fell to 14.5 per cent in 1997 and, according to OECD forecasts, should fall further to 12.4 per cent in 1998. The Government indicates that the growth in employment has benefited above all the most skilled young people, while older workers are particularly badly hit by long-term unemployment. The STTK considers that the persistence of long-term unemployment, which accounts for almost a third of total unemployment, reflects not only changes in the demand for qualifications on the labour market, but also a degree of discrimination against older people in the world of work. The STTK also draws attention to the slower fall in unemployment among women, who are increasingly being offered employment on fixed-term contracts and experience recurrent periods of unemployment, and to the number of jobs accounted for by involuntary part-time employment.

3. The Government considers that the improvement in the employment situation clearly shows the success of its policy and states that, through two successive agreements on incomes policy, employees have given their support to the Government's efforts to stimulate competitiveness and re-establish economic equilibrium. Furthermore, the Government considers that European Monetary Union should have a positive impact on growth by reducing interest rates and currency exchange risks. The Committee notes that the Government has attached to its report a copy of the National Action Plan for Employment which was based on the Guidelines produced by the extraordinary European Council on Employment which took place in Luxembourg in November 1997. The Committee asks the Government to continue to provide detailed information on the manner in which, in accordance with Article 2 of the Convention, the measures needed to promote employment are determined and reviewed regularly within the framework of a coordinated social and economic policy.

4. The Committee notes that since early 1998 labour market policy has been undergoing a general reform aimed at strengthening the advisory, training and job placement activities of the public employment service with a view to preventing marginalization of the unemployed. The STTK considers that this reform is appropriate, since it places the emphasis on the efficiency of the job-seeking process rather than on monitoring the unemployed, while the AKAVA points out that it has the advantage of stressing the quality of the measures adopted. The SAK, however, points out that employment office staff are too few in number, a problem which mostly affects the long-term unemployed. In addition, employment subsidies have been adjusted to make them contribute more effectively to the employment and training of the long-term unemployed. The Committee invites the Government to indicate the results of the different initiatives aimed at ensuring more effective targeting of active labour market policy measures, in particular with regard to older workers and the long-term unemployed.

5. Article 3. The Committee notes with particular interest that the different measures taken under the Government's employment programme, especially those aimed at ensuring "controlled flexibility" in the labour market with regard to hours of work or job security, have been drawn up in close consultation with the social partners. In this context, the Committee hopes that the Government will be able in its next report to indicate any further progress made in the fight against unemployment.