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Last Updated: Thursday, 23 June, 2005, 15:40 GMT 16:40 UK
Finland's paper strike rumbles on
Car magazines at newsagents
The action has led to fears of a magazine paper shortage in Europe
Finland's paper lock-out looks set to continue into July after unions rejected proposals from the national mediator for a new deal with employers.

The union rejected a third offer from mediator Juhani Salonius, arguing it would worsen working conditions.

Mr Salonius will ask the government to appoint an arbitration board to end the dispute, which is largely about pay.

The lock-out, which began on 18 May, has hit the paper sector and the Finnish economy hard.

Pay deal

The row began in November when forest industry employers opted not to take part in nationwide pay talks.

The conflict then escalated and lock-outs began on 18 May when firms - including Stora Enso and UPM-Kymmene - shut out staff after weeks of union protests and wildcat strikes.

Union leader Jouko Ahonen told Reuters the union's board was "unanimous" in its rejection of the arbitrator's proposals. Neither the union nor Mr Salonius have revealed what the proposals were.

"Considering there is already a national wage deal where other sectors have received certain salary increases ... we don't think it is fair that paper workers would end up ... with less," he added.

Economic blow

Employers have signalled they will keep paper workers locked out until 6 July.

The move could prove to be costly as the paper sector accounts for one-third of Finland's exports and 40-50% of manufacturing output

Finland's biggest bank, Sampo, has already cut its growth forecast for the country to 1.9% from 3.2% as a result of the lock out.

UPM-Kymmene, the world's largest papermaker, says lost production is costing it $4.9m (2.6m) a day.

The action has also prompted fears of a paper shortage in Europe - Finland produces about 4% of the world's total paper market but its share of the European magazine paper market is approximately 60%.

Finnish paper strike dents growth
21 Jun 05 |  Business
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31 May 05 |  Business
Finnish strike may hit local jobs
09 Jun 05 |  Cornwall

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