Finnish Prime Minister Matti Vanhanen (Centre) and Estonia's Prime Minister Juhan Parts said on Monday that economic cooperation between Finland and Estonia is the way to deal with the problem of jobs going to countries with low labour costs.

   

The prime ministers met in the afternoon in Vantaa on the first day of Parts' two-day visit to Finland.

   

Concern has been expressed about jobs moving from Finland to China, as well as to Estonia. Parts does not believe that this will become a major problem for the two countries.

   

"It is not just one-way traffic. This is a win-win situation. Finnish companies get to do business in Estonia. This is not charity", Prime Minister Parts pointed out.

   

He also said that it is "understandable and acceptable" for Finland to put restrictions on the free movement of labour between the two countries. Finland plans to restrict the access of Estonian citizens to the Finnish labour market for two years after Estonia becomes a member of the European Union in May this year. Vanhanen promised that the process of granting work permits to Estonians would be "as flexible as possible".

   

The two prime ministers later attended an event held by OKO Bank in Vuosaari in the east of Helsinki.

In his speech Vanhanen said that the government had initiated a study into the impact of China, India, and other rapidly-growing economies on the Finnish economic and employment strategy.

   

The studies will focus on evaluating the impact of the ongoing changes in the world economy on the competitiveness of various sectors of the Finnish economy and on employment in Finland.

   

The work will be done in close cooperation with Finnish labour market organisations. Vanhanen said that in this way the government hopes to support the establishment of labour market solutions which promote growth, competitiveness, and employment in Finland.

Also talking about the Baltic states and China on Monday was former Prime Minister Esko Aho, who is to take on the post of director-general of the Finnish National Fund for Research and Development (SITRA).

   

At a seminar held by European Parliament members of the National Coalition Party, Aho said that he does not see the Baltic States as a serious threat to Finland.

   

He said that combining the low production costs of the Baltic countries, as well those of as Poland and Russia, with Finnish know-how can result in products and services that are competitive on the global market.

   

Speaking at the same seminar, former Estonian Prime Minister Mart Laar recommended that Finland adopt Estonia's model of a flat 26% income tax. Laar also predicted that Estonia would reach Finland's standard of living in 20 years.