(c) 2013, Bloomberg News.

(c) 2013, Bloomberg News.

HELSINKI Finnish trade unions and employers have agreed on a three-year wage accord intended to boost the waning competitiveness of the northernmost euro member's industries.

In the first year, wages will increase by 20 euros ($26.40) per worker, before an 0.4 percent increase in the second year, the Helsinki-based employer group Confederation of Finnish Industries said in an emailed statement. The third year is optional, to be agreed upon in June 2015. Existing accords expire in October.

"Finns must be able to take decisions to turn the economy around," Director General Jyri Haekaemies said at a press conference in Helsinki Friday. "This is one of those decisions."

The accords allow Finland to regain lost competitiveness versus export-driven peers Germany and Sweden, said Haekaemies, the former economy minister. Its economy has failed to emerge from a second contraction in four years, even as the German and French economies pulled the 17-member euro area out of its longest recession in the second quarter.

Finnish unit labor costs, which show how well workers are paid relative to productivity, are 15 percent higher than in Germany and more than 20 percent above levels in Sweden, according to averages spanning 30 years and compiled by the Research Institute of the Finnish Economy ETLA.

The framework agreement will come into force on Oct. 25 provided enough unions sign on and the government offers "adequate" help to boost competitiveness, the industry group said. Individual unions and employer organizations will negotiate their own collective agreements within the framework.

Finland's government agreed on a 9 billion-euro plan Thursday to boost employment and productivity by 2017 to ensure it has money to pay for its aging population. The unions and industry groups will negotiate a pension reform by the second half of 2014, Haekaemies said.

"This deal targets boosting employment in Finland," said Lauri Lyly, president of the Central Organization of Finnish Trade Unions SAK.

bc-finland