Slide1: Case: Finland - Estonia Why Baltic states, why case Finland – Estonia? Baltic states – Estonia, Latvia and Lithuania – are small but dynamic transition economies The only three countries among the new EU members which were member states of the former Soviet Union From the Finnish perspective they form a natural zone for market expansion As regard to labour market dynamics and the possible emergence of a new regional labour market, only Estonia has greater significance while looking at the matter from the Finnish point of view  


Slide2: Case: Finland - Estonia Similarities and attractions Small and ‘peripheral’ countries/economies (population: Finland 5,2 million and Estonia 1,4 million = 6,6 million, 1,5% of the total EU population) Geographical location; North East corner of EU and long border with Russia Linguistic, cultural and historical traditions and ties Approx. 3 million trips from Finland to Estonia annually (year 2002)


Slide3: Case: Finland - Estonia Tones of public debate


Slide4: Case: Finland - Estonia


Slide5: Case: Finland - Estonia


Slide6: Case: Finland - Estonia Observation          While the flow of people from Estonia to Finland has remained constant but moderate, migration in the opposite direction has been almost non-existent.        The South-North flow of people has been ‘balanced’ by a North-South flow of Finnish investments in Estonia.   … and questions          Will this development accelerate as a result of Estonian EU membership?        Will it be beneficial or harmful for these countries?


Slide7: Case: Finland - Estonia Thesis 1.   It is our judgement that, as far as the mobility of companies, jobs and people across the Gulf of Finland is concerned, there is hardly any danger of such exodus of businesses from Finland to Estonia or workers in the opposite direction, which would be harmful for the development of labour market or employment situation in these countries.   Quite the opposite, the free movement of labour force, investment and jobs together would further strengthen the dynamic development of the emerging new regional labour market. In this respect, the transitory regulations imposing restrictions on the free movement of labour force might in the long run prove harmful.


Slide8: Case: Finland - Estonia Thesis 2. with further questions   Our analysis predicts that the current state of affairs will prevail also after May 2004. However, in long term, a new set of questions will emerge from the perspective of European single labour market policy and Finnish-Estonian regional policies: Is there a possibility for a joint Finnish-Estonian strategy to emerge for strengthening the co-operation between Estonia, in particular Tallinn-Harju region, and Southern Finland regions? What kind of partnerships could Finland and Estonia establish for better global competitiveness and improved social cohesion in the area? How could an equal partnership be developed in the current situation where Southern Finland is, in terms of economic performance, so overwhelming?   


Slide9: Case: Finland - Estonia Thesis 3.   The future of the cross-border labour market remains open. It might be argued that the Estonian-Finnish labour market interaction will constitute an emergent process of a 'socio-political experiment' where the Nordic welfare oriented system and the neo-liberal model are negotiating on a new type of labour market mechanisms. Will this socio-political experiment lead to the harmonization of labour market systems and labour market policies or, perhaps, to further intensification of the competition between the two rival models?