TALLINN - A crisis lies ahead for the European welfare society unless a thorough reform of the social system is prepared and implemented immediately, the chief executive officer of Finland's Sampo concern said last week.
Speaking in Tallinn on Sept. 9, Bjorn Wahlroos claimed that Europe had a good opportunity to learn from the experience of Scandinavian countries and avoid mistakes made in the development of those countries' social systems.
Given the ageing population and declining tax revenues, it is clear that Scandinavian states will soon be unable to fund their existing pension and public health systems, Wahlroos said. Yet it is hard to believe a radical reform of the system would begin before the crisis is at hand, as no one is willing to give up the benefits they are currently enjoying.
"The crisis won't arrive tomorrow or in a year, but in a decade it will be a fact," he said. "One would hope it would be realized that reform is vital."
The social system's heavy burden already does great harm to the competitiveness of the economies of core member states of the European Union, said Wahlroos, adding that French Economy Minister Nicolas Sarkozy's call for raising corporate taxes in new member states is foolish.
In view of Estonia's considerably more advantageous tax level, a continued shift of jobs from Finland to Estonia is probable, though it is not likely to cause a boom, Wahlroos said. Estonia lacks qualified labor, and new jobs there could be created for Finns instead, he said.
