Helsinki (15.08.1997 - Juhani Artto) The Finnish government has agreed on a two per cent cut in the 1998 income tax rate. This is to compensate for anticipated inflation. The government is ready for greater tax cuts in autumn if wage settlements remain moderate in the next round of collective agreements.

Analysts believe that the employer and trade union organisations will reach a new centralised collective agreement in the next few months. One obstacle, which is probably not insurmountable, lies in the specialised trade problems emphasized by the Union of the Pulp and Paper Workers. Negotiations to solve these special problems began earlier this week.