Finland to use EU funding to boost investment and accelerate emissions reduction
Government Communications DepartmentMinistry of Finance 15.3.2021 14.02PRESS RELEASE
The Sustainable Growth Programme for Finland will boost investment in emissions reducing solutions, accelerate sustainable growth in the economy, and create long-term growth potential. Half of the funding involved will be for promoting a green transition, and about a quarter will be for digitalisation. The Programme will also boost public investment in research, development and innovation by approximately EUR 700 million.
The Programme will renew employment services, health and social services and services for continuous learning, making them more effective and improving their quality. Productivity and service accessibility will be improved through digitalisation funding of around EUR 540 million.
The ministerial working group on sustainable growth for Finland has focused on strong public-private partnerships in order to leverage investment. The aim of the Programme is to reduce carbon dioxide emissions in Finland in a fair and just way, but also to obtain new markets for Finnish companies and to gain a position at the leading edge internationally.
“Provisional estimates suggest we could mobilise more than EUR 3 billion in private investment. This would give the Programme a total impact of more than EUR 5 billion. The investments being made will accelerate emissions reduction measures in line with the low-carbon roadmaps for industrial sectors. The investments will potentially bring a substantial reduction of three million tonnes annually in Finland’s carbon dioxide emissions. This equates to about six per cent of Finland’s emissions,” says Minister of Finance Matti Vanhanen, chair of the ministerial working group.
“Finland’s gross domestic product in 2023 is estimated to be 0.5 per cent higher than the forecast figure when the impact of recovery elsewhere in the EU is also taken into account. More significantly, though, the reforms and investments will improve productivity and long-term growth potential throughout the current decade,” says Minister Vanhanen.
Funding for individual projects to be decided later
On Monday 15 March, the Ministerial Committee on Economic Policy gave its support to Finland’s preliminary Recovery and Resilience Plan, which outlines Finland’s use of funding from the EU’s Recovery and Resilience Facility. At this point, no position has been taken on the funding for individual projects. The time for project decisions will be after the transfer of funding to Finland’s national Budget during the current year.
Overall, the preliminary total for 2021–2023 is approximately EUR 2.1 billion at current prices. The final amount of funding for Finland from the EU’s Recovery and Resilience Facility will not be known until summer 2022, as the performance of the economy in 2021 and 2022 will affect the figures.
Finland will also receive funding for other programmes under the EU’s recovery package, such as those under the Just Transition Mechanism and the European Agricultural Fund for Rural Development. The content of these will be coordinated with the plan that has now been approved. This increases the overall amount of EU funding for Finland to an estimated total of EUR 2.9 billion at current prices (EUR 2.7 billion at 2018 prices).
Green transition will support structural change in the economy
The ‘green transition’ priority provisionally includes funding of approximately EUR 820 million at current prices. Some of the measures under the other priorities will also promote the green transition, and so, overall, the green transition accounts for about EUR 1,040 million at current prices, which is around half of the total.
The aim is to bring forward solutions that can reduce emissions both in Finland and worldwide. Putting into effect the low-carbon roadmaps for industrial sectors will be a significant component of the overall package.
The green transition will create new technologies for accelerating the move away from fossil energy. New jobs will be created across the country, replacing work being lost as a result of structural change. New skills will also emerge that boost the competitiveness of Finland’s export industry. Additional funding will help to build up the skills needed, by supporting education, training and research, and this will open up new study opportunities.
Support will be available for households switching from oil heating to renewable energy, for example. Financial support will also be available for businesses, municipalities and parishes.
Digitalisation will improve productivity and make services available to all
The ‘digitalisation’ priority provisionally includes funding of approximately EUR 220 million at current prices. If all projects promoting digitalisation are included, even where they are under other priorities, digitalisation accounts for about EUR 540 million at current prices, which is around a quarter of the total.
Digitalisation in rail transport will enable more efficient use of rail capacity, reduce disruption and improve safety. This project will make train travel smoother and will improve flexibility in goods transport – while also supporting climate objectives.
The Sustainable Growth Programme for Finland will bring fast internet connections to areas which are not served by the market. With fast internet access throughout the country, work can be done conveniently in the workplace, at home or even at a summer cottage or other secondary residence. The same applies to studying.
Businesses especially will benefit from the development of new leading edge technologies such as 6G and artificial intelligence. The aim is to create expertise in these sectors in Finland, which will generate jobs, open up study opportunities and improve Finland’s competitiveness.
In the future, receipts and invoices could be saved in electronic form online in a standard, machine-readable format. This means customers will be able to find their receipts in a single location and business operators can conveniently get an overall picture of their financial situation. This will also reduce the grey economy, as the tax authorities will readily have access to information on purchases.
Employment and skills will boost sustainable growth
The ‘employment and skills’ priority provisionally includes funding of approximately EUR 640 million at current prices.
Jobseekers and businesses will benefit from a customer-oriented service when the online services of the Employment and Economic Development Offices are improved and additional staff hired. Work-based immigration will operate more smoothly through the creation of convenient digital services. The Ohjaamo one-stop guidance centres will offer a wider range of youth services. People with impaired capacity for work will be able to find employment more successfully when structural reforms supporting this are brought forward.
Study opportunities will be improved, as higher education institutions will have more student places available. The Programme will accelerate the development of digital, location-independent learning environments in higher education institutions. Considerable investment in continuous learning will support the acquisition of new skills needed in the workplace, boosting employment. Additional and more diverse opportunities will be created for continuous learning, and it will be easier to find these. There will be more equitable participation.
Research, development and innovation will bring improved productivity and boost the international competitiveness of businesses. Additional funding will focus especially on promoting innovation and the national research infrastructure in support of the green transition.
Reform in travel and tourism and in the creative and cultural sectors will also be supported on the basis of competency and research.
Availability of health and social services will improve
The ‘health and social services’ priority provisionally includes funding of approximately EUR 400 million at current prices.
The reforms will mean people have quicker access to care, rehabilitation and other healthcare and social welfare services. Quicker access to mental health services will be made possible throughout the country. It is important to receive help at an early stage so that minor problems do not become more serious.
Improved availability of primary-level services will reduce the need for specialised medical care and demanding special services. This will curb the growth of health and social services expenditure.
The availability of healthcare and social welfare services and the accessibility of these services will improve as more digital service options are offered, such as online discussions with professionals and remote appointments. Mobile services can be brought to people’s homes or to shopping centres, for example. This will also support locally accessible services. It will be easier to meet people’s needs when professionals in different fields cooperate more closely and information is transmitted more effectively.
Final version of Plan ready in April
The Ministry of Finance is submitting the preliminary version of Finland’s Recovery and Resilience Plan to the European Commission. The Ministry will continue discussion of the Plan’s contents with the Commission, and will consult stakeholders during further preparation.
“The Plan as currently presented can still be changed. The Government aims to make it as effective as possible and to work transparently and in consultation with the different stakeholders. We welcome feedback and comments on the detailed programme now published,” says Minister Vanhanen.
The Government is to approve the final Recovery and Resilience Plan on 30 April, after which the Ministry of Finance will submit the Plan to the EU. The European Commission will assess the Plan, and the Council of the EU will approve it in the summer.