Key Finnish objectives secured in EU recovery package

Finland secured its desired outcome on several key negotiating objectives of the European Union recovery package agreed by the European Council on Tuesday.

For instance, the grant component of the recovery instrument was reduced by EUR 110 billion compared to the original proposal, which is in line with Finland’s objectives, said a government press release.

Additionally, the period of validity of the instrument was shortened. The funding allocation criteria take into account the economic impacts of the coronavirus crisis better than that in the European Commission’s initial proposal.

“The agreement we have now reached is a package meant to help get Europe back on its feet after the coronavirus crisis. It is in Finland’s interest that the entire EU recovers from the crisis as soon as possible,” said Prime Minister Sanna Marin.

Finland also largely secured its negotiating objectives with regard to the Multiannual Financial Framework. The European Council agreed on a moderate ceiling for the financial framework.

When it comes to funding for rural development, which is very important for Finland, the agreement secures a level that is even higher than the funding in the current financial framework period. This is also the first time that cohesion and agricultural funds do not dominate the financial framework budget.

The package includes two key conditions related to the rule of law and climate goals, which Prime Minister Marin considers welcomed aspects in particular.

The use of EU funds will be anchored to the rule of law with a mechanism that will be extended to apply to both the financial framework and the recovery instrument.

This mechanism will protect EU funds from being used in situations where shortcomings are detected in compliance with the rule of law. At least 30 per cent of the multiannual financial framework and the recovery instrument must support climate goals, and all funding must support the objectives of the Paris Agreement.

On Tuesday at its special meeting in Brussels, the European Council reached an agreement on the EU recovery package.

The overall amount of commitments to the seven-year financial framework is EUR 1,074 billion. The total amount of the non-recurrent recovery instrument will be EUR 750 billion. EUR 360 billion of this will consist of loans and EUR 390 billion will be issued in the form of grants. The recovery instrument will remain in force until 2023.

News agency Xinhua adds: Finnish officials told a Finnish language newspaper Helsingin Sanomat on Tuesday that the estimated input to Finland as part of the recovery package will be 3.2 billion euros. And Finland will be paying the recovery package between 2021 and 2058, in all 6.6 billion euros.

In the seven-year budget, Finland is to receive 11.1 billion euros in EU funding, while Finnish payments to the EU will be 16.7 billion euros. Finland as a net payer will show a 5.6-billion-euro deficit in its payments and receivables from the EU, according to the newspaper.

Opposition parties, however, criticized the outcome. The main opposition Perussuomalaiset (Finns Party) leader Jussi Halla-aho, said the distribution criteria of the recovery package should have been essentially changed.

"Those countries that have managed their economies more responsibly will have to finance the problems that have resulted from long-term bad economic management in some other countries," he told Yle.