EU funding to be used to boost investment, cut emissions

The Ministerial Committee on Economic Policy on Monday 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 in the current year, said the Ministry of Finance in a press release.

Overall, the preliminary total of EU funding for 2021-2023 is about 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).

The Sustainable Growth Programme for Finland will boost investment, in emissions-reducing solutions, accelerating sustainable growth of the economy, and creating 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 of the 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 that we could mobilise more than EUR three billion in private investment. This would give the programme a total impact of more than EUR five 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,” said Minister of Finance Matti Vanhanen, chair of the ministerial working group.

The Ministry of Finance is submitting the preliminary version of Finland’s Recovery and Resilience Plan to the European Commission. The ministry will continue its discussion of the Plan’s contents with the commission and will consult the stakeholders concerned during further preparations.

“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,” said 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.