The European Commission has today adopted a positive assessment of Finland’s recovery and resilience plan. This is an important step towards the EU disbursing €2.1 billion in grants to Finland under the Recovery and Resilience Facility (RRF). The financing provided by the RRF will support the implementation of the crucial investment and reform measures outlined in Finland’s recovery and resilience plan. It will play a significant role in enabling Finland to emerge stronger from the COVID-19 pandemic.
The RRF is the key instrument at the heart of NextGenerationEU which will provide up to €800 billion (in current prices) to support investments and reforms across the EU. The Finnish plan forms part of an unprecedented coordinated EU response to the COVID-19 crisis, to address common European challenges by embracing the green and digital transitions, to strengthen economic and social resilience and the cohesion of the Single Market.
The Commission assessed Finland’s plan based on the criteria set out in the RRF Regulation. The Commission’s analysis considered, in particular, whether the investments and reforms contained in Finland’s plan support the green and digital transitions; contribute to effectively addressing challenges identified in the European Semester; and strengthen its growth potential, job creation and economic and social resilience.
Securing Finland’s green and digital transitions
The Commission’s assessment finds that Finland’s plan devotes 50% of the plan’s total allocation on measures that support climate objectives. Finland has announced an ambitious target for achieving carbon neutrality by 2035. The reforms and investments included in the plan will make an important contribution to Finland achieving this objective. The plan addresses each of the highest emitting sectors in turn, namely energy, housing, industry and transport. It includes reforms to phase out the use of coal in energy production, changes to taxation to favour cleaner technologies, and a reform of the Waste Act with increased targets for recycling and reuse. On the investment side, the plan will finance clean energy technologies and related infrastructure, industry decarbonisation, the replacement of oil boilers with low- or zero-carbon heating systems and private and public charging points for electric cars.
The Commission’s assessment finds that Finland’s plan devotes 27% of its total allocation on measures that support the digital transition. The plan includes measures to improve high-speed internet connectivity, particularly in rural areas, support the digitalisation of businesses and the public sector, enhance digital skills of the workforce and support the development of key technologies such as artificial intelligence, 6G and microelectronics.
Reinforcing Finland’s economic and social resilience
The Commission considers that Finland’s plan includes an extensive set of mutually reinforcing reforms and investments that contribute to effectively addressing the economic and social challenges outlined in the country-specific recommendations addressed to Finland in recent years.
It contains a broad set of reform measures to raise the employment rate and strengthen the functioning of the labour market, ranging from the transformation of Public Employment Services to improving and facilitating access to social and healthcare services. The plan includes specific measures to provide integration support for young people and people with partial work-capacity. The plan also includes measures to strengthen the effective supervision and enforcement of Finland’s anti-money laundering framework.
The plan represents a comprehensive and balanced response to the economic and social situation of Finland, thereby contributing appropriately to all six pillars referred to in the RRF Regulation.
Supporting flagship investment and reform projects
Finland’s plan proposes projects in all seven European flagship areas. These are specific investment projects, which address issues that are common to all Member States in areas that create jobs and growth and are needed for the green and digital transition. For instance, Finland has proposed to provide €161 million to investments in new energy technologies and €60 million toward the decarbonisation of industrial processes to support the green transition. To support the digital transition, the plan will invest €50 million in the rollout of rapid broadband services and €93 million to support the development of digital skills as part of continuous learning and labour market reforms.
The Commission’s assessment finds that none of the measures included in the plan significantly harms the environment, in line with the requirements laid out in the RRF Regulation.
The Commission considers that the controls systems put in place by Finland are adequate to protect the financial interests of the Union. The plan provides sufficient details on how national authorities will prevent, detect and correct instances of conflict of interest, corruption and fraud relating to the use of funds.
Members of the College said:
President Ursula von der Leyen said: “I am delighted to present the European Commission’s endorsement of Finland’s €2.1 billion recovery and resilience plan. I am proud that NextGenerationEU will make a significant contribution to support Finland’s goal to become carbon neutral by 2035. The plan will also help bolster Finland’s reputation for excellence in innovation with support for the development of new technologies in areas such as artificial intelligence, 6G and microelectronics. We will stand with Finland throughout the plan’s implementation to ensure that the reforms and investments it contains are fully delivered.”
Valdis Dombrovskis, Executive Vice-President for an Economy that Works for People, said: “The Commission has today given its green light for Finland’s recovery and resilience plan, which will set the country on a greener and more digital path as it recovers from the crisis. This plan will help Finland to meet its ambitious carbon-neutrality target by 2035, with reforms and investments that will reduce carbon emissions from energy production, housing, industry and transport. We welcome its focus on high-speed connectivity, particularly for sparsely populated areas to help maintain their economic activity, and on digitalising smaller businesses and the public sector. With reforms to boost employment and strengthen the labour market, Finland’s plan will promote smart, sustainable and inclusive growth once it is put into effect.”
Paolo Gentiloni, Commissioner for Economy, said: “Finland’s €2.1 billion recovery and resilience plan is strongly focused on the green transition. No less than 50% of its total allocation is set to support climate objectives, helping to speed the country towards its ambitious target of carbon neutrality by 2035. The plan also contains an array of measures to boost Finland’s already strong digital competitiveness. I particularly welcome the Finnish plan’s strong social elements, with measures to raise the employment rate, tackle youth unemployment and facilitate access to social and healthcare services.”
The Commission has today adopted a proposal for a decision to provide €2.1 billion in grants to Finland under the RRF. The Council will now have, as a rule, four weeks to adopt the Commission’s proposal.
The Council’s approval of the plan would allow for the disbursement of €271 million to Finland in pre-financing. This represents 13% of the total allocated amount for Finland.
The Commission will authorise further disbursements based on the satisfactory fulfilment of the milestones and targets outlined in the recovery and resilience plan, reflecting progress on the implementation of the investments and reforms.