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Finland to use EU stimulus funds to cut emissions

The government aims to revive the economy while supporting new investments in ecological sustainability.

Höyryä ja voimalinjoja
Innovation is expected to be a key driver in Finland's economic recovery. Image: Esko Jämsä / AOP

The Finnish government plans to use 2.3 billion euros in economic stimulus funding from the EU primarily to invest in reducing climate emissions and promote ecological sustainability.

On Friday, the cabinet approved a report on the use of EU stimulation funds which states that the plan supports the goals of economic, social and environmental sustainability of the current government programme.

Parliament will debate the plan next Tuesday.

Additional funding of about one billion euros for use in helping the economy recover from the effects of the coronavirus epidemic will also be forthcoming, but subject to a separate planning phase.

This first 2.3 billion is to be mainly targeted at investments that promote the transition to a low-carbon economy. The Ministry of Finance estimates that this will cost more than one billion euros. Some of the funding will be aimed at improvements in competitiveness. Around 300 million is earmarked to reduce a services backlog in the healthcare sector caused by the coronavirus epidemic.

The EU has tentatively agreed to jointly launch a 750 billion euros coronavirus pandemic recovery fund, which it will distribute in the form of grants and loans to member countries. However, EU countries are locked in a dispute over whether countries that violate the rule of law can also receive funding, which has caused a delay in finalising the plan.

Finland is to receive an estimated EUR 2.3 billion from the EU's Recovery and Resilience Facility during 2021–2023. In total, Finland can receive about 3 billion in grants.

At least 37 percent of the money must be spent on climate action and 20percent on digitisation. In addition, the Commission recommends that Finland invest in employment, social and health services, among other things.

Plenty of targets

The government had no difficulty finding items for which money would be needed. The Prime Minister's Social Democratic Party has emphasised in particular the need to boost Finnish industry. The Centre Party's concern is that investment benefits the whole of the country. Reducing climate emissions has been a goal of the whole government and the Greens in particular.

Six sectors have been identified to receive funding from the stimulus package.

These are increased support for education and research, reducing climate emissions, improving international competitiveness, promoting digitalisation and infrastructure, supporting the labour market, and improving access to social and health care.

Decisions by the government on specific projects will be made at a later date.

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