Government: Parliamentary Republic
Area: 338,424 km²
GDP per capita: €44,300
Currency: Euro (€)
For the 2014-2020 financial framework of European Structural and Investments Funds, the Republic of Finland was allocated a total of €3.76billion, which, added to a national contribution of €4.66billion, see Finland reaching a total budget of €8.42billion to be invested in various areas.The country is on top of several charts in terms of quality of education, economy, infrastructure and environment protection, therefore the funding is used to further improve Finland’s excellence and to reduce the unemployment rate.
This budget is intended to be used through six national and regional programmes to:
- Improve the competitiveness of SMEs, mostly focusing on start-ups and companies that are already growing, innovating and expanding internationally;
- Boost innovation activity as well as research and development, as Finland aims to improve its ability to translate R&I into commercial products and services;
- Support the creation of new jobs, especially among young people and people over 50 years, focusing on the reinforcement of professional skills;
- Combat poverty and enhance social inclusion;
- Boost the transition to a low-carbon economy and renewable energy;
- Invest in environment protection and promote resource efficiency;
- Make fisheries, aquaculture and agriculture more sustainable.
The Finnish government has been focused on investing the budget of the European Structural and Investment Funds mainly on protecting the environment and tackling climate change-related issues, with around €4 billion coming mostly from the European Agricultural Fund for Rural Development (EAFRD). Relevant to the government’s agenda is also a boost to the competitiveness of small and medium enterprises, especially in the tech sector. In fact, almost €1.5 billion are destined to address this topic, with €500 million and €800 million coming from the European Regional Development Fund (ERDF) and EAFRD respectively.
As shown in the chart above, other targets for the government of Finland are research and innovation, the increase of the number of jobs and enhancements in social inclusion and poverty reduction: these targets are allocated €800 million, €700 million and €500 million respectively.
To fully understand the EU funding budget of the Finnish government, Chart 2 gives an overview of the total available budget divided into the shares that each European Fund has in the total budget of €8.42 billion.
With 67.2%, the EAFRD is the largest contributor to European funding in Finland, granting more than €5.5 billion alone. The ERDF accounts for 18.8%, around €1.5 billion, while the European Social Fund (ESF) grants €1 billion to increase jobs, improve educational and vocational training and to enhance social inclusion. With only €140 million, the European Maritime and Fisheries Fund contribute to just 1.7% of the total budget for Finland.
The country’s absorption rates are substantially higher compared to the European Union average: Finland has already allocated financial resources to selected projects for up to 88% of the total allotment, a budget of €7.4 billion, and has already spent almost €5 billion, meaning 55% of its total allocation, more than 20 percentage points above the average of EU member states. In fact, Finland reached the European average of spent resources already in 2016 and of allocated resources in 2017, confirming the evidence that the country is the leading member state in terms of European funding reception and absorption.