Following the unprecedented crisis caused by the pandemic, Finland’s recovery and resilience plan responds to the need of fostering a strong recovery and making Finland future-ready. The reforms and investments in the plan will help Finland become more sustainable, resilient and better prepared for the challenges and opportunities of the green and digital transitions. To this end, the plan consists of 39 investments and 18 reforms. They will be supported by €2.1 billion in grants. 50% of the plan will support climate objectives and 27 % of the plan will support the digital transition.
The transformative impact of Finland’s plan is the result of a strong combination of reforms and investments which address the specific challenges of Finland. The reforms address bottlenecks to lasting and sustainable growth, while the investments aim to accelerate the digital transformation, research and investment in the green transition, to promote employment and skills improvement, and to improve access to health care and social services across the country. All reforms and investments have to be implemented within a tight time frame, as according to the Regulation on the Recovery and Resilience Facility they have to be completed by August 2026.
The plan will foster economic growth and create jobs. It will raise Finland’s gross domestic product by 0.4% to 0.6% by 2026 and create at least 8,000 additional jobs. This does not include the positive impact of structural reforms, which can be substantial. Finland will benefit significantly from the recovery and resilience plans of other Member States, notably through exports. These spill-over effects are estimated to account for 0.4 percentage points of gross domestic product by 2026. This demonstrates the added value of joint and coordinated action at the European level.
Impact of NextGenerationEU on Finland's gross domestic product by 2026
Jobs by 2026
Gross domestic product benefits thanks to other Member States’ recovery and resilience plans in 2026
When designing the plan, Finland’s authorities consulted national and regional social partners and stakeholders, while pursuing a close dialogue with the Commission ahead of the formal submission of the plan on 27 May 2021. On 4 October 2021, the Commission gave its green light to the plan. On this occasion, President von der Leyen symbolically handed over the Commission’s assessment to Prime Minister Marin during a visit in Finland. The plan was in turn adopted by the Council on 29 October, opening the door to its implementation and financing.
Finland has set an ambitious target of achieving carbon neutrality by 2035. Substantial reforms and investments are required to put the country on track towards the achievement of this goal. This concerns in particular the sectors that currently have the highest emissions including energy, housing, transport and industry.
Key measures for the green transition
Finland's recovery and resilience plan includes an amendment to the Climate Change Act, which will anchor the country's ambitious 2035 target into law. A reform of the Waste Act will increase the targets for recycling and reuse. The phase out of coal use in energy and a reform of energy taxation will contribute to promoting cleaner technologies. The plan supports the green transition through investments of €319 million in decarbonisation of the energy sector, namely in energy transmission and distribution and in new energy technologies. Furthermore, €156 million will be invested in low-carbon hydrogen along the hydrogen value chain as well as in carbon capture, storage and recovery. In addition, the plan supports low-carbon heating of buildings by providing €70 million funding for the replacement of oil boilers with low-or zero-carbon heating systems. On green transportation, €40 million will be invested in supporting private and public charging points for electric cars, gas charging and refuelling infrastructure.
Example project: Investments in new energy technology
€161 million is available for the most promising carbon-free energy investments. Eligible sectors include offshore wind power, renewable fuels in transport, geo-energy and solar energy. The objective of the investment is to contribute to Finland’s goal to achieve carbon neutrality by 2035 by stimulating the introduction of new clean technologies for energy production and use. The support shall prioritise sectors where emission reductions are difficult and costly (‘hard-to-decarbonise sectors’).
Digital challenges for Finland focus on the need to realise the transformative potential of digitalisation. This includes upgrading rail traffic management system, extending the coverage of broadband connections, digitalising healthcare and employment services, increasing the level of digitalisation and automation in business, and raising the level of investment in research, development and innovation.
Key measures for the digital transition
Finland’s recovery and resilience plan supports the digital transition with investments and reforms amounting to €50 million in high-speed broadband infrastructure across Finland. The plan supports with €85 million the Digirail project to introduce the European Rail Traffic Management System on the entire national railway network by 2040, along with the 4G and 5G-based Future Railway Mobile Communication System. Digital innovations for social welfare and health care services are supported with €100 million, investments in continuous learning with €46 million and investments in accelerating key technologies (microelectronics, 6G, artificial intelligence and quantum computing) with €25 million. The plan envisages a €20 million support for streamlining work- and education-based immigration and facilitating international recruitment.
Example project:Digital connectivity - Developing the quality and availability of communications networks
The investment on digital connectivity is an investment support scheme to increase the quality and availability of communication connections in areas where such connections are not provided based on market mechanisms alone. The measure includes the adoption of the legislation for the support programme, as well as the disbursement of financial support to broadband providers. Broadband connections supported under the scheme shall offer at least a capacity of 100 Mbit per second.
Economic and social resilience
Key macro-economic challenges for Finland’s economy include raising employment rate, addressing structural long-term unemployment, and enhancing skills to match market demands. Higher levels of investment in research and innovation and digitalisation are needed to increase productivity and competitiveness. Improving access to health and long-term care services, including promotion of e-health, is key to strengthening social resilience.
Key measures in reinforcing economic and social resilience
The plan reinforces economic and social resilience by allocating €90 million to the reform of the Public Employment Services to increase the employment rate. Furthermore, the plan invests €260 million in streamlining healthcare service processes and providing faster and more equal access to social and health services as well as to promote prevention and early identification of health issues. In addition, the plan allocates €267million to research, development and innovation related to the green and digital transition and supports with €60 millionsmall and medium-sized enterprises in the cultural and creative sectors to develop innovative services and operating models as well as the tourism and travel sectors.
Example project: Employment and labour market – Nordic model of employment services
The Nordic model of employment services consists of transitioning towards a new model of employment services, which will enhance active labour market policies by improving personalised and integrated services for jobseekers. This shall be done through a structural reform and digitalisation of the public employment services ("Nordic Employment model"). This reform addresses a major challenge related to the Finnish employment and labour market. Finland’s workforce is shrinking, affecting the country's growth potential, while relatively high structural unemployment persists, aggravated by the COVID-19 crisis. The objective of the reform is to raise the employment rate and strengthen the functioning of the labour market. The application of the new model is expected to contribute to the employment of around 10,000 persons.
The plan is consistent with relevant country-specific challenges and priorities identified in the European Semester, the annual cycle of coordination and surveillance of the EU’s economic policies. For a detailed explanation of the European Semester see the following link: The European Semester explained | European Commission (europa.eu)