Minister of Economic Affairs Lintilä’s comments on the supplementary budget: Support to businesses, regions and new growth will get us through the COVID-19 crisis
On 2 June 2020, the Government reached an agreement on the fourth supplementary budget for 2020. “The measures we agreed on will build a bridge into a future beyond the coronavirus crisis. We can generate new growth by providing financial support to companies, building on the regions’ own strengths, investing in renewable energy and boosting Finnish expertise,” summarises Minister of Economic Affairs Mika Lintilä.
Support for business costs introduced
The Ministry of Economic Affairs and Employment, in cooperation with the Ministry of Finance, has prepared a new type of support: support for business costs, which is provided for a fixed-term. The Government’s proposal for an act on fixed-term support for business costs will be submitted to Parliament in early June.
“The objective of this support for business costs is to prevent a wave of bankruptcies and job cuts. We want to help companies recover from the crisis quickly, and to avoid temporary lay-offs becoming permanent,” says Minister Lintilä.
The support for business costs is intended to help companies facing difficulties due to the coronavirus epidemic. An appropriation of EUR 300 million is proposed for the purpose.
Additional financing to revitalise regional business and promote domestic tourism
The supplementary budget proposal includes additional financing of EUR 20 million to support the recovery of the regional business life and employment, and to strengthen the regional economy. It also includes separate additional investments in tourism promotion, such as financing for tourism infrastructure maintenance in the north.
“It is important to support the regions’ own recovery measures in order to mobilise all resources available in Finland. Similarly, investment in the vitality of the tourism industry supports domestic employment. This summer, our tourism industry will rely entirely on domestic travellers,” says Minister Lintilä.
Adequate financing will be ensured to maintain company stability and to drive growth
Additional capitalisation of EUR 250 million is proposed for Finnish Industry Investment Ltd Tesi. The additional financing will be used to expand the stability programme that was launched earlier this spring, to ensure adequate financing for early and growth-stage companies and midcaps, and to maintain the performance capacity of private equity funds.
“Tesi’s stability programme has proved to be necessary, and we will increase its operating capacity. At the same time, we also want to make sure sufficient financing is available to growth companies that offer jobs,” Minister Lintilä comments.
With the additional funding of EUR 150 million granted in the second supplementary budget for 2020, Tesi launched a stability programme to support medium-sized enterprises in sudden and temporary difficulties caused by the coronavirus epidemic with share investments and convertible bonds. So far, applications for programme financing amounting to more than EUR 130 million have been submitted. With the additional capitalisation proposed, the programme can be expanded and the adequacy of financing ensured.
Tesi will allocate the proposed additional financing to scalable, rapid growth companies, and midcaps. The financing arrangement may be expanded to include companies that have not previously been involved in private equity investments. The purpose of these measures is to secure financing arrangements amid the coronavirus crisis, as international investors are returning to their domestic markets and the planned bridge financing arrangements are postponed.
Tesi can also allocate additional financing to private equity funds to ensure their performance capacity and, if necessary, to increase the financing capacity. If necessary, financing could also be provided to form funds that specialise in providing support to companies in crisis.
Additional EUR 25 million is proposed to the financing provided by the ELY Centres for business development projects. This additional financing will bolster the competitiveness of SMEs and activate their ability and willingness to invest.
More energy aid and advisory services – additional investments in the construction of electric vehicle charging stations
Energy aid will be increased by EUR 20 million. Additional financing will be allocated to large-scale demonstration projects.
An additional appropriation of EUR 1 million is allocated to regional energy advisory services for information campaigns targeted at households, businesses and municipalities. In addition, an additional appropriation of EUR 1 million is proposed for the extension of the electric vehicle charging station network.
“Investing in low-carbon solutions is essential in terms of our climate objectives. Actions to promote renewable energy will boost new investment, thereby fuelling economic growth,” Lintilä concludes.
Additional investment in innovation lays the groundwork for future competitiveness growth
Additional financing of EUR 30.7 million is proposed for VTT Technical Research Centre of Finland Ltd. Of the total sum, EUR 20.7 million is to be spent on the acquisition of a quantum computer.
“The quantum computer will offer high-performance computing capacity for Finnish researchers and companies, and thus will have a significant impact on the future competitiveness of Finnish companies. With the quantum computer, we have the opportunity to create a whole new sector of industry”, Minister Lintilä emphasises.
With additional financing of EUR 10 million, VTT will launch measures to help bring manufacturing industry jobs back to Finland. Special attention will be paid to creating new solutions and business models that support reliable electricity distribution and more efficient use of infrastructure, and have significant export potential.
In addition, an increase of EUR 1 million is proposed for Business Finland’s operating expenses to support sales prospecting in the manufacturing industry, using methods such as exploration of business potential in low-carbon markets.
An increase of EUR 75 million is proposed for Business Finland’s grant authorisations. Of this sum, EUR 60 million is to be used to continue the business campaign for large, leading companies. The additional financing is hoped to encourage companies to step up their R&D&I activities by approximately EUR 300 million. In addition, EUR 15 million will be invested in a pilot project to create a partnership model for companies, higher education institutions and research institutes. The pilot project involves launching partnerships, in accordance with the national roadmap for research development and innovation, for themes in which Finnish players excel, have established and effective international cooperation networks, and the ability to make a commitment to strategic cooperation for several years.
An increase of EUR 20.75 million is proposed for innovation support for shipbuilding, with the objective of launching new shipbuilding projects in Finland.
Additional financing is proposed for the Geological Survey of Finland to be spent on developing a GTK Mintec test facility. Based in Outokumpu, Finland, GTK Mintec provides research services for the industry, generating new expertise for the raw materials and circular economy.
Antti Siika-aho, Special Adviser to the Minister of Economic Affairs, tel. +358 50 575 4118
Jenny Hasu, Special Adviser to the Minister of Economic Affairs, Ministry of Economic Affairs and Employment, tel. +358 40 658 35104
Mika Niemelä, Director of Finance, tel. +358 29 506 2135