Minister of Economic Affairs Mika Lintilä says strengthening of the resilience of businesses to continue during and after the coronavirus epidemic
“We have agreed on measures to help Finnish businesses prepare for the post-coronavirus period. We still need crisis support, but we also need more and more measures to help our businesses cope with the post-coronavirus period”, says Minister of Economic Affairs Mika Lintilä.
“While the Government expands the coronavirus-related funding for businesses we will also ensure the sufficiency of the support. We have already responded quickly by making a decision to increase Finnvera's authorisations and by increasing support funding. Now, we are also increasing direct support, research and development loans, and capital investments”, says Minister Lintilä.
Through various measures, the Ministry of Economic Affairs and Employment is seeking to ensure that businesses will be able to continue operating on a profitable basis after the coronavirus crisis is over.
Additional EUR 450 million from the supplementary budget to support businesses
The second supplementary budget proposal for 2020 includes an increase of EUR 450 million in grant-based business financing.
The additional funding is aimed at ensuring that sufficient resources are allocated for both coronavirus-related financing already in use by Business Finland and the Centres for Economic Development, Transport and the Environment and for the support of sole entrepreneurs, to be introduced in the near future. Of this increase, EUR 100 million is intended for support provided by Business Finland, EUR 200 million for support provided by the Centres for Economic Development, Transport and the Environment, and EUR 150 million for the support of sole entrepreneurs.
As a whole, support for businesses during the coronavirus crisis will increase to EUR 1.45 billion, of which Business Finland support account for EUR 800 million. The Centres for Economic Development, Transport and the Environment will receive EUR 400 million and sole entrepreneurs, EUR 250 million.
Business financing has been increased in the supplementary budget for 2020 and the Government proposes to further increase it in the second supplementary budget for 2020. These measures will also increase spending in the budget-planning period because some of the funded projects will be implemented over a longer period of time. The grant-based funding by Business Finland is estimated to generate additional expenditure of EUR 120 million for 2021, while loan-based financing is estimated to increase by EUR 150 million for 2021–2022. The funding granted by the Centres for Economic Development, Transport and the Environment is estimated to increase expenditure by EUR 125 million between 2021 and 2022.
The Government has agreed to raise Finnvera's domestic financing authorisations from EUR 4.2 billion to EUR 12 billion. Furthermore, it has been agreed to increase the guarantee loss liability given by the State to Finnvera from 50 per cent to 80 per cent in the current situation, as this will enable Finnvera to finance projects that involve greater risks. It is estimated that these measures will increase Finnvera's loss compensation costs by EUR 612.5 million during the budget-planning period.
Business Finland to introduce new R&D&I loans
The loans granted by Business Finland for research, development and innovation activities (R&D&I) will be increased by EUR 300 million.
Business Finland will introduce a new R&D&I loan that businesses can use more flexibly than the existing R&D&I loans to manage change. The loans are intended for identifying and developing new business in labour-intensive sectors where the coronavirus has caused difficulties.
Preparations for the content of the new loan have started and its introduction requires approval by the European Union. Approval is expected to take place very quickly in the current situation. Business Finland will open the application procedure as soon as possible in April.
New stabilisation programme starts
The second supplementary budget proposal for this year includes an additional capital input of EUR 150 million to Finnish Industry Investment Ltd (Tesi). The company will launch a funding programme to ensure that medium-sized enterprises that have run into temporary difficulties due to the coronavirus epidemic will be able to stay in business. The aim is to prevent bankruptcies among viable businesses that are a result of the highly exceptional crisis and that had nothing to do with their operations.
Investments will be made in businesses that have the potential to overcome their financial problems, which were caused by the epidemic, through additional funding.
Investments to be made in this temporary programme offer a faster track to helping businesses to cope with their liquidity crisis. Finnish Industry Investment Ltd will provide funding to medium-sized enterprises that have a turnover of at least EUR 10 million and more than 50 employees, and that had profitable business operations before the crisis and the potential for this also in future.
Investments in climate neutrality as part of the spending limits
The funding of VTT Technical Research Centre of Finland Ltd will be increased by a total of EUR 23 million during the budget-planning period. EUR 15 million of this increase will support efforts to achieve climate neutrality through national and EU programmes. VTT's additional funding will improve the opportunities of businesses to participate in EU framework programmes and partnerships.
Coronavirus crisis has an impact on production support for renewable energy
The coronavirus crisis has had a downward effect on the price of emission allowances and electricity. Price changes have an impact on the support for the production of renewable energy in the main title of expenditure of the Ministry of Economic Affairs and Employment; the resulting costs are expected to increase by more than EUR 240 million in the budget-planning period. Income from the auction of emission allowances is estimated to decrease by EUR 120 million.
Antti Siika-aho, Special Adviser to the Minister of Economic Affairs, tel. +358 295 047 228
Jenny Hasu, Special Adviser to the Minister of Economic Affairs, Ministry of Economic Affairs and Employment, tel. +358 29 504 7213
Mika Niemelä, Director of Finance, Ministry of Economic Affairs and Employment, tel. +358 29 506 2135