Government proposes support to SMEs to mitigate the effects of Brexit
The Government has submitted a legislative proposal to Parliament that will implement the EU’s Brexit adjustment reserve nationally. Funds from the reserve would be used to support companies that have been negatively affected by the UK’s withdrawal from the EU. The act is necessary for the utilisation of the funding reserved for Finland.
The act would lay down provisions on the national responsible authorities and the model for providing support through the adjustment reserve. The Brexit adjustment reserve could be used for business development aid in mainland Finland, which is why it would be necessary to temporarily amend the Act on Discretionary Government Grants for the Development of Business Operations in 2021–2028 and to make technical amendments to certain other acts.
Brexit adjustment reserve would be channelled to SMEs in the form of business development aid through ELY centres
Implementing this new temporary financial instrument would rely on the existing national management and control system for regional and structural policy. The bill proposes to implement the reserve by using Finland’s established aid schemes. The appropriation would be included in the discretionary business development aid granted by the Centres for Economic Development, Transport and the Environment (ELY Centres). The Act on Discretionary Government Grants for the Development of Business Operations in 2021–2028 lays down provisions on business development aid.
Business development aid is a discretionary government grant that can be granted to small and medium-sized enterprises for innovative development measures and investments related to growth or internationalisation.
The funding procedures for the projects would remain largely unchanged. Because the funding for the Brexit adjustment reserve comes from the EU, the objectives of the reserve must be considered in the granting of aid. More detailed provisions on the additional requirements arising from the EU Regulation would be laid down in a decree on business subsidies. The ELY Centres of North Ostrobothnia, South Savo, Central Finland and Häme would grant the support. The support would be flexibly used within the national spending limits without specific quotas for individual regions.
A maximum of EUR 23.2 million has been provisionally reserved for Finland, of which EUR 9 million will be proposed as budget authority for the 2023 Budget. However, according to a preliminary estimate, most of this sum would not be used because the adverse impact on Finnish SMEs caused by the withdrawal of the United Kingdom and Northern Ireland has not been significant.
Proposed laws to enter into force at the start of 2023
The proposal is included in the 2023 budget proposal and will be discussed alongside it. The proposed acts are scheduled to enter into force on 1 January 2023. Any aid from the reserve must be granted and paid during 2023.
Petri Haapalainen, Ministerial Adviser, Ministry of Economic Affairs and Employment, tel. +358 295 064 922
Eliisa Hujala, Senior Specialist, Ministry of Economic Affairs and Employment, tel. +358 295 064 949