Government supports Commission proposal to create Brexit adjustment reserve
The Government has adopted a favourable position on the European Commission’s proposal on a Brexit adjustment reserve. The aid distributed from the reserve would help counter the negative impact of the UK’s withdrawal from the EU, especially in the Member States, regions and sectors worst affected by it.
The proposal aims to mitigate the negative effects of Brexit on economic, social and territorial cohesion in the EU. In its communication to Parliament on 4 February, the Government emphasised the exceptional and temporary nature of the instrument.
Aid to be allocated to EU economies most affected by Brexit
As part of the Multiannual Financial Framework in July 2020, the European Council agreed on a Brexit adjustment reserve, which would amount to EUR 5 billion in 2018 prices.
The aid from the reserve would be allocated to those Member States whose economies suffer the most. The allocation would be based on the volume and significance of trade between the Member State and the UK. In addition, the negative impact on the fisheries sector would be taken into account separately in the distribution of the aid. The allocations could be used for public expenditure incurred by the Member States due to Brexit by the end of 2022.
According to the allocation mechanism proposed by the Commission, the majority of the reserve would be paid in 2021 as advance payments and the remainder in 2024. According to preliminary estimates, Finland would receive approximately EUR 13.6 million as an advance payment.
The decree is due to enter into force in June 2021.
The Government will decide on the national allocation of the aid later.
Petri Haapalainen, Ministerial Adviser, Ministry of Economic Affairs and Employment, tel. +358 29 506 4922
Eliisa Hujala, Senior Specialist, Ministry of Economic Affairs and Employment, tel. +358 29 506 4949