COMMISSION STAFF WORKING DOCUMENT Analysis of the recovery and resilience plan of Finland Accompanying the document Proposal for a COUNCIL IMPLEMENTING DECISION on the approval of the assessment of the recovery and resilience plan for Finland
Date: 2021-11-12
Institutions: European Commission, Secretariat-General
Subjects: EU aid, Finland, coronavirus disease, economic and social cohesion, economic recovery, economic reform, epidemic, investment, structural adjustment

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 12.11.2021  SWD(2021) 284 final/2  CORRIGENDUM  This document corrects document SWD(2021) 284 final of 04.10.2021. Correction of some errors on pages 3, 4, 28, 49, 50, 52, 53 and 72. The text should read as follows: COMMISSION STAFF WORKING DOCUMENT Analysis of the recovery and resilience plan of Finland Accompanying the document Proposal for a COUNCIL IMPLEMENTING DECISION on the approval of the assessment of the recovery and resilience plan for Finland {COM(2021) 624 final}  
 
 
Table of contents 

1.  Executive summary ............................................................................................................................... 2 

2.  Recovery and resilience challenges: scene-setter .................................................................................. 5 

2.1.  Macroeconomic outlook and developments since the 2020 country report .................................. 5 

2.2.  Challenges related to sustainable growth, cohesion, resilience and policies for the next 
generation .................................................................................................................................................. 8 

2.3.  Challenges related to the green and digital transition.................................................................. 11 

Green dimension.................................................................................................................................. 11 

Digital dimension ................................................................................................................................ 16 

3.  Objectives, structure and governance of the plan ................................................................................ 20 

3.1.  Overall strategy of the plan ......................................................................................................... 20 

3.2. 

Implementation aspects of the plan ............................................................................................. 23 

4.  Summary of the assessment of the plan .............................................................................................. 27 

4.1.  Comprehensive and adequately balanced response to the economic and social situation........... 27 

4.2. 

Link with country-specific recommendations and the European Semester ................................. 34 

4.3.  Growth potential, job creation, economic, institutional and social resilience, European Pillar of 
Social Rights, mitigating the impact of the crisis, and social territorial cohesion and convergence ....... 39 

4.4. 

The principle of ‘do no significant harm’ .................................................................................... 46 

4.5.  Green transition ........................................................................................................................... 48 

4.6.  Digital transition .......................................................................................................................... 52 

4.7. 

Lasting impact of the plan ........................................................................................................... 56 

4.8.  Milestones, targets, monitoring and implementation .................................................................. 59 

4.9.  Costing ........................................................................................................................................ 61 

4.10.  Controls and audit ....................................................................................................................... 63 

4.11.  Coherence .................................................................................................................................... 66 

5.  Annex .................................................................................................................................................. 70 

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1.  EXECUTIVE SUMMARY 

The COVID-19 pandemic has had a major impact on Finland, albeit less severe in terms of 
output, jobs and public finances than in many other EU Member States. After a fall of 2.8% 
in 2020, economic activity is expected to recover robustly by 2.7% and 2.9% respectively in 2021 
and  2022,  on  the  back  of  a  swiftly  recovering  domestic  demand  supported  by  favourable 
employment  and  wage  growth  developments.  After  a  fall  by  1.5%  in  2020,  employment  is 
expected to rise by about 1% each year over 2021 and 2022 as the recovery gathers pace, even 
though employment growth is likely to remain more sluggish in sectors that were more affected 
by the crisis. While government finances have been negatively affected by the COVID-19 crisis 
(with a general government deficit of 5.4% in 2020), the situation has been improving faster than 
initially expected and in 2021 the deficit is forecast at about 4.7% of GDP. 

Finland  is  expected  to  receive  approximately  EUR  2.1  billion  in  non-repayable  support 
from  the  Recovery  and  Resilience  Facility,  with  a  magnitude  equivalent  to  about  1%  of 
2019  GDP.  Finland  did  not  request  any  loans.  Its  recovery  and  resilience  plan  consists  of  57 
measures (18 reforms and 39 investments) within 13 components structured around four policy 
areas:  (1)  green  transition,  (2)  digital  transformation,  (3)  employment  and  skills,  research, 
development and innovation, support to companiesand (4) social and healthcare.  

The  Finnish  plan  submitted  on  27  May1  pursues  the  general  objective  of  the  Facility  to 
promote  the  Union’s  economic,  social  and  territorial  cohesion,  with  the  green  and  digital 
dimension featuring prominently. The plan includes major reforms such as the implementation 
of the health care reform  to  improve access  to  social and health services and the reform  of the 
public  employment  services  (the  so-called  “Nordic  model  of  public  employment  services”)  to 
increase  the  employment  rate.  Landmark  investments  include  support  schemes  in  energy 
transmission/distribution  and  in  new  energy  technologies,  in  low-carbon  hydrogen  and  in  the 
decarbonisation of industry. This is coupled with a prominent focus on the digitalisation of public 
administration and businesses, with investments in key digital technologies, connectivity, and the 
digitalisation of the railways network (Digirail – Digirata project).  

The structural challenges identified in the framework of the European Semester, including 
in the relevant country-specific recommendations, are addressed well.  The plan is expected 
to contribute to effectively addressing a significant subset of challenges identified in the country-
specific recommendations of 2019 and 2020 or in other relevant documents officially adopted by 
the Commission  under the European Semester and is  consistent with Council Recommendation 
on economic policy in the euro area adopted by the Council on 13 July 2021. Important reforms 
include  the  updated  Climate  Change  Act  and  the  ongoing  continuous  learning  and  social  and 
healthcare  reforms. Measures to  boost  employment,  as  well as measures to  enforce anti-money 
laundering and to support the establishment of a positive credit registry are also included in the 

1 Finland submitted its National Reform Programme on 27.05.2021. The information provided in the National 
Reform Programme is being considered and jointly assessed in this Staff Working Document together with the 
Recovery and Resilience Plan.  

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plan. Furthermore, the plan includes the two planned  Important Projects  of Common European 
Interest (IPCEIs) on microelectronics and hydrogen.  

Finland’s  recovery  and  resilience  plan  covers  comprehensively  the  six  pillars  structuring 
the scope of application of the Recovery and Resilience Facility, with an appropriate overall 
balance across pillars. Finland’s plan has a strategic focus on the challenges of the green (1) and 
digital transition (2), respecting the minimum allocations set in the Regulation. As regards, smart, 
sustainable,  and  inclusive  growth  (3),  the  measures  proposed  are  consistent  with  the 
government’s declared objective to raise the employment rate to 75%, while contributing to the 
implementation of the European Pillar of Social Rights, especially principles on gender equality, 
equal  opportunities,  active  support  to  employment,  inclusion  of  persons  with  disabilities, 
education,  training  and  life-long  learning  and  equal  access  to  healthcare.  As  regard  social  and 
territorial  cohesion  (4),  an area where  Finland  fares  better than most of  its EU peers, proposed 
measures  are  expected  to  positively  contribute  to  cohesion  and  convergence  by  addressing 
existing regional differences in provision of public services, including digital public services. To 
promote wider coherence across instruments, notably with the European Cohesion Policy Funds, 
a  balanced  territorial  allocation  of  resources  is  encouraged.  Regarding  health,  and  economic, 
social,  and  institutional  resilience  (5),  the  proposed  measures  address  the  specific  challenges 
caused by the COVID-19 pandemic, but they also focus on more long-term structural reform of 
improving  equal  access  to  care  with  the  aim  of  making  Finland’s  social  and  healthcare  system 
more  cost-effective  and  resilient.  Regarding  policies  for  the  next  generation  (6),  another  area 
where  Finland  fares  better  than  many  of  its  peers,  the  plan  aims  to  increase  the  availability  of 
study  places  to  support  reaching  the  government’s  new  tertiary  education  attainment  target.  At 
the same time, the plan also supports the acquisition of labour market relevant skills, which is key 
to  maintaining  the  employability  of  the  labour  force  in  an  increasingly  digital  and  green 
economy. This is expected to be achieved by supporting continuous learning, including through 
more  integrated  digital  platforms  and  online  services.  The  increase  in  higher  education  study 
places is also expected to contribute to employability, as those places are introduced mainly for 
sectors experiencing labour shortages. 

The  measures  in  Finland’s  recovery  and  resilience  plan  are  expected  to  effectively 
contribute  to  the  green  transition  and  address  the  challenges  resulting  thereof.  Green 
investments feature prominently in the plan. At 50.3%, the plan largely exceeds the 37% target, 
with  investments  focussing  on  clean  energy  technology  and  infrastructure,  decarbonising 
industry,  supporting  the  circular  economy,  electric  vehicle  charging  and  reducing  emissions  of 
the building stock. The plan is expected to significantly advance the decarbonisation and energy 
transition  objectives  as  set  out  in  its  National  Energy  and  Climate  Plan,  including  Finland’s 
ambitions to reach carbon neutrality by 2035. The recovery and resilience plan ensures for each 
reform and investment that no significant harm is done to any of the six environmental objectives 
within the meaning of Article 17 of Regulation (EU) No 2020/852.  

With respect to digital transformation, even though Finland has become a world leader in 
digital transformation, continued efforts are needed to roll out high-speed broadband and 
to  improve  other  digital  infrastructure  with  a  view  to  rationalise  transport  networks  and 
maintaining  economic  activity  in  remote  areas.  The  plan  contains  several  measures  that  are 
expected  to  contribute  to  the  digital  transition  and  to  address  challenges  resulting  thereof  in  a 

3 

 
 
lasting manner. According to the Commission estimates, digital expenditure would reach 27.5% 
of  the  total  plan,  with  an  emphasis  on  digital  infrastructure,  developing  the  quality  and 
availability  of  communications  networks,  on  the  digitalisation  of  rail  services  and  on  fostering 
innovation in advanced digital technologies and business take-up. Other investments support the 
ongoing reform efforts in the employment, social and healthcare domains, with a strong focus on 
the transformative potential of digitalisation (e.g. upskilling and re-skilling, the digitalisation of 
employment  and  social  and  healthcare  services  and  in  support  of  secure,  interoperable 
information  exchanges  between  competent  authorities  in  the  field  of  financial  supervision  and 
anti-money laundering). This is complemented by investments in key digital technologies such as 
6G, AI and quantum computing. 

In terms of lasting impact, the implementation of the envisaged reforms and investments is 
expected to bring about structural  changes to  the public administration that will improve 
its effectiveness and efficiency. With dedicated support to the green transition, new low-carbon 
solutions for the economy could accelerate the growth of emerging sectors, thus further creating 
opportunities for economic growth. The focus on digitalisation is expected to raise productivity in 
the long term. Reforms in active labour market policies, in accordance with the Nordic model of 
public  employment  services,  are  potentially  strong  drivers  in  raising  both  labour  supply  and 
improving  the  employability  of  jobseekers  and  under-represented  groups  in  the  labour  market. 
The  reform  of  social  and  healthcare  services  is  expected  to  increase  Finland’s  resilience  in  the 
long term. 

Finland  has  established  an  adequate  structure  to  implement  the  plan  and  to  monitor  and 
report on its progress. The proposed milestones are clear and realistic and reflect the lifecycle 
of  the  measures.  The  proposed  indicators  for  measuring  achievement  of  targets  are  relevant, 
acceptable and robust. With the proposed milestones and targets, the results stemming from the 
implementation of the plan can be satisfactorily monitored and tied to disbursements.  

Finland  has  provided  cost  estimates  for  all  concerned  measures  in  the  plan.  The  cost 
estimates  and  supporting  documents  broadly  comply  with  the  principles  that  costs  must  be 
justified,  reasonable,  plausible  and  commensurate.  The  cost  breakdowns  are  generally 
satisfactory,  yet  they  show  varying  degrees  of  detail  and  depth  of  calculation.  Considering  the 
economic and social impact of the plan, it is considered that the plan is in line with the principle 
of cost efficiency.  

The  audit  and  control  systems,  coordinated  by  the  Ministry  of  Finance,  are  assessed  as 
adequate. According to the plan, the Ministry of Finance (MoF) is responsible for coordination, 
control  and  audit,  preparation  of  payment  requests,  and  issuing  the  management  declaration. 
Remaining gaps are addressed in two dedicated milestones to be completed by Finland before the 
submission of the first payment request under the recovery and resilience plan and at the latest by 
31 December 2021. 

Finally,  Finland’s  recovery  and  resilience  plan  presents  strong  coherence.  The  structure 
within  components  is  clear  and  meaningful.  The  link  between  reforms  and  investments  is  well 
established with measures supporting and reinforcing each other. Reforms and investments across 
components  are  well  aligned.  For  example,  under  component  P2C2,  reforms  and  investments 
planned  under  the  “Digital  businesses  –  Real  Time  Economy  programme”,  under  “Virtual 

4 

 
 
increasing 

the  country’s  productivity  and  competitiveness.  Similarly, 

Finland” and under “Accelerating key technologies (microelectronics, 6G, artificial intelligence 
and  quantum  computing)”  share  with  RDI  funding  measures  considered  under  P3C3  the  same 
objective  of 
the 
digitalisation  of  the  services  under  “Virtual  Finland”  pursues  a  very  general  objective  of  the 
Finnish  plan  to  create  new  digital  services  and  replacing  existing  processes,  such  as  in  several 
measures  planned  under  policy  areas  3,  especially  the  “Streamlining  of  work-  and  education-
based immigration and recruitment of international talents”, and 4, in particular the development 
of digitalised social and healthcare services. The measures’ objectives are also well embedded in 
European and national initiatives such as the government programme.  

Table 1: Summary of the Finnish recovery and resilience plan assessment for the 11 criteria 
set by the Recovery and Resilience Facility regulation 

(1) 

(2) 

(3) 

(4) 

(5) 

(6) 

(7) 

(8) 

(9) 

(10) 

(11) 

Balance
d 
Respons
e 
A 

CSR
s 

Growth
, jobs… 

DNS
H 

Green 
target 

Digit
al 
target 

Lasting 
impact 

Milestones 
and 
Targets 

Costing 

Control 
System
s 

Coherenc
e 

A 

A 

A 

A 

A 

A 

A 

B 

A 

A 

2.  RECOVERY AND RESILIENCE CHALLENGES: SCENE-SETTER 

2.1. Macroeconomic outlook and developments since the 2020 country report 

The plan forecasts economic growth to rebound in 2021 following the COVID-19 triggered 
contraction in 2020. Real GDP is set to increase by 2.6% in 2021 after contracting by 3.3% in 
2020.  According  to  the  plan,  the  rate  of  economic  growth  is  expected  to  decelerate  in  the 
following  years,  first  to  2.5%  in  2022  and  then  to  1.5%  in  2023.  In  this  scenario,  real  GDP 
growth  is  expected  to  be  mainly  driven  by  a  recovery  in  domestic  demand.  Finland’s  plan 
forecasts inflation to remain contained, below 2%, until 2023. 

Against this backdrop, unemployment is expected to stay at 7.8% in 2021 before gradually 
falling  to  6.9%  by  2023.  The  crisis  has  mostly  affected  the  young  and  the  long-term 
unemployed.  Once  the  economic  recovery  takes  hold,  the  demand  for  labour  is  forecast  to 
increase, especially in services sector. The employment rate is forecast to reach 73.2% in 2023, 
which is above its 2019 level of 72.5%. This increase is partly due to the economic recovery and 
the shrinking working age population. 

In terms of fairness, Finland remains a relatively equal society, with inequality below both 
the EU average and the average in advanced economies. Overall, Finland performs relatively 
well in terms of social inclusion, ranking better than the average of the European Union for most 
of  the  indicators  used  for  the  principles  of  the  European  Pillar  of  Social  Rights.2  The  gender 

2 Eurostat, https://ec.europa.eu/eurostat/web/european-pillar-of-social-rights/indicators. 

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employment gap and the share of early leavers from education and training remain below the EU 
average. The share of people at risk of poverty or social exclusion (11.6% in 2019) is well below 
the EU average (21.1%), but low-skilled workers, migrants and persons with disabilities are more 
likely to  be at  risk of poverty or social exclusion. While the Finnish social security system has 
cushioned  relatively  well  the  impact  of  the  crisis  so  far,  its  continuation  could  accentuate  the 
disparities.  

Flagged as a vulnerability in the Alert Mechanism Report 2021, private-sector debt, already 
high  before  the  crisis,  is  expected  to  increase  further.  As  aggregate  demand  fell,  companies 
increased  their  liquidity  needs  to  bridge  the  crisis  period.  Household  debt  remains  above  its 
prudential  level.  The  banking  sector  remains  well  capitalised  and  stable.  Due  to  abundant 
liquidity, interest rates remain low and there is no immediate pressure to reduce the private-sector 
debt.  

The economic slump due to the COVID-19 pandemic caused a marked fall in  government 
revenue and a rise in government spending. Together with the cost of related fiscal measures, 
the crisis pushed the general government deficit to 5.4% of GDP in 2020. Measures adopted in 
seven supplementary budgets in 2020 amounted to about 3% of GDP, or EUR 7.1 billion. They 
included spending on healthcare and public safety, but the bulk of the measures was designed to 
support  the  economy.  Companies  were  offered  targeted  subsidies  and  tax  deferrals  and  the 
government  extended  the  unemployment  benefit  schemes  to  facilitate  short-term  layoffs.  The 
emergency  fiscal  measures,  together  with  the  pre-existing  tax-benefit  system,  have  cushioned 
about 3/4 of the shock.3￼ The government also made new investments in transport, research and 
education.  It  extended  public  guarantees  and  took  other  measures  to  support  liquidity  in  the 
economy, amounting to about 20% of GDP.  

In  2021,  public  finances  still  incur  costs  of  the  pandemic.  The  government  continues  some 
measures  related  to  the  pandemic,  in  particular  the  support  for  businesses  and  employees.  The 
health-related costs, such as testing for COVID-19, also continue. Furthermore, the government 
is expecting to incur some losses from its loan guarantees. According to the plan, public finances 
are  forecast  to  remain  in  deficit  by  about  4.7%  of  GDP  in  2021.  In  2022,  the  public  health 
situation  is  expected  to  normalise,  and  economic  growth  should  help  improve  public  finances. 
The general government deficit is projected to decrease below the Treaty reference value of 3% 
of  GDP,  assuming  no  policy  change.  The  public  debt  ratio  increased  by  around  10  percentage 
points in 2020, reaching 69.2% of GDP, driven by the general government deficit and measures 
that are not factored into the deficit, such as tax deferrals, loans and recapitalisations. The debt 
ratio is projected to reach 71.6% of GDP in 2021. 

3 See JRC121598 and Christl, M, De Poli, S., Figari, F., Hufkens, T., Leventi, C., Papini, A. and Tumino, A. (2021) “The 
cushioning effect of fiscal policy in the EU during the COVID-19 pandemic”, JRC Working Papers on Taxation and 
Structural Reforms, 02/2021, JRC125567. 

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Finland  is  currently  assessed  as  facing  low  fiscal  sustainability  risks  in  the  medium  term 
and  medium  risks  in  the  long  term.4  The  Commission’s  S0  indicator  signals  a  high  risk  of 
fiscal stress in the short term, i.e. in the coming year. This stems from the sharp deterioration of 
public  finances  in  2020  and  the  resulting  surge  in  financing  needs,  reaching  18%  of  GDP. 
However,  Finland  is  currently  benefiting  from  advantageous  access  to  financial  markets,  with 
negative  yields  and  oversubscriptions  on  government  short-  and  medium-term  debt  securities. 
The ‘AA+’ sovereign rating given by the three major credit rating agencies and the historically 
low sovereign spreads  mitigate the short-term risks. Moreover, financing  needs are expected to 
fall to around 15% of GDP in 2021 and 14% in 2022. Low risks in the medium term reflect the 
fact  that,  under  the  baseline  assumptions  adopted  in  the  Commission’s  debt  sustainability 
analysis, the government debt would peak at 71% of GDP in 2021 and fall close to 60% of GDP 
in 10 years’ time. Alternative scenarios, both favourable and unfavourable, broadly confirm these 
low risks. However,  Finland has a high stock of  government  guarantees,  which  are  a source of 
potential fiscal cost in the event they are called in. Finally, the assessment of sustainability risks 
in  the  medium  and  long  term  does  not  yet  fully  incorporate  the  impact  of  reforms  and 
investments  under  the  RRF.  These  are  expected  to  support  potential  growth,  mitigating  debt 
sustainability risks. 

The  macroeconomic  scenario  underpinning  Finland’s  plan  is  slightly  more  cautious  than 
the  latest  Commission  2021  spring forecast.  The  Commission  2021 summer  forecast  expects 
real GDP in Finland to grow by 2.7% in 2021 and 2.9% in 2022. Like the Finnish authorities, the 
Commission considers domestic demand to be the main factor generating growth in the recovery. 
The biggest difference lies in projections of gross fixed capital formation, with the Commission 
forecasting  a  rebound  in  2021  and  the  Finnish  authorities  forecasting  a  contraction.  Inflation 
projections are similar, but Finland makes more cautious labour market projections for 2021. The 
forecasts of the general government deficit and debt made by the Commission are similar to those 
set out in Finland’s plan up to 2022 (noting that the Commission’s forecast does not go beyond 
2022). 

The  macroeconomic  scenario  set  out  in  the  plan  relies  on  plausible  macroeconomic 
assumptions.  The  macroeconomic  scenario  set  out  in  Finland’s  recovery  and  resilience  plan  is 
based  on  the  independent  forecast  of  the  Economics  Department  of  the  Ministry  of  Finance 
published  in  May  2021.  Though  it  is  slightly  more  cautious  than  the  Commission’s  forecast,  it 
provides  a  similar  scenario  of  economic  recovery,  after  which  growth  gradually  reverts  to  its 
long-term potential rate. The macroeconomic and fiscal outlook continues however to be affected 
by high uncertainty related to the COVID-19 pandemic and its economic consequences.  

Table 2: Comparison of macroeconomic developments and forecasts 

4 Commission Debt Sustainability Monitor 2020, https://ec.europa.eu/info/sites/default/files/economy-
finance/ip143_en.pdf 

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2.2. Challenges  related  to  sustainable  growth,  cohesion,  resilience  and  policies  for  the 

next generation 

Finland  is  one  of  the  most  advanced  economies  in  the  EU  and  a  front-runner  in  digital 
technologies  and  clean  energy  innovation.  Nevertheless,  the  country  faces  major  challenges,  in 
particular falling productivity after its electronics sector contracted and a low employment rate in 
comparison with its Nordic neighbours. Reasons for this include skills mismatches, the complex 
benefit system, which creates barriers to taking up work, and health-related reasons. Investment 
remains low compared to its EU peers, excluding the construction sector.  

Smart, sustainable and inclusive growth  

The impact of a structural shift away from manufacturing to services has affected Finland’s 
aggregate productivity. Total factor productivity has stalled for several years and remains below 
that  of  Finland’s  Nordic  peers.  At  the  same  time,  low  investment  in  areas  that  most  support 
productivity  growth  (machinery  and  equipment,  including  information  and  communication 
technology  equipment,  and  intellectual  property  products)  could  hinder  the  return  to  higher 
potential growth. The low level of productive investment is expected to continue to be a drag on 
productivity, and therefore on non-cost  competitiveness.  In terms of research, development and 
innovation,  Finland’s  productive  investment  is  narrowly  concentrated,  with  an  increasing  gap5 
between  the  most  productive  firms  and  the  least  productive.  In  parallel,  there  is  potential  for 
further  increasing  cooperation  between  academia  and  businesses.  Equally,  there  seems  to  be 
scope to improve productivity growth by providing further incentives for business start-ups and 

5 Finnish companies that kept innovating in 2020 were far less affected by the COVID-19 pandemic, by almost 
halving the decrease in their income in comparison with non-innovative firms (JRC125490). 

8 

 
 
 
 
                                                           
support  their  access  to  finance  and  by  supporting  the  severely  hit6  touristic  sector  in  line  with 
Finland’s Tourism Strategy to be the most sustainably growing tourist destination in the Nordic 
countries. 

Labour shortages, especially in the information and communication technology sector, risk 
becoming  an  obstacle  to  investment  and  growth.  With  a  shortage  of  high-skilled  domestic 
employees, Finland also needs to attract high-skilled labour migrants in addition to implementing 
reskilling and upskilling measures. The key challenges are to facilitate international recruitment, 
streamline  and  expedite  the  application  process  for  residence  permits  and  provide  integration 
services.  

Social and territorial cohesion  

The  shrinking  workforce  is  expected  to  soon  affect  Finland’s  growth  potential.  Therefore, 
raising  the  employment  rate  to  levels  comparable  to  its  Nordic  neighbours  remains  a  major 
structural challenge. There is a need to integrate many groups of people into the labour market, 
especially low-skilled workers, workers close to  retirement, people with  a migrant  background, 
people with partial work capacity and persons with disabilities. Past employment measures have 
encountered some challenges, mainly due to the fragmentation of services. At the same time, the 
COVID-19  crisis  has  hit  hard  the  most  vulnerable  groups  in  the  workforce.  Beside  short‑term 
action  to  re-integrate  people  who  have  lost  their  jobs  due  to  the  crisis  into  the  labour  market, 
Finland needs to take measures to reduce structural unemployment. The causes of unemployment 
appear also  gender  and  age-specific. While the  gender pay  gap  remains  above the EU average, 
the  homecare  allowance  has  some  negative  impact  on  taking  up  work,  mostly  by  women,  and 
may hinder enrolment to formal childcare. 

A key challenge will be to simplify the social benefit system, while maintaining its capacity 
to reduce poverty and inequalities. The complex and fragmented benefit system creates barriers 
to  take  up  work.  It  also  lacks  the  flexibility  to  combine  part-time  income  with  benefits.  Key 
political decisions on the direction of the reform are yet to be taken. Investment in digitalisation 
is necessary to improve IT systems and procedures in the social benefit system. 

Territorial  cohesion  remains  a  challenge,  with  an  evident  regional  divide  between  the 
capital and the less developed region of North and East Finland. In terms of GDP per head, 
the Greater Helsinki region performs well above the EU average (144%) in 2019 and 1.5 times 
higher than the weakest North and East region, where GDP per head corresponds to 93% of the 
EU average. However, regional rates of people in employment and unemployed have continued 
to converge in recent  years, also during the pandemic. While the level of dispersion of NUTS2 
regional  employment  rates  has  remained  low,  according  to  national  statistics,  some  job  market 
challenges  remain  at  regional level,  mainly regarding workforce availability in  growth  sectors.3 
In North and East Finland, the current demand for jobs and investment is less favourable than in 

6 The Finnish tourism sector is responsible for around 11% of total national employment, with substantial regional 
differences (e.g. 20,5% for Åland and 15,5% for Pohjois-ja Itä-Suomi) (JRC121262). In 2020 arrivals dropped by 41% 
(Eurostat). 

9 

 
 
                                                           
the rest of the country. It will be important to ensure that investments included in the plan enable 
lagging regions to catch up with the rest of the country. 

Health, economic, social, and institutional resilience  

In  the  fast-ageing  Finnish  society,  the  costs  of  healthcare,  especially  long-term  care,  are 
forecast  to  weigh  increasingly  on  public  finances  and  therefore  to  pose  risks  to  the  long-
term  sustainability  of  the  social  and  healthcare  system.  Equal  access  to  healthcare  is  a  key 
challenge,  due  to  long  waiting  times  for  municipal  primary  healthcare  and  specialised  care  for 
people who do not have occupational healthcare or private health insurance. The level of out-of-
pocket payments is also higher than the EU average, affecting vulnerable groups. A reform of the 
social and healthcare system has been recently adopted, after having been on the government’s 
agenda  for  a  long  time.  The  aim  is  to  improve  cost  efficiency  and  equal  access  to  services. 
Consolidating the management of both social and healthcare services from fragmented and often 
financially weak municipalities at a higher level of governance could improve both efficiency and 
access. Moreover, existing regional disparities with the availability of health workforce indicate a 
heightened  risk  of  labour  shortages  within  the  next  decade.  Demand  for  long-term  care  is  also 
projected  to  increase  in  the  coming  decades  driven  by  the  ageing  of  the  population.  Due  to 
decentralisation,  the  interoperability  of  electronic  patient  records  is  not  always  sufficient. 
Investments  could  support  the  consolidation  and  integration  of  the  healthcare  IT  systems, 
contributing  thereby  to  efficiency,  the  smooth  flow  of  information  and  cross-sectoral  medical 
cooperation. 

The private-sector debt-to-GDP ratio remains above the threshold for the macro-imbalance 
procedure and prudential levels and is high compared with other EU Member States.  The 
private-sector  debt-to-GDP  ratio  rose  further  to  155.1%  of  the  GDP  in  2020  due  to  the  crisis. 
Banks remain financially stable, with strong capital positions and a solid record of debt servicing. 
Nevertheless,  recent  liquidity  measures  have  allowed  banks  to  take  on  more  risks.  Moreover, 
some companies from the hardest hit sectors might go bankrupt, which could lead to an increase 
in  the  ratio  of  non-performing  loans.  The  swift  establishment  and  implementation  of  the 
announced  credit  registry  could  strengthen  the  stability  of  the  financial  system.  In  parallel, 
effective  supervision  and  enforcement  of  the  anti-money  laundering  framework  needs  to  be 
strengthened.  Effective  supervision  requires  increased  human  resources  of  the  supervisory 
authority,  training  of  employees  and  appropriate  procedures  to  apply  the  risk-based  approach 
more effectively.  

There is also room to improve some aspects of the business environment such as permits and the 
level  of  entrepreneurship,  labour  market  institutions,  liberalisation  of  trade  in  the  pharmacy 
sector, administration of value added tax and strategic planning by amending the Land Use and 
Building Act.  

Policies for the next generation, children and young people, including education and skills.  

10 

 
 
Although  education  in  Finland  remains  among  the  best  in  the  EU,  there  are  signs  that 
performance  and  fairness  in  the  Finnish  education  system  are  deteriorating.  The  level  of 
basic skills remains comparatively high but has worsened in recent years. Results from the PISA 
2018 survey7 show a statistically significant decline of performance in science. The proportion of 
15-year-old  students  underachieving  also  increased,  even  though  remaining  below  the  EU 
benchmark level of 15% for each subject area. In addition, the difference in reading performance 
between  immigrants  and  non-immigrants  students  is  the  largest  in  the  EU.  At  the  same  time, 
regional  differences  in  key  education  indicators  are  increasing.  The  take-up  of  early  childhood 
education and care remains low by international comparison, and there are shortages of teachers 
in special education and kindergartens.8  

Reskilling and upskilling are key to maintaining the employability of the labour force and 
ensuring  that  supply  matches  the  demand  for  future  skills  in  an  increasingly  digital  and 
green economy. Finland has the highest uptake in adult learning in the EU, though participation 
is  concentrated  among  high-skilled  employees.  To  avoid  aggravating  the  socio-economic 
situation  of  the  most  vulnerable  groups  in  the  wake  of  the  COVID-19  crisis,  it  will  be  key  to 
address  the  skills  mismatches  and  digital  divide,  particularly  by  ensuring  that  disadvantaged 
learners  have  access  to  quality  education  and  training.  Investment  could  support  more  training 
and post-secondary education initiatives in the green and IT sectors. In parallel, reaching a higher 
post-secondary  education  achievement  target  will  require  making  sufficient  university  places 
available, in line with employment expectations in each sector and region. Finally, there is a need 
for  more  women  to  enrol  in  ICT  studies,  to  both  mitigate  gender  inequalities  and  respond  to 
labour shortages. 

2.3. Challenges related to the green and digital transition  

Green dimension  

The recovery and resilience plan should contribute to the green transition and at least 37% 
of the financial allocation needs to contribute to climate objectives. The measures in the plan 
should  contribute  to  achieving  the  2050  climate  neutrality  objective,  and  the  2030  energy  and 
climate  targets,  taking  into  account  Finland's  national  energy  and  climate  plan  (NECP).  They 
should  also  contribute  to  meeting  environmental  targets  for  waste,  water,  pollution  control, 
sustainable  mobility,  biodiversity  protection  and  restoration,  marine  and  water  resources,  and 
support the transition to sustainable food systems as well as to a circular economy as appropriate, 
while ensuring that nobody is left behind.  

Finland has  set an ambitious target  to achieve carbon neutrality by  2035 and become the 
world’s first  fossil-free  welfare  society.  Achieving  these  targets  will  require  a  comprehensive 
set of policies and measures that will affect the whole economy. Finland’s economy is one of the 

7 Organisation for Economic Co-operation and Development, PISA 2018 results. Volume II. 
https://www.oecd.org/pisa/publications/PISA2018_CN_FIN.pdf. 
8 European Commission, Country Report Finland 2020. 

11 

 
 
                                                           
most energy-intensive in the EU. Transport, energy and housing are the main sectors in Finland 
with scope for reductions in energy-related greenhouse gas emissions. Peat is still a major source 
of energy in  remote  and sparsely populated areas. Phasing out  peat  could  notably  contribute to 
Finland's  goal  of  achieving  carbon  neutrality  by  2035.  Substantial  investment  is  required  to 
achieve the planned transformation to carbon neutrality.  

Greenhouse gas emissions  

Finland is one of the EU Member States with the lowest greenhouse gas (GHG) emissions 
per capita. Between 1990 and 2019, Finland’s GHG emissions fell by 23%9 (or by 21% when 
including  land  use,  land  use  change,  and  forestry).  Finland  has  adopted  or  is  on  track  to  adopt 
ambitious  climate  policies,  including  an  overhaul  of  the  Climate  Change  Act,  an  overhaul  of 
energy taxation, a roadmap for achieving climate neutrality, a roadmap for sustainable transport 
taxation, and a roadmap for fossil-free transport. The country has also benefited from significant 
renewable  resources,  with  renewable  energy  sources  representing  about  40%  of  energy  end-
consumption, particularly originating from bioenergy, hydropower, wind power, ground heat, and 
solar  electricity.10  Finland  is  likely  to  meet  its  EU  commitments  but  will  need  to  adopt  and 
implement  additional  policy  measures  to  achieve  its  national  objective  of  carbon  neutrality  by 
2035.  

Finland’s 2030 target for greenhouse gas emissions not covered by the EU emissions trading 
system  (non-ETS)  is  to  achieve  a  39%  reduction  compared  to  2005  levels,  as  set  in  the 
Effort Sharing Regulation (ESR). Without additional measures, non-ETS emissions would only 
fall  by  24%  by  2030.  Finland  has  so  far  reduced  its  emissions  by  14%  since  2005.11  Non-ETS 
emissions  account  for  53%  of  total  GHG  emissions  in  Finland,  compared  to  59%  at  EU  level. 
Finland  also  intends  to  use  some  of  the  flexibility  provided  for  under  the  ESR,  including 
flexibility between the ETS and the ESR sector. It would use the maximum amount, i.e. 2% of 
2005 emissions per year or 6.9 million tonnes CO2 equivalent. The current long-term objective 
for  2050  is  to  reduce  Finland's  GHG  emissions  by  80-95%,  and  the  final  plan  aims  to  achieve 
carbon neutrality by 2035 and becoming carbon negative soon thereafter. 

Based  on  Finland’s  projections,  the  Commission  estimates  in  its  assessment  of  Finland’s 
2020  National  Energy  and  Climate  Plan  (NECP)  that  the  information  provided  in  the 
decarbonisation  plan,  existing  and  planned  policies  and  measures,  together  with  the 
indicated  use  of  flexibilities,  could  be  sufficient  for  Finland  to  meet  its  target.  If 
implemented,  the  additional  policies  planned  may  yield  significant  emission  reductions,  which 
are  particularly  needed  in  transport;  a  smaller  impact  is  expected  in  the  buildings  sector.  The 
NECP states that it is possible for Finland to avoid creating any land use, land-use change, and 
forestry debits, but does not clarify how and does not provide projections. It puts an emphasis on 

9 Climate Action Progress Report 2020, published by DG CLIMA in November 2020. 
https://ec.europa.eu/clima/sites/clima/files/strategies/progress/docs/com_2020_777_en.pdf 
10 Renewable energy - Ministry of Economic Affairs and Employment (tem.fi) 
11 Climate Action Progress Report 2020 published by DG CLIMA in November 2020, country profile Finland: 
https://ec.europa.eu/clima/sites/clima/files/strategies/progress/docs/fi_2020_factsheet_en.pdf 

12 

 
 
                                                           
bioenergy but does not cover in depth the sustainability of biomass or the impact on the carbon 
sink.  Finland  acknowledges  that  the  NECP  requires  an  update  to  factor  in  the  ambitious  2035 
carbon neutrality target, and that several policies and measures need to be prepared, adopted, and 
implemented  to  ensure  consistency  with  the  new  target.  However,  the  policies  and  measures 
presented in the NECP are not sufficiently quantified to ascertain whether Finland will meet its 
EU commitments and national objectives. 

Energy efficiency  

Achieving  climate  neutrality  by  2035  will  require  making  substantial  investment  in 
electricity  networks  and  in  the  energy  efficiency  of  buildings.  Strong  interconnections 
between  Finland,  the  other  Nordic  countries  and  the  Baltic  States  are  needed  to  ensure  a  well-
functioning  electricity  market  in  the  whole  region  and  to  increase  the  projected  contribution  of 
renewable energy to the energy mix. This requires additional investment in the electricity sector. 

Finland’s  national  contribution  for  energy  efficiency  in  2030  is  set  at  25  Mtoe  of  final 
energy,  translating  into  34.8  Mtoe  of  primary  energy  consumption.  In  its  NECP,  Finland 
explains  the  contribution  made  by  heavy  industries  with  a  high-energy  intensity  (such  as  pulp 
production,  biorefineries  and  data  centres)  to  the  expected  GDP  growth.  However,  it  does  not 
specify which policies and measures would mitigate the likely increase in energy use. The NECP 
describes  policies  and  measures  beyond  2020,  targeting  all  sectors.  Finland  has  included  in  its 
NECP  measures  for  the  transport  sector  (transport  fuel  taxation,  promoting  modal  shifts,  rail 
infrastructure  investments),  agriculture  and  waste  heat.  However,  energy  efficiency  is  not  the 
main objective of some of these measures and some have already been implemented. Due to the 
lack of an underlying methodology, it remains unclear whether these measures would provide a 
sufficient contribution to energy savings to meet the overall energy saving target12.  

The  Long-Term  Renovation  Strategy  2020-2050,  submitted  in  March  2020,  has  a  strong 
focus on the decarbonisation of buildings.  It  aims  at  reducing CO2 emissions  of the building 
stock completed by 2020 by 90% by 2050, and at cutting the energy consumption of residential 
and  non-residential  buildings  by  half  by  2050.  Measures  included  in  this  strategy  include  new 
legislation  to  support  the  implementation  of  energy  efficiency  policies,  voluntary  agreements 
among  companies  and,  in  the  public  sector,  update  of  the  Energy  Performance  Certification 
scheme.  Further  measures  include  subsidies  and  incentives  to  support  and  stimulate  deep 
renovation, the promotion of smart  energy systems, demolition of unused/vacant buildings, and 
accessible funding and financial instruments allocated to energy efficiency building renovations 
projects.  Finland  aims  at  making  the  building  stock  highly  energy  and  resource  efficient  and 
carbon neutral by 2035 and having all buildings (residential and non-residential) with an energy 
class C or above by 2050. Legislation has been adopted to abandon coal use in energy production 

12 Economidou, M., Ringel, M., Valentova, M., Zancanella, P., Tsemekidi Tzeiranak, S., Zangheri, P., Paci, D., Ribeiro 
Serrenho, T., Palermo, V. and Bertoldi, P., National Energy and Climate Plans for 2021-2030 under the EU Energy 
Union, EUR 30487 EN, Publications Office of the European Union, Luxembourg, 2020. 

13 

 
 
                                                           
as of 2029. Central government and municipalities will cease using oil heating by 2024, and in 
residential buildings, oil heating will be abandoned by 205013.  

Share of renewables in energy mix 

Finland  is  one  of  the  EU  Member  States  with  the  highest  share  of  renewables  in  energy 
consumption. The share of renewable resources in final energy consumption was 43.1% in 2019, 
already above its 2020 target of 38%. The major contributor to that achievement is heating and 
cooling  with  a  renewable  share  of  57.5%,  while  electricity  has  a  share  of  38.1%.  The  main 
sources  for  renewable  electricity  are  hydropower  and  solid  biofuels  (1240  and  1059  ktoe, 
respectively)  while  wind  energy  provides  505  ktoe  out  of  the  total  generation  of  renewable 
energy sources of 2903 ktoe. The major growth for the last ten years has occurred for wind and, 
to  a  certain  extent,  solid  biofuels,  while  the  share  from  hydropower  has  remained  mostly 
constant. 

Finland aims to contribute to the EU’s 2030 target for renewable energy by reaching 51% 
of renewable sources  in gross  final  consumption of energy.  This  contribution is  in  line with 
result calculated using the formula in Annex II to Regulation (EU) 2018/1999 on the Governance 
of the Energy Union and Climate Action (the ‘Governance Regulation’) setting out the national 
contributions for the share of energy from renewable sources. Continuous monitoring of progress 
and  possibly  additional  policies  and  measures  might  be  needed  to  ensure  the  achievement  of 
Finland’s 2030 target.  

In  recent  years,  the  generation  portfolio  of  Finland  and  its  neighbouring  countries  have 
undergone significant changes. The decommissioning of conventional thermal power plants at a 
time  where  there  has  been  a  significant  increase  in  onshore  renewable  energy  production 
increased the congestion on existing electricity interconnections with Sweden and challenged the 
adequacy  of  the  electricity  system.  The  increase  in  transmission  capacity  with  Sweden  is 
identified  as  a  Project  of  Common  Interest  (PCI)  under  the  Trans-European  Energy  Networks 
Regulation and is progressing well. In view of the ambitious national target for renewable energy 
and  the  ongoing  regional  cooperation  under  the  High-Level  Group  on  Baltic  Energy  Market 
Interconnection Plan (BEMIP HLG) on offshore renewable energy grid development in the Baltic 
Sea,  Finland  should  pursue  investments  that  reinforce  the  internal  grid  to  accommodate  the 
expected onshore and offshore renewable energy capacity in a coordinated approach. 

Biodiversity and zero pollution  

For  a  green  recovery,  Finland  should  invest  more  in  making  the  transition  to  a  circular 
economy.  The  investment  needs  include  improving  eco-innovation,  new  circular  business 
models, eco-design, and encouraging SMEs to stimulate behavioural change. Further investments 
in the waste sector are also needed. Finland needs to step up action to ensure compliance with the 

13 Zangheri, P. et Al., Progress of the Member States in implementing the Energy Performance of Building 
Directive, Publications Office of the European Union, Luxembourg, 2021, EUR 30469, ISBN 978-92-76-25200-9, 
doi:10.2760/914310, JRC122347. 

14 

 
 
                                                           
recycling targets for the post-2020 period, including reducing the high level of incinerated waste 
(59%  in  2017).  Public  and  private  investments  are  needed  for  waste  prevention,  product  reuse, 
separate collection as a precursor of quality  recycling and recycling. Moreover, projects  rolling 
out digital solutions for improved waste data collection, reporting and waste management would 
be  crucial,  as  would  capacity-building  projects  for  municipalities  to  put  into  practice  the 
necessary waste management reforms.  

Despite  Finland’s  overall  good  environmental  performance,  further  improvement  of  air 
and  water  quality  and  support  to  biodiversity-related  measures  is  needed.  This  is  key  to 
achieving  the  biodiversity  targets  under  the  EU  Biodiversity  Strategy  for  2030  (30% 
improvement in the conservation status of 30% of protected habitats and species and restoration 
targets). In particular, the transition out of peat extraction and further promotion of biodiversity-
friendly  sustainable  forest  management  and  low-impact  harvesting  technologies  in  the  forestry 
sector would be in line with Finland’s specific responsibility at EU level for the habitats and the 
species it hosts.  Investing in  restoring a  range of forested  and peat  areas  and implementing the 
management  measures  needed  on  the  Natura  2000  network  would  improve  Finland's  overall 
environmental performance. 

Sustainable transport  

The  transport  sector  accounts  for  20%  of  total  emissions  in  Finland.  Reducing  these 
emissions  will  be  key  to  achieving  the  country’s  carbon  neutrality  target.  Finland  has  set  an 
ambitious target of halving transport emissions by 2030, but Finland faces specific circumstances 
that complicate the situation: distances inside the country are large, it has a dispersed population 
and  a  cold  climate  with  harsh  winters.  Moreover,  public  transport  is  fragmented,  especially 
outside the main cities. This means there is no easy single solution to reduce transport emissions. 
The  clear  political  will  has  not  yet  been  translated  into  a  comprehensive  set  of  measures  to 
improve the transport system. 

The table below gives an overview of Finland's objectives, targets and contributions under 
the  Council  of 
Regulation 
11 December 2018 on the Governance of the Energy Union and Climate Action. 

the  European  Parliament  and  of 

(EU)  2018/1999  of 

15 

 
 
 
 
Table 3: Overview of Finland’s climate objectives, targets and contributions 

National targets and contributions  

Binding target for greenhouse gas 
emissions compared to 2005 under the 
Effort Sharing Regulation (%) 

National target/contribution for 
renewable energy: Share of energy from 
renewable sources in gross final 
consumption of 
energy (%) 

Latest 
available 
data 

2020 

2030 

Assessment of 2030 
ambition level 

-11% 

-16% 

-39%  As in ESR 

43.08% 

38% 

51% 

Adequate (51% is 
the result of RES 
formula) 

National contribution for energy efficiency: 

Primary energy consumption (Mtoe) 

Final energy consumption (Mtoe) 

32.1 

25.3 

35.9 

34.8 

Low 

26.7 

24.9 

Low 

Level of electricity interconnectivity (%) 

29% 

18% 

Above 
15% 

N/A 

Source: Assessment of the final national energy and climate plan of Finland, SWD (2020) 925 
final. 

Digital dimension  

The  recovery  and  resilience  plan  should  contribute  to  the  digital  transition  with  at  least 
20%  of  the  financial  allocation  contributing  to  digital  objectives.  The  measures  in  the  plan 
should,  inter  alia,  contribute  to  the  digital  transformation  of  the  economic  and  social  sectors 
(including  public  administration,  public  services,  and  the  justice  and  health  systems).  The 
objective of the measures in the plan should be to improve not only the competitiveness, but also 
the  resilience,  agility  and  security  of  companies  and  public  actors,  all  while  ensuring 
inclusiveness.  

16 

 
 
 
 
 
 
 
 
 
 
 
Figure 1: Digital Economy and Society Index 2020 – relative performance by dimension 

DESI 2020 - relative performance by dimension

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DESI

1 Connectivity 2 Human capital 3 Use of internet

services

4 Integration of
digital
technology

5 Digital public
services

Finland

EU

Finland is a digital leader in the EU. It ranks overall first amongst Member States in the 2020 
Digital  Economy  and  Society  Index  (DESI),  thanks  to  its  excellence  in  the  dimensions  human 
capital  (digital  skills)  and  use  of  internet  service.  Finland  performs  well  in  the  areas  of  digital 
public  services  and  the  integration  of  digital  technologies  in  businesses,  enabled  by  active 
cooperation between the public and private sectors and an active start-up scene. According to the 
2020  European  Index  of  Digital  Entrepreneurship  Systems  (EIDES),  Finland  is  the  leader  in 
terms of framework conditions for digital stand-ups, start-ups and scale-ups, and it ranks ahead of 
other Member States with respect to the availability of human capital14. Based on EIDES, Finland 
ranks  also  among  the  leaders  when  it  comes  to  formal  institutions,  regulation  and  taxation, 
including  public  services,  but  the  Finland’s  physical  infrastructure  remains  a  weakness  with  a 
view  to  promoting  digital  entrepreneurship.  In  the  EU  ecosystem  of  artificial  intelligence  (AI), 
Finland ranks 8th by number of AI players (firms, research and government institutions), hosting 
3.2% of all EU economic agents, and 3.4% of AI firms.15 According to DESI, Finland is the most 
advanced  on  the  uptake  of  cloud  services  (50%  of  companies,  compared  to  an  EU  average  of 
18%)  Finland  has  also  pioneered  data  sharing  and  data  spaces  initiatives,  in  particular  for 
health.16 Currently, education offer of advanced digital technologies by Finnish universities and 
bachelor's degrees is on average higher than in the EU.17 

14 Autio, E., Szerb, L., Komlósi, E.and Tiszberger, M. (2020), EIDES 2020-The European Index of Digital 
Entrepreneurship Systems, Nepelski, D. (ed.), JRC120727. 
15 JRC AI TES Dataset 2020.. 
16 See e.g.: https://findata.fi/en/. 
17 For example, the proportion of masters’ programmes at Finnish Universities teaching artificial intelligence, high-
performance computing, cybersecurity and data science are all considerablty above the EU average (Righi et al., 
2020). 

17 

 
 
 
                                                           
 
 
 
 
Despite  the  strong  digital  performance,  productivity  growth  remains  a  challenge,  which 
calls  for  further  investments  to  address  remaining  connectivity  gaps  to  fully  reap  the 
benefits of the digital transition. Continued action is needed to roll out high-speed connectivity 
and  to  improve  other  digital  infrastructure,  to  rationalise  logistics,  improve  productivity  and 
maintain economic activity in remote areas. With an overall connectivity score of 59.2, Finland 
ranks ninth in the EU. Commercial 5G services are already available in the centres of the biggest 
cities.  Coverage  is  good  in  most  of  the  country  for  mobile  broadband  (4G),  while  access  to 
broadband is limited in rural areas. Market players do not have sufficient incentives to invest in 
sparsely  populated  areas  of  the  country.  The  current  national  broadband  strategy  published  in 
2018, the ‘Digital  infrastructure strategy 2025’, envisages the construction of both  optical  fibre 
connections and wireless broadband connections.  

To  address  the  challenge  of  stalling  productivity  growth,  Finland  will  need  to  tackle  skill 
shortages  in  the  ICT  sector  and  foster  reskilling  and  upskilling  of  human  capital,  in 
particular in the area of digital skills. Finland ranks first among all Member States in the area 
of  digital  human  capital,  according  to  DESI.  However,  the  availability  of  a  digitally  skilled 
workforce does not seem to keep up with the growing demand for ICT specialists. While Finland 
has the highest percentage of ICT specialists in the labour force in the EU, 66.2% of companies, 
which  recruited  or  tried  to  recruit  an  ICT  specialist,  had  difficulties  doing  so  (EU  average: 
56.8%).  In  addition,  gender  imbalances  among  ICT  graduates  remain  a  challenge.  Addressing 
these  challenges  through  suitable  investments  and  reforms  of  the  educational  and  vocational 
system can help contribute to fostering stalling productivity growth in Finland.  

18 

 
 
Box 1: Progress towards the Sustainable Development Goals 

Sustainable Development Goals and the four dimensions underpinning the Annual 
Sustainable Growth Strategy.

The objectives of the Sustainable Development Goals have been integrated in the European 
Semester  since  the  2020  cycle.  This  provides  a  strong  commitment  to  sustainability  in  the 
coordination  of  economic  and  employment  policies  in  the  EU.  In  that  respect,  this  section 
outlines  Finland’s  performance  with  respect  to  SDGs  with  particular  relevance  for  the  four 
dimensions  underpinning  the  2021  annual  sustainable  growth  strategy  and  of  relevance  to  the 
recovery  and  resilience  plans,  namely  green  transition,  fairness,  digital  transition  and 
productivity,  and  macroeconomic  stability,  indicating  possible  areas  where  investments  and 
reforms in line with the objectives of the RRF could further accelerate the progress on the SDGs. 

Green transition 

Finland  performs  well  on  many  SDGs  related  to  the  green  transition.  Greenhouse  gas 
emissions  in  Finland  have  decreased  at  a  similar  pace  as  in  the  EU  as  a  whole  (-23%  in  2019 
since 1990). However,  Finland’s emissions in  sectors not  covered by the EU emissions trading 
scheme are still higher than the 2020 target. To achieve Finland's objective of carbon neutrality 
by 2035, emissions reduction measures will need to cover all greenhouse gas emissions sources. 
The share of renewables in gross final energy consumption was 43% in 2019, substantially above 
the EU average of 20%, mainly due to the use of hydropower, solid biofuels and wind. The share 
is expected to increase further, which would contribute to further progress on SDG 7 “Affordable 
and clean energy”, SDG 12 “Responsible consumptions and production”, and SDG 13 “Climate 

19 

 
 
 
action”.  The  country  can  still  improve  its  performance  in  terms  of  the  use  of  circular  material 
(SDG  11,  “Sustainable  cities  and  communities”  and  SDG  12,  “Responsible  consumption  and 
production”). 

Fairness 

Overall,  Finland  performs  well  on  the  indicators  measuring  the  fairness  of  society  and 
economy.  For  instance,  the  rate  of  people  at  risk  of  poverty  or  social  exclusion  was  15.6%  in 
2019,  well  below  the  EU  average  of  20.9%,  indicating  a  superior  performance  on  SDG  1  “No 
poverty”.  In  addition,  income inequalities in  Finland are  among the lowest  in  the  EU (SDG 10 
“Reduced inequalities”). However, high unmet healthcare needs pose  a challenge. The share of 
self-reported unmet needs for medical care was 4.7% in 2019, notably above the EU average of 
1.7%.  This  is  a  particular  issue  for  the  inactive  and  for  the  unemployed.  Addressing  those 
challenges would facilitate progress on SDG 3 “Good health and well-being”. 

Digital transition and productivity 

Overall, Finland performs well in terms of “Decent work and economic growth” (SDG 8) 
and “Industry, innovation, and infrastructure” (SDG 9). R&D spending in terms of GDP was 
2.8%  in  2019,  above  the  EU  average  of  2.2%,  while  investment  accounted  for  29.8%  of  GDP 
(EU average: 22.4%) in 2019. At the same time, further investments in digital infrastructure are 
needed  to  close  remaining  connectivity  gaps  throughout  Finland  and  thus  support  growth  and 
economic activity in remote areas. Moreover, while the workforce in  Finland is generally well-
equipped with digital skills, shortages and gender imbalances among ICT specialists leave further 
scope to improve the innovative capacity of the Finnish economy, in line with SDG 4 “Quality 
education”.   

Macroeconomic stability 

Finland  scores  very  well  on  indicators  related  to  “Peace,  justice,  and  strong  institutions” 
(SDG 16), where it scores high in a global context on the perceived absence of corruption. 
Together with its satisfactory performance on SDG 8 "Decent work and economic growth", this 
contributes to a strong business environment. 

3.  OBJECTIVES, STRUCTURE AND GOVERNANCE OF THE PLAN 

3.1. Overall strategy of the plan 

Finland’s  recovery  and  resilience  plan  aims  to  provide  investment  support  to  sectors  that 
are undergoing important reforms. Funds in the plan will help stimulate the transformation of 
the  economy  and  support  jobs  while  helping  to  speed  up  the  green  and  digital  transition.  This 
effort is crucial to realising Finland’s ambitious carbon neutrality target and to underpinning EU 
climate targets. Achieving carbon neutrality by 2035 will require large investments, in particular 
in  technology,  infrastructure  and  research,  development  and  innovation.  The  plan  therefore 
channels approximately 50% of the funds to green initiatives. 

The  plan  is  structured  around  four  policy  areas,  which  are  made  up  of  thirteen 
components.  In  addition  to  its  contribution  to  reaching  Finland’s  climate  targets,  the  plan 

20 

 
 
promotes  digitalisation,  research  and  innovation,  employment  creation  and  resilience  of  the 
health  care  system.  The  plan  includes  measures  to  enable  Finnish  companies  to  participate  in 
potential IPCEIs in the areas of micro-electronics and renewable hydrogen. In addition, it is noted 
that Finland presents the 800 MW electricity connector between Northern Finland and Northern 
Sweden  as  an  important  supporting  measure  to  provide  sufficient  network  capacity  for  the 
additional renewable energy that is expected to be generated in the medium to long term.  

The first policy area of the plan focuses on the green transition. Finland has set an ambitious 
goal  of  reaching  carbon  neutrality  by  2035  and  becoming  the  world's  first  fossil-free  welfare 
society. The first  policy  area includes five  components  that contribute to  the transition  towards 
carbon neutrality (P1C1 – Transformation of the energy system, P1C2  – Industrial reforms  and 
investments  in  support  of  the  green  and  digital  transition,  P1C3  -  Reducing  the  climate  and 
environmental impacts of the building stock, P1C4 - Low-carbon solutions for communities and 
transport  and  P1C5  -  Environmental  sustainability  and  nature-based  solutions).  Reforms 
presented  in  these  components  include  changes  to  the  Climate  Change  Act,  Energy  Aid 
Regulation, Nature Conservation Act and Waste Act. Investment measures in these components 
include  new  energy  technologies  and  related  infrastructure,  the  hydrogen  economy,  the 
decarbonisation  of  industries,  recycling  of  key  materials  and  industrial  side  streams,  reducing 
emissions of the building stock, including by replacing oil-based heating by low-carbon forms of 
heating, charging and refuelling low- and zero emissions vehicles and reducing pollution. 

The  second  policy  area  of  the  plan  aims  to  enable  Finland  to  make  full  use  of  the 
opportunities  of  the  digital  transition.  This  policy  area  includes  three  components  that 
contribute to the digitalisation of Finland's economy  and society (P2C1 – Digital infrastructure, 
P2C2  –  Accelerating  the  data  economy  and  digitalisation  and  P2C3  –  Digital  security).  The 
investment  in  broadband  connectivity  included  in  the  first  of  these  three  components  aims  to 
increase access to high-speed connections where those are not provided on a commercial basis. 
This  policy  area  also  aims  to  invest  in  the  digitalisation  of  rail  services  to  replace  the  current 
system  for  traffic  control,  which  is  reaching  the  end  of  its  lifecycle.  Moreover,  investments 
included in the second component of this policy area aim to foster the digitalisation of businesses 
and  the  public  sector  by  supporting  the  exchange  of  business  and  financial  information  in 
standardised  formats  that  allow  for  automated  processing.  In  addition,  the  component  includes 
investments in digital solutions to help Finnish companies attract foreign workers and offer their 
services internationally. The second component will also support research and innovation in key 
digital  technologies  with  relevance  for  strategic  autonomy  and  future  competitiveness.  Finally, 
the  third  component  in  this  policy  area  aims  to  increase  Finland’s  resilience  through  the 
development of cybersecurity solutions and tackling money laundering. 

The  third  policy  area  of  the  plan  aims  to  raise  the  employment  rate,  improve  the  skills 
levels  among  young  people  and  adults  in  view  of  the  twin  transition,  strengthen  RDI 
intensity,  and  promote  long-term  growth,  while  accelerating  the  recovery  of  the  sectors 
most affected by the COVID-19 crisis. The first component (P3C1 – Employment and labour 
market) aims to raise the employment rate and strengthen the functioning of the labour market. 
This will be done by increasing the effectiveness of the public employment services in providing 
job-seeking  support,  by  activating  older  people  through  abolition  of  additional  days  of 
unemployment  benefit  (the  so-called  “Unemployment  tunnel”),  by  strengthening  integrated 
21 

 
 
services  for  youth  in  Ohjaamo  one-stop-shop  centres,  and  by  providing  integrated  services  for 
people with partial work capacity in view of extending their working careers. Finland also aims 
to  attract  international  talent  by  streamlining  permit  procedures  for  labour  and  education-based 
migration, especially in sectors suffering from labour shortages, through a reform of the Alien’s 
Act. The second component (P3C2 – Upskilling and continuous learning) will enhance skills and 
improve employment opportunities through a reform of the continuous learning system, including 
through more integrated digital platforms and online services, and by increasing higher education 
study places in sectors suffering from labour shortages. Further objectives are to reduce learning 
gaps, increase equality in education, and support the smooth transition between working life and 
education,  therefore  ultimately  improving  the  employment  conditions  for  all.  Parallel,  the 
objective is also to digitalise and modernise the Åland islands higher education and continuous 
learning system.  

innovation 

in  research  and 

To  contribute  to  strengthening  RDI  intensity,  component  P3C3  –  RDI,  Research  infrastructure 
and  piloting  proposes  two  investment  packages  that  aim  at  promoting  the  green  transition  and 
infrastructure  supporting  sustainable  growth  and 
investing 
digitalisation. Finally, component P3C4 – Strengthening competitiveness and boosting growth in 
crisis-impacted  sectors  aims  to  raise  export  capabilities  of  the  economy  and  digitalisation  by 
making sector-specific investments that are based on Finland’s strengths and international market 
potential.  It  will  also  support  the  recovery  and  sustainable  renewal  of  the  cultural  and  creative 
industries and of the Finnish tourism industry, with the aim to increase innovation and export of 
services. 

The  main  objectives  of  the  fourth  policy  area  of  the  plan  are  to  remove  the  backlog  in 
provision  of  social  and  healthcare  services  caused  by  the  COVID-19  pandemic  and  to 
enhance  equal  access  to  social  and  healthcare  services  across  the  country.  This  will  be 
achieved by introducing new operating models, digital services and new approaches as well as by 
implementing the objectives of the social and healthcare reform (P4C1 - Strengthening access to 
social and healthcare services and increasing cost-effectiveness). The measures under the policy 
area  will  promote  the  implementation  of  the  basic  care  guarantee,  reduce  inequalities,  support 
earlier  identification  of  problems  and  more  effective  prevention,  and  improve  the  quality  and 
cost-effectiveness of social and healthcare services. A further objective is to improve the Åland 
islands digital social and healthcare information system. 

Table 4: Overview of the plan, its components and associated costs 

Policy Area 

Component 

P1: Green transition 

P1C1: Transformation of the energy system 
P1C2:  Industrial  reforms  and  investments  in 
support of the green and digital transition 
P1C3:  Reducing  the  climate  and  environmental 
impacts of the building stock 
P1C4:  Low-carbon  solutions  for  communities 
and transport 
P1C5:  Environmental  sustainability  and  nature-
based solutions 

22 

(EUR 

Costs 
million) 
318.7 
326 

110 

40 

30 

 
 
 
 
 
 
Policy Area 

Component 

P2:  Digitalisation  and 
data economy 

P2C1: Digital infrastructure 

(EUR 

Costs 
million) 
135 

the  data  economy  and 

P2C2:  Accelerating 
digitalisation 
P2C3: Digital security 
P3C1: Employment and labour market 

62 

29.75 
170 

Raising 

P3: 
employment 
skills 
levels 
sustainable growth 

the 
rate  and 
to  boost 

P4: 
healthcare services 

Social 

and 

P3C2: Upskilling and continuous learning 
P3C3: RDI, Research infrastructure and piloting 
P3C4:  Strengthening 
and 
competitiveness 
boosting growth in crisis-impacted sectors  
P4C1:  Strengthening  access 
healthcare 
effectiveness 

to  social  and 
cost-

increasing 

services 

and 

107.5 
267 
94 

404.8 

3.2. Implementation aspects of the plan  

Consistency with other programmes  

The Finnish plan provides justification for its consistency with the objectives and priorities 
of other initiatives, such as the National Reform Programme, the European Digital Agenda 
and  the  National  Energy  and  Climate  Plan.  The  proposed  measures  contribute  to  the 
implementation  of  the  European  Pillar  of  Social  Rights,  including  the  principles  on  gender 
equality,  equal  opportunities,  active  support  to  employment,  inclusion  of  persons  with 
disabilities, education, training and life-long learning, and equal access to healthcare, as well as 
other  EU  initiatives,  such  as  the  EU  Skills  Agenda,  the  EU’s  flagship  initiative  Reskill  and 
upskill,  the  Council  Recommendation  on  Vocational  Education  and  Training  (VET)  and 
Upskilling  Pathways,  and  the  Commission  Recommendation  for  Effective  Active  Support  to 
Employment  (EASE).  The  measure  supporting  the  integrated  youth  services  is  in  line  with  the 
Youth  Guarantee,  as  it  will  aim to  prevent  social  exclusion  of  young  people  and  improve  their 
employment  possibilities  by  strengthening  the  integrated  employment,  health,  social  and 
education  services  for  young  people.  The  Technical  Support  Instrument  provides  expertise  in 
building capacities to implement the Plan in a number of areas such as digitalisation of the public 
sector, sustainable growth and innovation. 

Consistency  with  the  challenges  and  priorities  identified  in  the  most  recent  euro  area 
recommendations  

The  Finnish  recovery  and  resilience  plan  is  consistent  with  the  challenges  and  priorities 
identified in the Council Recommendation on the economic policy of the euro area (EAR). 
The  plan  addresses  EAR  1  as  it  includes  measures  to  strengthen  the  coverage,  adequacy,  and 
sustainability of health and social protection systems for all (policy area 4). Measures in the plan 
also address EAR 2 as they strengthen productivity and employment (policy area 3) and provide 
support  to  private  investment  to  foster  the  green  and  digital  transitions  (policy  areas  1  and  2), 
23 

 
 
 
 
 
 
 
support job transitions, address labour market segmentation and address skills shortages (policy 
area 3). Measures in policy areas 2, 3 and 4 will strengthen the effectiveness and digitalization of 
public  administration,  the  health  system  and  public  employment  services,  in  line  with  EAR  3. 
The measures related to the data economy and information sharing will reduce the administrative 
burden for firms and improve the business environment. Finally, the plan contains a reform of the 
framework to prevent money laundering and terrorism financing, consistent with EAR 3 and 5.  

Governance 

The Ministry of Finance is responsible for the overall coordination of the plan and it acts as 
a  point  of  contact  with  the  Commission.  It  shall  monitor  the  implementation  progress  of  the 
plan as a central authority and in cooperation with the other ministries and bodies involved in the 
implementation. The Ministry of Finance shall also be responsible for control and audit and for 
the preparation of payment requests to the Commission, for ensuring the accuracy of the-related 
information  and  for  issuing  the  management  declarations.  Various  ministries  and  agencies  are 
responsible for the granting of subsidies, corrective measures to be taken and recoveries related to 
their respective administrative branches. The Ministry of Finance will collect information on the 
implementation  progress  and  on  the  achievement  of  milestones  and  targets  from  the  other 
ministries and authorities granting the aid via a common information system.  

Equality 

The  plan  contains  a  section  on  gender  equality  and  equal  opportunities  for  all,  which 
describes  the  impact  of  Covid-19  crisis  and  in  particular  challenges  related  to  gender 
equality, which is a crosscutting general objective of the plan in line with the European Pillar of 
Social Rights. The actions and measures in the plan are expected to contribute to addressing the 
described challenges and have direct and indirect impact on gender equality and on women. The 
plan also includes information on expected social impacts, including on persons with disabilities, 
persons  with  mental  health  problems,  older  people  and  migrants.  There  are  employment  and 
labour market reforms dedicated to developing more integrated services, which are available and 
accessible to all, and address the needs of disadvantaged groups. Other measures, including the 
acceleration  of  digitalisation  and  improving  regional  availability  of  high-speed  broadband 
connections, aim at facilitating location-independent work making it easier for women and men 
to reconcile work and family life.  

Consultation process 

The  preparatory  stages  of  the  Finnish  plan  were  marked  by  a  substantial  degree  of 
inclusion  towards  regional  administrations,  social  partners,  industry  and  business 
organisations,  non-governmental  organisations  and  educational 
institutions.  The 
consultations were arranged in various formats including regional and thematic events to inform 
the  participants  about  the  preparation  of  the  plan  and  to  hear  stakeholder  views  regarding  the 
needed funding priorities and the content of the plan.  

The  recovery  and  resilience  plan  provides  an  adequate  overview  of  the  stakeholder 
consultations  that  took  place  between  autumn  2020  and  spring  2021.  An  inter-ministerial 
coordination  group  has  consulted  social  partners,  regional  and  local  associations,  academia, 
educational institutions and various civil society organisations during a regional tour, the Growth 
Forum  and  other  stakeholder  events.  Ministries  have  also  received  written  statements  and 
24 

 
 
proposals from organisations and individuals. In addition, researchers have been consulted on the 
measurement of targets. The plan also provides adequate information on involvement of various 
stakeholders during implementation.  

Communication strategy 

The communication strategy is embedded in the broader context of the Finnish Sustainable 
Growth  Programme.  The  Ministry  of  Finance  is  coordinating  the  communication  efforts  and 
has already set up a network with representatives from all ministries. It has also discussed on a 
preliminary  basis  coordination  in  communication  efforts  with  the  Representation  of  the 
Commission.  The  website  of  the  Ministry  of  Finance  serves  as  a  primary  channel  to  provide 
continous  and  complete  information  on  the  preparation  and  the  implementation.  A  dedicated 
section under the Finnish Sustainable Growth Programme informs about Finland’s recovery and 
resilience plan and the process. It is envisaged to provide information on the measures included 
in  the  plan,  distribution  of  funding  over  time  and  practical  information  for  beneficiaries.  The 
communication involves a mix of formats, including media events and social media outreach.  

The  plan  indicates  a  clear  commitment  of  the  Finnish  authorities  to  adhere  to  the 
obligations on communication as per the regulation, in particular that projects be labelled as 
financed  by  the  RRF:  “Funded  by  the  European  Union–  Next  Generation”.  The  Ministry  of 
Finance  has  organised  a  communications  network, 
in  which  representatives  from  all 
implementing  ministries  have  been  invited  to  participate.  As  the  implementation  of  the  plan 
advances,  this  will  give  rise  to  additional  communication  opportunities;  it  will  be  up  to  the 
Finnish  authorities,  in  cooperation  with  the  Commission,  to  seize  such  opportunities.  The 
Ministry of Finance has committed to cooperate in communication with the Commission. 

State aid 

State  aid  and  competition  rules  fully  apply  to  the  measures  funded  by  the  Recovery  and 
Resilience  Facility.  Union funds channelled through the authorities of Member States, like the 
RRF funds, become State resources and can constitute State aid if all the other criteria of Article 
107(1)  TFEU  are  met.  When  this  is  the  case  and  State  aid  is  present,  these  measures  must  be 
notified and approved by the Commission before Member States can grant the aid, unless those 
measures  are  covered  by  an  existing  aid  scheme  or  comply  with  the  applicable  conditions  of  a 
block  exemption  regulation,  in  particular  the  General  Block  Exemption  Regulation  (GBER) 
declaring certain categories of aid compatible with the internal market in application of Articles 
107 and 108 TFEU18. When State aid is present and it requires notification, it is the duty of the 
Member  State  to  notify  State  aid  measures  to  the  Commission  before  granting  them,  in 
compliance  with  Article  108(3)  TFEU.  In  this  respect,  the  State  aid  analysis  carried  out  by 
Finland in the recovery and resilience plan cannot be deemed a State aid notification. In as far as 
Finland considers that a specific measure contained in the recovery and resilience plan entails de 
minimis aid or aid exempted from the notification requirement, it is the responsibility of Finland 
to ensure full compliance with the applicable rules. 

18 Commission Regulation 651/2014, OJ L 187, 26.6.2014, p. 1 

25 

 
 
                                                           
26 

 
 
 
 
Security self-assessment 

In accordance with Article 18(4) point (g) of Regulation (EU) 2021/241, the plan indicates 
that risk assessment and risk management plans are prepared for several measures linked 
to  digital  capacities  and  connectivity.  For  investments  in  connectivity  infrastructure, 
development  environments  for  6G,  artificial  intelligence  and  quantum  calculations,  as  well  as 
investments in cyber security exercises and trainings, the plan indicates that a risk assessment and 
risk  management  plan  are  prepared  for  each  project  and  that  security  risks  are  addressed 
throughout the project’s life cycle. For connectivity investments, the plan describes the national 
legislative  framework  that  takes  into  account  the  EU’s  toolbox  for  secure  5G  networks.  For 
instance,  devices  that  may  endanger  national  security  may  not  be  used  in  critical  parts  of  the 
communication  networks.  The  plan  also  indicates  that  the  realisation  of  cyber  security 
requirements will be ensured for the products and services associated with the project,  and that 
possible certification systems should be used, if necessary. Security requirements are planned to 
be  ensured  in  public  procurement  procedures  and,  where  necessary,  personnel  and  company 
security  clearance  procedures  should  be  applied.  Strategic  measures  mentioned  in  the  security 
self-assessment would need to be closely monitored during the implementation of the plan. 

4.  SUMMARY OF THE ASSESSMENT OF THE PLAN 

4.1. Comprehensive  and  adequately  balanced  response  to  the  economic  and  social 

situation  

The  Finnish  recovery  and  resilience  plan  constitutes  a  comprehensive  and  balanced 
response to  Finland’s economic and social situation and, given  the specific challenges and 
the size of the financial allocation, it is expected to bring an appropriate contribution to the 
six  pillars  referred  to  in  Article  3  of  the  Regulation,  namely  (i)  green  transition,  (ii)  digital 
transformation, (iii) smart, sustainable and inclusive growth, (iv) social and territorial cohesion, 
(v)  health  and  economic,  social  and  institutional  resilience,  and  (vi)  policies  for  the  next 
generation.  The  plan  contains  57  measures  (18  reforms  and  39  investments)  grouped  under  13 
components  structured  around  the  following  four  main  policy  areas:  (1)  green  transition,  (2) 
digital transformation, (3) employment and skills, research, development and innovation, support 
to companies and (4) social and healthcare.  Both the green and digital targets are met, with the 
green  target  exceeded  considerably.  All  pillars  are  covered  by  at  least  one  component,  while  a 
component may contribute to several pillars. The range of actions of the plan corresponds to the 
one  of  the  Facility  with  an  appropriate  overall  balance  between  pillars.  The  coverage  of  the 
Finnish plan’s components toward the six pillars is summarised in Table 5. Finland submitted its 
National Reform Programme on 27 May 2021. The information provided in the National Reform 
Programme  is  being  considered  and  jointly  assessed  in  this  Staff  Working  Document  together 
with the Recovery and Resilience Plan. 

27 

 
 
 
 
 
Table  5:  Coverage  of  the  six  pillars  of  the  Facility  by  the  Finnish  recovery  and  resilience 
plan components 

Green 
transition 

Digital 
transform
ation 

Smart, 
sustainable 
& inclusive 
growth 

Social and 
territorial 
cohesion 

● 

● 

● 

● 

● 

● 

● 

● 

● 

● 

● 

○ 

● 

● 

● 

● 

○ 

○ 

● 

○ 

 ○ 

○ 

● 

● 

● 

Health, 
and 
economic, 
social and 
institution
al 
resilience 
 ○ 

Policies 
for the 
next 
generati
on 

 ○ 

○ 

○ 

○ 

○ 

● 

P1C1:  Transformation  of 
the energy system 
P1C2:  Industrial  reforms 
and  investments  in  support 
of  the  green  and  digital 
transition 
P1C3: Reducing the climate 
and  environmental  impacts 
of the building stock 
P1C4: 
Low-carbon 
solutions  for  communities 
and transport 
Environmental 
P1C5: 
sustainability  and  nature-
based solutions 
P2C1: 
infrastructure 
P2C2:  Accelerating 
data 
digitalisation 
P2C3: Digital security 

the 
and 

economy 

Digital 

○ 

● 

○ 

○ 

● 

● 

● 

● 

● 

● 

○ 

○ 

and 

P3C1:  Employment  and 
labour market 
P3C2:  Upskilling 
continuous learning 
P3C3:  RDI,  Research 
infrastructure and piloting 
Strengthening 
P3C4: 
competitiveness 
and 
boosting  growth  in  crisis-
impacted sectors 
P4C1: Strengthening access 
to  social  and  healthcare 
services 
increasing 
cost-effectiveness 
Key: “●” investments and reforms of the component significantly contribute to the pillar; “○” the component 
partially contributes to the pillar 

and 

● 

○ 

○ 

● 

○ 

● 

● 

● 

● 

○ 

○ 

● 

● 

Pillar I: Green transition  

Accelerating  the  green  transition  is  the  major  focus  of  the  plan.  The  measures  supporting 
climate objectives account for an amount which represents 50,3% of the RRP's total allocation. 
This  is  consistent  with  the Finnish  government’s ambitions to  reach carbon neutrality by 2035. 
28 

 
 
 
 
 
 
  
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The measures in the plan are also aligned with the national energy and climate plan (NECP) for 
2021-2030,  especially  with  respect  to  its  targets  on  reducing  GHG  emissions  and  on  achieving 
carbon neutrality by 2035. Such measures include notably reforms and investments boosting the 
share of renewables in the energy mix, decarbonisation of industry, reducing emissions of public 
and private buildings and promoting low-emission forms of transport.  

The green transition policy area of the plan contains five components that each contribute 
to a different dimension of the challenges related to the green transition. This corresponds to 
analysis  showing  that  emissions  reduction  measures  will  need  to  address  all  greenhouse  gas 
emissions  sources  to  achieve  the  carbon  neutrality  objective19.  The  main  sources  of  total 
emissions in Finland are the energy supply sector (31% of the total emissions), transport (20%), 
manufacturing  (12%)  and  buildings  (7%)20.  Each  of  these  sectors  are  addressed  in  dedicated 
components in the Finnish plan. The plan also includes a dedicated R&D&I component (P3C3), 
with  over  70%  of  the  investments  earmarked  to  the  green  transition,  focussing  in  particular  on 
hydrogen, clean energy and high-value bioproducts as well as data analytics and social sciences 
related to resilience and climate change adaptation.   

The plan has a prominent focus on the promotion of clean energy production, with reform 
efforts to phase out the use of coal and a reform of energy taxation. The dedicated component 
(P1C1) also includes investments in new energy technologies and energy infrastructure (system 
integration,  storage  and  transport).  A  sizable  effort  is  made  to  accelerate  the  reduction  of 
industrial emissions by the measures included in component P1C2. This component includes the 
reform  of  the  Climate  Change  Act  setting  ambitious  emission  reduction  targets,  complemented 
by  industry-specific  roadmaps  which  should  contribute  to  the  achievement  of  the  government's 
target of climate neutrality by 2035. Support is foreseen for the production and storage of clean 
hydrogen  within  the  framework  of  planned  IPCEIs,  aimed  to  support  investments  along  the 
hydrogen value chain as well as in carbon capture, storage and recovery. Other measures promote 
the  direct  electrification  and  low-carbon  industrial  processes  in  the  industrial  sector.  The  plan 
also steps up efforts to promote the circular economy and the use of recycled material, through a 
combination of reforms such as the Waste Act, as well as investments in the promotion of reuse 
and  recycling  initiatives,  focussing  in  particular  on  industrial  side  streams  such  as  the 
bioeconomy or the battery value chain.  

The  plan  contributes  to  decarbonisation  in  the  built  environment  and  in  the  transport 
sector.  Component  P1C3  includes  reforms  to  legislate  and  finance  low-carbon  technologies  in 
the  buildings  sector,  including  the  replacement  of  oil  heating  in  private  and  public  buildings. 
Component P1C4 contributes to the reduction of greenhouse gas emissions in the transport sector 

19 Finland country report 2020, SWD/2020/525 final  
20 Sectoral GHG emissions: https://www.eea.europa.eu/data-and-maps/data/data-viewers/greenhouse-gases-
viewer   

29 

 
 
                                                           
 
by  reforming  the  transport  taxation  system  and  by  supporting  the  roll-out  of  recharging  and 
refuelling infrastructure for cleaner forms of transport. The component promotes the construction 
of  a  private  electric  car  charging  station  infrastructure,  including  in  private  buildings,  the  lack 
thereof  having  been  identified  as  one  of  the  bottlenecks  that  hampers  the  incentive  for  electric 
vehicle ownership. This is complemented by component P1C5 which focuses on environmental 
sustainability  by  modernising  the  Nature  Conservation  Act  and  investing  in  nutrient  recycling 
initiatives.  

Pillar II: Digital transformation  

The plan fully covers the second pillar in its different dimensions, with several components 
targeting the digital transformation directly or indirectly. While Finland is a world leader in 
digital transformation, the plan is expected to address the remaining gaps in digital infrastructure, 
notably  high-speed  broadband  networks.  Moreover,  reforms  and  investments  in  the  plan  are 
expected to  support the  digitalisation of businesses, in  particular SMEs,  and to  further enhance 
digital  skills  through  a  comprehensive  continuous  learning  reform.  The  Real-Time  Economy 
(RTE) programme aims to help create common solutions and structures to facilitate the exchange 
of digital financial data between organisations in a structured machine-readable format (such as 
e-invoices, e-receipts, procurement documents and financial statements), in line with the vision of 
a ‘real-time economy’. 

A sizable effort is dedicated to the digitalisation of public services. Measures range from data-
driven innovation to the digitalization of rail services and smart energy systems. The introduction 
of  the  European  Rail  Traffic  Management  System  (ERTMS)  on  the  entire  national  network  by 
2040,  along  with  the  4G  and  5G-based  Future  Railway  Mobile  Communication  System 
(FRMCS)  will  help  ensure  that  rail  services  are  fit-for-future.  Other  investments  support  the 
ongoing reform efforts in the employment, social and healthcare domains, with a strong focus on 
the transformative potential  of digitalisation, e.g. upskilling and re-skilling, the digitalisation of 
public  employment  and  social  and  healthcare  services  and  in  support  of  secure,  interoperable 
information  exchanges  between  competent  authorities  in  the  field  of  financial  supervision  and 
anti-money laundering. 

The  plan  also  fosters  research,  development,  and  innovation  in  the  digital  domain,  while 
supporting  the  development  of  cyber  and  information  security.  This  is  complemented  by 
investments  in  key  digital  technologies  such  as  6G,  AI  and  quantum  computing,  including 
through contributions to the planned IPCEI in microelectronics. 

Pillar  III:  Smart,  sustainable  and  inclusive  growth,  including  economic  cohesion,  jobs, 
productivity,  competitiveness,  research,  development  and  innovation,  and  a  well-functioning 
single market with strong SMEs  

The plan extensively covers the third pillar, as all components directly contribute to smart 
and  sustainable  growth.  In  this  regard,  the  plan’s  focus  on  promoting  the  green  and  digital 
transitions will help the economy to grow on a more sustainable path. The initiatives funded by 
the plan are estimated to slightly increase GDP, employment and productivity over the medium 

30 

 
 
and long term. Finland is already among the best-performing EU countries as regards developing 
and taking up environmental technologies, and its competitiveness and trading performance can 
be further strengthened by the plan. 

Competitiveness and productivity are also expected to benefit from several other measures 
in  the  plan  that  support  research,  innovation,  and  development  of  key  green  and  digital 
technologies for the future. The plan’s focus on industrial decarbonisation is likely to contribute 
to  industry  competitiveness  in  the  medium  term.  A  modernised  and  interoperable  digital 
infrastructure  will  give  people  and  businesses  better  access  to  public  services  and  data-driven 
innovation and improve efficiency. At the same time, the investments in key digital technologies 
under component P2C2 such as Real-Time Economy, 6G, AI and quantum computing, including 
through  contributions  to  the  planned  IPCEI  in  microelectronics  (see  above)  are  expected  to 
contribute to safeguarding Europe’s competitiveness and to improving its productivity. 

impact  of  the  demographic  challenge  and 

The  measures  proposed  under  component  P3C1  are  expected  to  contribute  to  raising  the 
employment  rate  to  the  declared  objective  of  75%  and  productivity,  and  thereby  to 
offsetting  the  negative 
improving  the 
sustainability  of  public  finances.  The  proposed  measures  respond  to  the  specific  challenges 
caused by the COVID-19 pandemic, especially for vulnerable groups, but the primary focus is on 
long-term  structural  reforms,  in  line  with  the  employment  priorities  of  the  government.  The 
adoption and implementation of the Nordic model of public employment services and the phasing 
out  of  the  additional  days  of  unemployment  benefits  for  older  people  (the  so-called 
“unemployment tunnel”) are both expected to have a positive impact on employment. In parallel, 
the  facilitation  of  work-  and  education-based  immigration  is  targeted  at  attracting  international 
talent  and  should  thereby  contribute  to  both  employment  and  productivity  growth,  two  of 
Finland’s major challenges.  

Component  P3C3  is  expected  to  contribute  to  RDI  intensity.  It  is  expected  to  contribute  to 
raising the share of RDI expenditure in Finland from 2,9% (2019) to 4% of GDP by 2030, while 
stepping  up  cooperation  within  public  RDI  entities  and  between  public  and  private  entities 
involved  in  RDI,  including  at  international  level.  The  package  promoting  green  transition 
includes investments for supporting projects of leading companies, accelerating key sectors and 
strengthening competence in key sectors, and for supporting innovative growth companies. The 
package  promoting  innovation  and  research  infrastructures  includes  investments  for  the 
development  of  local  research  infrastructures,  national  research  infrastructures  and  innovation 
infrastructures.  

In  P3C4,  the  plan  also  includes  measures  to  help  businesses,  in  particular  SMEs,  to  grow 
and to trade goods and services across borders, with a particular focus on high potential growth 
sectors  and  targeted  support  to  sectors  hard  hit  by  the  COVID-19  pandemic,  including  tourism 
and  the  cultural  and  creative  sector.  These  measures  are  in  line  with  the  objectives  of  the  twin 
transition and are expected to support a well-functioning internal market and help deliver on the 
EU’s Industrial Strategy. 

Pillar IV: Social and territorial cohesion 

31 

 
 
Measures  in  the  plan  also  aim  at  addressing  the  regional  divide  and  at  fostering  social 
inclusion.  Under component  P1C3, measures  to  stimulate the replacement  of oil-based heating 
systems  in  private  and  public  buildings  by  heating  systems  based  on  low-  or  zero-carbon 
technology are expected to temporarily boost local jobs and investment, contributing thereby to 
territorial  cohesion.  At  the  same  time,  support  to  the  replacement  of  oil  heaters  is  likely  to  be 
particularly relevant for households with limited financing opportunities. Indeed, renovations will 
reduce  energy  bills,  which  absorb  a  larger  proportion  of  less  wealthy  households’  income, 
contributing thereby to social cohesion. 

Several  proposed  measures  are  expected  to  positively  contribute  to  cohesion  and 
convergence  by  addressing  existing  regional  differences  in  provision  of  public  services, 
including IT and e-government services.  Increased access to and higher quality of broadband 
services in remote areas under component P2C1 is expected to help maintain economic activity 
and  increase  productivity  with  positive  benefits  for  territorial  cohesion.  Moreover,  digital 
healthcare innovations under component P4C1 have the potential to benefit people living in less 
densely  populated  areas  with  longer  distances  to  access  social  and  healthcare  services.  The 
broadband initiative (P2C1), which promotes high-speed internet access in rural areas, will also 
contribute to this objective. 

Social cohesion is promoted with all measures directly contributing to the implementation 
of the European Pillar of Social Rights, especially the Nordic model of public employment 
services  and  measures  integrating  in  the  labour  market  the  young,  persons  with  partial 
work  capacity,  and  persons  with  disabilities.  The  reform  of  continuous  learning  and  its 
digitalisation  are  expected  to  improve  employment  opportunities  of  working  age  people, 
including those belonging to under-represented groups. Improved cohesion is also expected to be 
achieved  with  the  integrated  one-stop-shop  services  for  youth,  and  extension  of  the  integrated 
work capacity and mental health services to new regions. Furthermore, improved social cohesion 
will be achieved with the implementation of measures that promote equal access to healthcare. 

Pillar  V:  Health,  and  economic,  social  and  institutional  resilience,  with  the  aim  of,  inter  alia, 
increasing crisis preparedness and crisis reaction capacity  

Measures in the plan are consistent with the necessity for Finland to address weaknesses in 
its healthcare system. While Finland has shown a general readiness to deal with the COVID-19 
crisis, its health system could benefit from being made more resilient. To improve equal access to 
social  and  healthcare  services,  the  proposed  measures  aim  to  gradually  reduce  the  delays  (or 
“care debt”) accumulated during the COVID-19 crisis and contribute to the implementation of the 
7-day care guarantee. In parallel, investments in strengthening prevention and early identification 
of health problems  with  the help  of e-services and in  digital  innovations  for social welfare  and 
health  care,  combined  with  the  further  extension  of  the  high-speed  broadband  networks,  are 
expected to  contribute to  addressing unmet medical  needs, especially in  more remote areas. As 
regards  the  risks  for  the  sustainability  of  the  social  and  healthcare  system  posed  by  the  ageing 
population,  the  Finnish  government  has  established  a  knowledge-based  and  impact-based 
steering  group  with  a  view  to  reinforce  the  cost-effectiveness  of  the  system.  Investments  to 

32 

 
 
promote the introduction of an upgraded system for monitoring the care  guarantee in  all health 
centres will contribute to this objective.  

Institutional resilience is expected to be fostered through the development of the residential 
and  commercial  property  information  system  and  through  measures  against  money 
laundering  and  terrorism  financing.  Under  component  P2C2,  the  development  of  a  central 
register  for  housing  company  loans  has  been  planned.  Information  on  housing  company  loans 
shall be transmitted to the planned positive credit data register, helping to address private over-
indebtedness  and  contributing  thereby  to  Finland’s  financial  stability.  In  parallel,  component 
P2C3  includes  a  reform  and  accompanying  investments  into  the  effective  enforcement  of 
measures  against  money  laundering  and  terrorism  financing.  This  is  complemented  by 
investments  to  support the  digitisation  of  public administration  and  to  promote  better  access  to 
data and interoperable digital infrastructure. The component also envisages actions to enhance the 
public sector cybersecurity capacities, which are key to detect and respond to cyberattacks. 

Pillar VI: Policies for the next generation, children and the youth, such as education and skills  

The Finnish RRP also addresses education and skills in view of the twin transition. The plan 
includes a reform of the continuous learning system and the digitalisation elements thereof. This 
is expected to ensure the acquisition of labour market relevant skills that are key to maintaining 
the  employability  of  the  labour  force  in  an  increasingly  digital  and  green  economy.  More 
integrated digital platforms and online services are planned and expected to play a crucial role in 
this  respect.  At  the  same  time,  specific  efforts  are  also  made  through  strengthened  Ohjaamos 
service points, a new intermediate labour market operator, an expanded work ability programme 
(WAP)  and  the  expanded  individual  placement  and  support  model  (IPS)  to  facilitate  the 
integration  of  young  people  and  people  with  partial  work  capacity,  including  persons  with 
disabilities,  into  the  labour  market  by  addressing  their  specific  social,  healthcare  but  also 
education needs. 

To reach the new tertiary education attainment target, the plan foresees support measures 
to  increase  the  availability  of  higher  education  study  places.  Emphasis  is  placed  on  sectors 
most  affected  by  labour  shortages,  including  the  STEM  (science,  technology,  electronics, 
mathematics)  sector  and  more  specifically  the  information  technology  or  IT  sector.  In  parallel, 
the objective of the plan is  also  to  digitalise and modernise the Åland islands higher education 
and continuous learning system. 

Conclusion 

Taking  into  consideration  all  reforms  and  investments  envisaged  by  Finland,  its  recovery  and 
resilience  plan  is  expected  to  represent,  to  a  large  extent  a  comprehensive  and  adequately 
balanced response to the economic and social situation, thereby contributing appropriately to all 
six pillars referred to in Article 3 of the RRF Regulation, taking the specific challenges and the 
financial  allocation  of  Finland  into  account.  This  would  warrant  a  rating  of  A  under  the 
assessment criterion 2.1 in Annex V of the RRF Regulation.  

33 

 
 
4.2. Link with country-specific recommendations and the European Semester  

The  plan  is  ambitious  in  providing  a  response  to  a  broad  set  of  challenges  faced  by  the 
Finnish economy and society. It introduces reforms and investments aimed at strengthening the 
green  and  digital  transitions,  the  well-functioning  and  inclusivity  of  the  labour  market,  the 
resilience  of  and  access  to  healthcare,  and  the  investment  in  research  and  development.  Some 
CSRs,  e.g.  resilience  of  the  healthcare  system  and  improved  access  to  social  and  healthcare 
services (CSR 1.2-3 of 2020) or the establishment of the credit registry system (CSR 4.2 of 2019) 
are  being  or  have  been  addressed  to  a  large  extent  in  parallel  with  the  plan,  so  measures 
incorporated in the plan in these areas only have a complementary character. Table 6 at the end of 
the  section  presents  the  mapping  of  the  selected  challenges,  the  associated  CSRs  and  the 
components of the Finnish RRP. 

Public finance and financial sector 

Efforts  to  improve  cost-effectiveness  of  social  and  healthcare  services  are  included  in  the 
Finnish  recovery  and  resilience  plan  (CSR  1.2  2019).  Under  component  P4C1,  cost-
effectiveness  is  expected  to  improve  by  means  of  the  proposed  investments,  especially  those 
improving  data  and  evidence-base  for  decision-making,  and  the  planned  digital  and  phone 
services.  Management  solutions  include  the  development  and  implementation  of  advanced 
knowledge management and analytics solutions. These are expected to enable a better control and 
national  monitoring  of  the  service  packages  and  improve  the  cost-effectiveness  of  the  service 
system. 

Finland’s  plan  includes  reform  measures  related  to  the  establishment  of  a  comprehensive 
credit registry system (CSR 4.2 2019). Draft legislation setting up the already announced credit 
registry system is expected to be submitted to Parliament by spring 2022. In parallel, the Finnish 
plan entails the establishment of a central register for housing company loans. The latter register 
constitutes a necessary complementary element, as information on housing company loans shall 
be transmitted to the positive credit register, helping contain the current private over-indebtedness 
and  fostering  financial  stability.  Common  procedures  concerning 
the  availability  of 
administrative information on housing companies have been defined in  a project  carried out by 
the  Ministry  of  Agriculture  and  Forestry  and  the  National  Land  Survey  of  Finland,  and  a  data 
distribution  channel  is  provided  from  the  residential  and  commercial  property  information 
system. 

Healthcare and long-term care 

Efforts to improve resilience and equal access to social and healthcare services are included 
in  the  Finnish  recovery  and  resilience  plan  (CSR  1.2  2019  and  CSR  1.2-3  2020).  The 
elements announced in the plan are complementary to the social and healthcare reform (SOTE) 
adopted  by  the  Finnish  Parliament  on  23  June  2021.  In  particular,  the  measures  addressing  the 
care  guarantee  are  expected  to  improve  equal  access  to  social  and  healthcare,  as  they  aim  to 
change  patterns,  provide  new,  digital  solutions,  ensure  early  identification  of  problems,  and 
develop low-threshold social and health services. The shortage of health workers is addressed to 
some extent in the plan through the digitalisation of health services. However, under policy area 
3,  the  increase  in  higher  education  places  related  to  sectors  suffering  from  labour  shortages  is 

34 

 
 
expected to have a positive impact on the shortage of health workers in the medium-term. If the 
proposed measures are implemented successfully as a complement to ongoing national measures, 
they are expected to contribute to improving equal access to social and healthcare services, and in 
addressing the shortage of health workers. 

Labour market integration and skills 

All  measures  under  the  P3C1  component  aim  to  support  employment  and  strengthen  the 
functioning of the labour market (CSR 2.1 2019 and CSR 2.1 2020). The main objective of 
the  component  is  to  raise  the  employment  rate  and  strengthen  the  functioning  of  the  labour 
market.  This  is  proposed  to  be  done  through  a  structural  reform,  a  Nordic  model  of  public 
employment  services,  and  digitalisation  of  the  public  employment  services  by  phasing  out  the 
extended  unemployment  benefits  to  older  people  ahead  of  the  statutory  retirement  age  by 
facilitating work- and education-based immigration, and by promoting labour market integration 
of young people and people with partial work capacity. The Nordic model of public employment 
services  and  the  gradual  removal  of  the  additional  days  of  unemployment  benefits  for  older 
people  (the  so-called  ‘unemployment  tunnel’)  include  activation  elements  and  contribute  to 
providing incentives to accept work. However, the RRP does not include measures supporting the 
ongoing social security reform, mainly because it is a long-term reform that will be implemented 
over two government terms, and the key political decisions on the direction of the reform are not 
expected before 2023. Nevertheless, commitments to this reform are reflected in the narrative of 
the  plan  (Chapter  1)  and  in  its  Annex  5  (Finland’s  National  Reform  Programme).  At  the  same 
time,  the  setting  up  of  the  income  registry,  important  for  addressing  bureaucratic  traps  in 
combining work income and social benefits, has been completed.  

Components P3C1 and P3C2 of the plan contribute to enhancing skills, including through 
streamlined processes for work- and education-based immigration and through a reform of 
the  continuous  learning  system  (CSR  2.2  2019).  Under  component  P3C1,  the  proposed 
streamlining of the administrative procedures for processing residence permit applications based 
on work and education is aimed to attract international talent. The reform is expected to increase 
immigration of skilled workers and to improve the opportunities for international degree students 
to  find  employment  in  Finland.  Consequently,  the  reform  shall  contribute  to  addressing  labour 
shortages  in  specific  sectors,  notably  by  supplying  experts,  students  and  researchers  in  leading 
and  growth  sectors.  The  measures  proposed  under  P3C2  are  expected  to  contribute  to  the 
ongoing  continuous  learning  reform  to  enhance  skills  for  the  labour  market,  especially  in  the 
context of the twin transition, including for those in the under-represented groups with low skills. 
The  proposed  increase  of  at  least  600  new  places  in  universities  and  universities  in  applied 
sciences  in  sectors  affected  by  labour  shortages  (e.g.  engineering,  IT,  social  and  healthcare 
professions), is expected to contribute to supporting employment of skilled workers in the long-
term.  

A substantial part of component P3C1 is focused on improving integrated services for the 
unemployed and the inactive as well as on bolstering active labour market policies (CSR 2.3 
2019  and  CSR  2.2  2020).  This  is  particularly  the  case  for  the  Nordic  model  of  public 
employment services, the one-stop-shop Ohjaamo youth services and the planned work capacity 
related  services:  the  New  Intermediate  Labour  Market  Operator,  the  extension  of  the  work 

35 

 
 
capacity programme and of the  Individual  Placement and Support  services for people suffering 
from mental health disorders as well as mental health services for individuals and work places.  

Investment and innovation policies  

Component P3C4 of the plan provides liquidity to the real economy, in particular to small 
and  medium-sized  enterprises  and  promotes  private  investment  to  foster  the  economic 
recovery  (CSR  3.1&3  2020).  The  planned  grants  schemes  in  this  component  totally  support 
SME  development,  innovation  and  investments  needed  for  digital  and  green  transition  in 
particular  on  clean  and  efficient  production  and  use  of  energy,  sustainable  and  efficient 
infrastructure as well as research and innovation. In parallel, the front-loading of mature public 
investment  projects  (CSR  3.2  2020)  and  focusing  investment  on  sustainable  and  efficient 
infrastructure are partially  addressed.  Indeed, several  large investment  projects  (high speed line 
Turku-Helsinki,  high speed line Tampere-Helsinki,  high speed line Helsinki  to  national airport, 
completing the electrification of railways, etc.) will be financed from national budget and other 
EU sources (Connecting Europe Facility).  

Components  in  Policy  areas  2  and  3  are  part  of  Finland’s  efforts  to  offset  the  gradual 
decline in research and innovation that was registered over the last decade after the setback 
of  the  country’s  IT  sector  and  address  the  recommendation  to  focus  investment-related 
economic policy on research and innovation (CSR 3.1 2019 and CSR 3.6 2020). Under P2C2 
Finland  aims  to  fund  applied  RDI  activities  and  the  infrastructure  supporting  them,  i.e.  testing 
and  experimentation  environments,  related  to  microelectronics,  5G/6G  technologies,  artificial 
intelligence or quantum technology, and thus contributing to the digital transition. Under P2C3, 
Finland  is  planning  to  support  applied  research  on  cyber  security,  with  the  aim  to  develop  a 
platform for teaching and developing  cybersecurity skills.  Moreover, the  objective of the P3C3 
component is to contribute to strengthening RDI intensity, raising the share of RDI expenditure 
in  Finland from  2,9% (2019) to  4% of GDP by 2030 and increasing the ambition level  of RDI 
activities, in line with the National Roadmap for Research, Development and Innovation adopted 
in  spring  2020.  To  this  end,  the  component  proposes  two  investment  packages  that  aim  at 
promoting green transition and at investing in research and innovation infrastructure supporting 
sustainable growth and digitalisation.  

Measures  proposed  under  Policy  area  1  of  the  plan,  as  well  as  a  number  of  measures  in 
policy areas 2 and 3, contribute to the implementation of recommendations to invest in the 
green transition (CSR 3.2-3 2019 and CSR 3.4-5 2020). This includes the recommendations on 
focusing investment-related policy on low carbon and energy transition and sustainable transport 
and those on energy transition, in particular on clean and efficient production and use of energy 
as  well  as  on  sustainable  and  efficient  infrastructure.  Component  P1C1  includes  several 
investment measures  to  support the production and distribution of clean  and renewable energy. 
This consists of investment in energy transmission and distribution to increase the capacity on the 
energy network to support the growing share of renewable sources of energy in Finland's energy 
mix, as well as investments in new energy technologies. Component P1C2 focuses investment on 
the transition to a low-carbon economy by supporting the electrification and decarbonisation of 
industrial  processes,  including  by  investing  in  hydrogen  to  replace  fossil  fuels.  Investments 
included  in  component  P1C3  aim  at  reducing  the  emissions  of  the  building  stock  through  the 
introduction of a grant  scheme for the replacement  of fossil-oil boilers by  low-carbon forms  of 
36 

 
 
heating  as  well  as  a  low-carbon  built  environment  programme.  Regarding  investment  in 
sustainable  transport,  sustainable  and  efficient  infrastructure,  component  P1C4  includes  two 
investment measures to increase investment in sustainable transport by incentivising investments 
in  electric  and  low-carbon  vehicles.  Moreover,  component  P2C1  contributes  to  the  ’Digirail-
Digirata’ initiative, which aims at modernising rail traffic management. In addition, several large 
investment  projects  will  be  financed  from  national  budget  and  other  EU  sources  including  the 
Connecting  Europe  Facility.  Moreover,  component  P3C3  includes  a  package  of  investment 
measures  to  provide  R&D&I  funding  to  support  the  green  transition,  including  by  supporting 
public  and  private  research  organisations  as  well  as  locomotive  and  growth  enterprises 
developing low-carbon climate change adaptation and coping activities.  

Policy areas 2, 3 and 4 of the plan are expected to contribute to the digital transformation in 
Finland  and  to  sustainable  and  efficient  infrastructure  (CSR  3.4-5  2020).Component  P2C1 
emphasises  digital  infrastructure,  with  investments  aiming  at  developing  the  quality  and 
availability of communications networks and at the digitalisation of rail services. Funding from 
the Facility will be used to increase the coverage and quality of broadband connections in rural 
areas. This component also supports the introduction of the European Rail Traffic Management 
System (ERTMS) on the entire Finnish network, as the current system will reach the end of its 
lifetime by the end of the current decade. Component P2C2 includes reforms and investments to 
support  data-driven  innovation,  the  exchange  of  digital  information  and  research  in  key 
technologies in order to increase Finland’s competitiveness. Measures in component P2C3 aim to 
help  create  a  comprehensive  framework  for  addressing  cyber  and  information  security  issues, 
which  is  a  prerequisite  for  a  successful  digital  transition.  Pillar  3  includes  four  components 
focused  on  employment  policy  and  R&D&I.  On  the  employment  side  (components  P3C1  and 
P3C2),  a  digital  information  system  for  public  employment  services  will  be  developed. 
Investment  will  also  take  place  to  accelerate  the  handling  of  work  and  residence  permits.  An 
extensive  programme  will  aid  the  development  of  digital  services  and  information  resources  to 
support  continuous  learning.  The  development  of  existing  and  new  digital  services  are  also 
expected  to  increase  the  innovation  capacity  of  higher  education  and  facilitate  access  to  digital 
educational services. On the business and innovation side (components P3C3 and P3C4), the plan 
will  contribute  to  the  renewal  and  development  of  national  research  infrastructures  with  an 
emphasis  on  the  objectives  of  the  green  and  digital  transition.  The  plan  also  focuses  on 
accelerating the growth of Finnish micro and small enterprises, including through the promotion 
of new digital solutions. Moreover, component P4C1 aims to introduce digital innovations in the 
form of a care guarantee service, which will deliver digital solutions to support the development 
of social and healthcare services and promote the implementation of the care guarantee. 

Public administration and business environment 

Component P2C3 of the plan includes measures that are expected to help ensure effective 
supervision  and  enforcement  of  the  anti-money  laundering  framework  (CSR  4  2020).  The 
reform  aims  at  facilitating  the  collection  and  exchange  of  information  between  the  competent 
authorities  for  the  prevention  and  detection  of  money-laundering,  including  through  the 
automation  of  data  processing  and  analysis.  Support  will  be  provided  to  improve  the  data 
processing  within  the  supervisory  authority  as  well  as  the  exchange  of  information  among 
different  authorities,  and  to  implement  a  more  effective  risk-based  supervision  of  anti-money 

37 

 
 
laundering measures. The bank and payment accounts control system is planned to be amended to 
increase  the  efficiency  of  the  prevention,  detection  and  prosecution  of  money-laundering  and 
terrorist financing. Finally, the reform aims to improve the timeliness, coverage and accuracy of 
the register of beneficial owner.  

Response to the economic and social situation 

Medium  to  long-term  recovery  prospects  for  Finland  will  benefit  from  investments  to 
increase productivity and innovation, while the weak productivity growth observed before 
the crisis is also addressed through investments in people. The plan focusses on investments 
to  fasten  the  digital  transformation,  notably  in  sectors  that  will  help  the  country  increase 
competitiveness,  for  instance  development  environments  for  6G,  artificial  intelligence  and 
quantum calculations. Measures supporting skills across different population groups (in particular 
green  and  digital  ones)  and  a  more  effective  public  administration,  including  the  public 
employment  services  systems  and  tools,  are  expected  to  contribute  to  productivity  growth  by 
investing  in  people.  When  it  comes  to  innovation,  the  Finnish  RRP  also  seeks  to  reinforce  the 
private involvement in research and in industrial innovation. Overall, the measures planned in the 
Finnish RRP are expected to have a positive impact on economic activity against the background 
of considerable uncertainty.  

Conclusion 

Taking  into  consideration  the  reforms  and  investments  envisaged  by  Finland,  its  recovery  and 
resilience  plan  is  expected  to  contribute  to  effectively  addressing  all  or  a  significant  subset  of 
challenges  identified  in  the  country-specific  recommendations,  or  challenges  in  other  relevant 
documents officially adopted by the Commission under the European Semester, and the recovery 
and  resilience  plan  represents  an  adequate  response  to  the  economic  and  social  situation  of 
Finland. This would warrant a rating of A under the assessment criterion 2.2 in Annex V of the 
RRF Regulation. 

Table  6:  Mapping  of  country  challenges  identified  in  2019-20  country-specific  recommendations 
and the Finnish RRP components  

Country challenges 
(as identified in Section 2) 

Associated CSR (2019-
2020) and European 
Semester 
recommendations 

1
C
1
P

2
C
1
P

3
C
1
P

4
C
1
P

5
C
1
P

1
C
2
P

2
C
2
P

3
C
2
P

1
C
3
P

2
C
3
P

3
C
3
P

4
C
3
P

1
C
4
P

Public finance and the financial sector 

Cost-effectiveness of the 
healthcare sector 

Monitoring of private debt (and 
establishment of credit registry) 

2019.1.2 

2019.4.1-2 

  ○ 

  ○ 

Health and long-term care 

38 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Country challenges 
(as identified in Section 2) 
Healthcare resilience (including 
by addressing shortage of 
health workers) and improved 
access 

Associated CSR (2019-
2020) and European 
Semester 
recommendations 

2019.1.2, 2020.1.2-3 

1
C
1
P

2
C
1
P

3
C
1
P

4
C
1
P

5
C
1
P

1
C
2
P

2
C
2
P

3
C
2
P

1
C
3
P

2
C
3
P

3
C
3
P

4
C
3
P

1
C
4
P

  ● 

Labour market integration and skills 

Incentives to accept work and 
support to employment 

2019.2.1, 2020.2.1-2 

Enhancing skills 

2019.2.2, 2020.2.1 

Active inclusion and integrated 
services 

2019.2.3, 2020.2.2 

  ● 

○ 

● 

  ● 

Investment policies 

2020.3.3 

● 

Investment and innovation policies 

RDI 

  ● 

● 

○   

2019.3.1, 2020.3.6 

 Green transition 

2019.3.2-3, 2020.3.4-5  ● 

●  ● 

● 

● 

○   

  ○ 

○ 

○   

Digital transformation 

2020.3.4-5 

  ● 

● 

● 

●  ○ 

○ 

●  ● 

Public administration and business environment 

Anti-money laundering policies 

2019.1.2, 2020.1-2-3 

  ●   

Key: “●” investments and reforms of the component significantly address the challenge; “○” the 
component partially addresses the challenge 

4.3. Growth  potential,  job  creation,  economic,  institutional  and  social  resilience, 
European  Pillar  of  Social  Rights,  mitigating  the  impact  of  the  crisis,  and  social 
territorial cohesion and convergence  

Fostering economic growth and jobs 

The mix of investments and reforms presented by Finland is expected to stimulate growth 
through multiple channels, including improvements in total factor productivity, in line with 

39 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
the  EU  update  of  the  2020  new  Industrial  Strategy.21  Raising  the  long-term  productivity 
remains  an  issue  in  Finland.  In  recent  years,  growth  in  investment  mostly  materialized  in 
construction (e.g. in 2018, it accounted for 7.3% of gross value added) which has less long-term 
effects on productivity than equipment investment. Equipment investment (as % share in GDP) 
was  below  EU  average  in  recent  years.  The  RRP  includes  a  series  of  measures  determinedly 
targeted  at  productive  investment,  notably  equipment  and  intellectual  property  investment,  that 
are expected to support productivity. These measures can mostly be found under policy areas 1 
and 2 of the Finnish plan, but also under component P3C3 targeting research and innovation. 

In  particular,  investments  related  to  the  green  and  digital  transition  and  to  research  and 
innovation are set to support Finland’s long-term growth potential.  Measures related to the 
green transition, such as supporting the transformation of the energy system (component  P1C1) 
and support for the decarbonisation of industry (component P1C2) are expected to contribute to 
sustainable growth. They are also in line with Finland’s goal to become carbon neutral by 2035. 
The two planned ICPEIs on hydrogen and microelectronics, together with investments to develop 
and  deploy  the  next  generation  of  green  and  secure  digital  capabilities,  from  support  to  digital 
infrastructure (component P2C1) to the data economy and digitalisation (component P2C2), are 
expected  to  contribute  to  the  growth  potential  and  enhance  the  competitiveness  of  the  Finnish 
economy.  This  is  complemented  by  ambitious  R&D&I  investments,  notably  under  components 
P2C2 and P3C3, intended to stimulate innovation and innovative growth of companies. 

The  Finnish  authorities  estimate  that  GDP  will  increase  by  0.2  pps.  in  the  short  term 
compared  to  the  baseline  scenario,  in  the  medium  term  by  0.3  pps.,  while  the  long-term 
impact  will  be  up  to  0.8  pps.  of  GDP.  Finland  has  a  small  allocation  of  the  Recovery  and 
Resilience  Facility  in  relative  terms,  in  total  0.9%  of  GDP  (grants  only).  The  impact  of  the 
Finnish plan in the short term was calculated using the assumption of a short-run fiscal multiplier 
of 1, which is justified in the plan with references to the literature. The impact on GDP in short 
term is small but plausible. In the medium term, the plan also examines the impacts on potential 
output using EU commonly agreed methodology for the estimation of output gaps rather than a 
simple production-function framework. The size of the estimated impact is plausible. In the long 
term, the positive impact on potential output seems to decay rather fast, as table 2 in Chapter 4 of 
the  plan  reports  long-term  level  impacts  that  are  well  below  the  medium-term  impacts.  This  is 
also  below  estimations  done  by  the  QUEST  model.  The  Finnish  plan  does  not  include  the 
potential impact of the structural reforms proposed therein.  

According  to  the  Finnish  plan,  the  impact  of  the  measures  on  the  labour  market,  and  on 
potential  growth  in  the  longer-term,  is  positive.  The  labour  market  is  expected  to  improve 
compared to the baseline scenario, as employment would increase by 0.1 percentage point in the 
short and medium term and by up to 0.4 percentage points in the long term. In the plan there are 
specific  reforms  which,  if  implemented  successfully,  could  increase  the  impact  above  these 
estimations. 

21See European Commission, Updating the 2020 New Industrial Strategy, COM(2021) 350 final, 05.05.2021.  

40 

 
 
                                                           
The reform and investment measures proposed under P3C1 are expected to have a positive 
impact  on  growth  and  jobs  and  mitigate  the  economic  effects  of  the  crisis.  The 
implementation  of  the  Nordic  model  of  public  employment  services  (reform  P3C1R1)  is 
estimated  to  have  an  employment  impact  of  between  9500-10000  additional  people  in 
employment,  and  the  abolition  of  additional  days  of  unemployment  benefit  for  older  people 
(reform  P3C1R2)  is  expected  to  have  an  employment  impact  of  7900  additional  people  in 
employment (by 2029). Furthermore, unemployed people with partial work capacity targeted by 
investment  P3C1I1  represent  an  untapped  potential  for  raising  the  employment  rate,  while 
improving the employability of young people is a key investment in the future. Also, the measure 
addressing  labour  and  education-based  migration  is  important  in  view  of  the  demographic 
changes and the shrinking workforce. 

The  plan  contains  measures  to  improve  higher  education  outcomes  and  skills  of  working 
age people, with a positive impact expected on productivity and employment in the longer 
term. Component P3C2 contributes to growth and jobs, as the targeted reskilling and upskilling 
measures as part of the continuous learning reform, will improve the skills levels, and hence the 
conditions for employment, including for the under-represented groups in the labour market.  In 
parallel, the proposed increase of study places in universities and universities of applied sciences, 
mainly  in  sectors  affected  by  labour  shortages  (e.g.  engineering,  IT,  social  and  healthcare 
professions), is expected to contribute to employment and productivity growth in the longer term. 

Box 2: Stylised NGEU impact simulations with QUEST – Finland 

Model  simulations  conducted  by  the  Commission  using  the  QUEST  model  show  that  the 
economic impact of the NGEU in Finland could lead to an increase of GDP of between 0.4% and 
0.6% by 2026(22). After 20 years, GDP could be 0.1% higher. Spill-overs account for a large part 
of such impact.  

According to these simulations, this would translate into more than 8000 additional jobs. Cross-border 
(GDP) spill-overs account for 0.4 pps in 2026, showing  the value added of synchronised expenditure 
across Member States (line 2). Even in a scenario with a lower productivity of NGEU funds, it would 
still lead to a significant impact (line 3)(23).  

Table: QUEST simulation results (% deviation of real GDP level from non-NGEU case, linear 
disbursement assumption over 4 years) 

Scenario 

Baseline 

  of which spillover 

Low productivity 

2021  2022  2023  2024  2025  2026  2027  2028  2029  2030  2040 

0.5 
0.4 
0.2 

0.6 
0.4 
0.3 

0.6 
0.4 
0.3 

0.6 
0.4 
0.3 

0.6 
0.4 
0.3 

0.6 
0.4 
0.4 

0.5 
0.3 
0.3 

0.4 
0.3 
0.2 

0.3 
0.2 
0.2 

0.3 
0.1 
0.1 

0.1 
0.0 
0.0 

22 RRF amounts to roughly 90% of NGEU, which also includes ReactEU, Horizon, InvestEU, JTF, Rural Development 
and RescEU. 
23 Technically, the low productivity scenario considers a significantly reduced output elasticity of public capital. 

41 

 
 
 
 
 
 
                                                           
This stylised scenario does not include the possible positive impact of structural reforms, which 
can be substantial. A model-based benchmarking exercise shows that undertaking structural reforms 
that  would  result  in  halving  the  gap  vis-à-vis  best  performers  in  terms  of  indicators  of  structural 
reforms could raise Finland’s GDP by 13% in 20 years’ time, broadly in line with findings for the EU 
average (24). 
Due to differences in assumptions and methodology, the results of this stylised assessment cannot be 
directly compared to the numbers reported in chapter 4 of Finland’s RRP.  

Strengthening social cohesion 

The plan is expected to contribute to maintaining a high degree of social cohesion through 
increased  employment  in  rural  areas  notably  by  extending  digital  services.  Reform  and 
investment  in  digital  infrastructure  (component  P2C1)  is  expected  to  contribute  to  social 
cohesion.  In  particular,  under  investment  P2C1I1  “Developing  the  quality  and  availability  of 
communications  networks”,  the  planned  extension  of  optical  fibre  connections  and/or  wireless 
broadband  connections,  notably  to  rural  areas,  is  expected  to  contribute  to  social  cohesion 
through  higher  access  for  rural  population  to  the  labour  market,  notably  wider  teleworking 
possibilities, and to the social and healthcare systems and networks.  

The  measures  proposed  under  component  P3C1  contribute  to  the  implementation  of  the 
European Pillar of Social Rights. This notably includes the principles on gender equality, equal 
opportunities,  active  support  to  employment  and  inclusion  of  persons  with  disabilities.  In 
particular,  the  measure  supporting  the  integrated  youth  services  is  in  line  with  the  Youth 
Guarantee  (reform  P3C1R4),  as  it  will  aim  to  prevent  social  exclusion  of  young  people  and 
improve  their  employment  possibilities  by  strengthening  the  integrated  employment,  health, 
social and education services for young people. The measure is also in line with the Commission 
Recommendation  for  Effective  Active  Support  to  Employment  (EASE).  With  respect  to  the 
development  of  work  capacity,  productivity  and  well-being  at  work  (investment  P3C1I1),  the 
objective  of  the  investment  is  to  raise  the  employment  rate  by  increasing  the  participation  of 
people with partial work capacity, including persons with disabilities, in the labour market and to 
increase  the  employment  rate  by  enhancing  mental  health  and  work  capacity,  in  view  of 
extending working careers. 

The  measures  on  the  continuous  learning  reform  proposed  under  component  P3C2  also 
contribute to the implementation of the European Pillar of Social Rights. This includes the 
principles on education, training and life-long learning, gender equality and equal opportunities. 
The measures further contribute to implementation of other EU initiatives, such as the EU Skills 
Agenda,  the  EU’s  flagship  initiative  Reskill  and  upskill,  the  Council  Recommendation  on 
Vocational  Education  and  Training  and  Upskilling  Pathways,  and  the  EASE  Recommendation. 

24 Varga, J, in 't Veld J. (2014), “The potential growth impact of structural reforms in the EU: a benchmarking 
exercise", European Economy Economic Papers no. 541. 
http://ec.europa.eu/economy_finance/publications/economic_paper/2014/pdf/ecp541_en.pdf. 

42 

 
 
  
 
                                                           
The  measures  are  also  in  line  with  the  Youth  Guarantee,  as  they  aim  to  increase  the  skills  and 
qualifications of young people not in employment, education or training (NEET) and other young 
people, among other target groups, and ultimately improve their employment opportunities. 

Finally,  the  proposed  measures  under  component  P4C1  aim  to  improve  resilience  of  the 
social  and  healthcare  system,  hence  contributing  to  equal  access  to  care  in  line  with  the 
European Pillar of Social Rights. The measures contribute to the implementation of the social 
and healthcare reform and address both the care debt (delays) caused by the COVID-19 pandemic 
and the care guarantee, including through digital innovation. However, a balance will need to be 
ensured between digitalised and personalised social and healthcare services, especially for people 
in  more  vulnerable  positions,  as  they  may  not  have  the  same  possibilities  to  use  digitalised 
services. The plan does not provide any risk mitigation measures in this respect. 

Reducing vulnerability and increasing resilience 

The  on-going  digital  and  green  transition  will  encourage  a  diversification  of  the  Finnish 
economy  and  will  be  a  key  factor  conducive  to  resilience  towards  external  shocks.  These 
aspects  appear  to  be  well  covered  in  the  plan  and  will  be  instrumental  in  fostering  economic 
recovery.  

In  particular,  investment  in  digital  infrastructure  in  P2C1I1  is  expected  to  further  boost 
Finland’s  already  strong  economic  resilience.  Regarding  GDP  and  COVID-19,  Finland  has 
been among the least affected countries in the EU and has had milder restrictions compared to the 
continental Europe. Moreover, strong reliance on teleworking in the peak of the crisis (more than 
elsewhere)  has  limited  the  fall  in  output.  Already  prior  to  the  crisis,  office  workers  could 
occasionally telework albeit on a smaller scale. Furthermore, during the pandemic, the switch to 
teleworking  accelerated  the  digitalisation  trend.  The  planned  extension  of  digital  infrastructure, 
notably the further rolling out of optical fibre connections and/or wireless broadband connections 
under the RRF (investment P2C1I1), notably to rural areas, is expected to reinforce the trend and 
to  further  strengthen  the  resilience  of  the  Finnish  economy.  The  further  increase  in  digital 
economy  is  expected  to  become  persistent  and  should  in  principle  feed  into  an  increase  in 
resilience and long-term productivity, even though these factors could be mitigated by reduction 
in capital (for example through business exit cascades). 

Measures  under  component  P3C4  partly  aim  at  fostering  recovery  in  the  tourism  sector 
and  cultural  and  creative  industries,  which  were  most  affected  by  the  COVID-19  crisis. 
Calculations of the sectoral impact of the pandemic on value added, persons employed and hours 
(measured  as  the  deviation  from  the  pre-COVID  trend)  show  that  hours  worked  have  been 
affected  especially  in  the  trade  and  tourism  sectors  as  well  as  in  arts  and  entertainment. 
Compared to the EU27, real estate and professional services were less hit.  

Cohesion and convergence 

Initiatives  to  maintain  the  world-class  level  of  its  public  sector  by  a  continuous 
modernisation  and  digitalisation  of  services  are  conducive  to  territorial  cohesion.  In 
addition, the measures proposed under component P3C1 are expected to positively contribute to 
cohesion  and  convergence,  especially  through  more  integrated  public  employment  services, 
extension  of  the  integrated  work  capacity  and  mental  health  services  to  new  regions,  and 

43 

 
 
introduction  of  more  integrated  one-stop-shop  youth  services.  The  measures  on  continuous 
learning proposed under component P3C2 are expected to positively contribute to cohesion and 
convergence, as digitalisation of continuous learning will allow studies regardless of the physical 
location. Furthermore, the measures proposed to improve resilience of the social and healthcare 
system (component P4C1) address existing regional disparities in provision of health services.  

44 

 
 
 
 
Box 3: Employment and social challenges in light of the Social Scoreboard 
accompanying the European Pillar of Social Rights 

The  Social  Scoreboard  supporting  the  European  Pillar  of  Social  Rights  points  to  an  overall  good 
performance but also some challenges in Finland. Prior to the COVID-19 pandemic, Finland was on a steady 
path to increase the employment rate, which reached 77.2% in 2019, but dropped to 76.5% in 2020. In parallel, 
the  unemployment  rate  increased  from  6.7%  to  7.8%,  slightly  above  the  EU  average.  While  the  emergency 
measures  taken  by  the  government  have  moderated  the  impact  of  the  crisis,  certain  groups,  especially  young 
people,  have  been  affected  most.  In  2020,  the  rate  of  15-24  year  old  not  in  education,  employment  or  training 
(NEET) was 9.3%, compared to 8.2% the year before. On the positive side, the gender employment gap remained 
among the lowest in the EU, at 2.7 pps in 2019 and 2.9 pps in 2020. Also, the risk of poverty and social exclusion 
is among the lowest in the EU, with only a slight increase from 15.6% in 2019 to 16.0% in 2020.  

The impact of social transfers on poverty reduction is 
among the highest in the EU at 54.0% in 2019. While 
there was a slight decrease in 2020, the social protection 
system has cushioned  well  the impact of  the pandemic, 
especially  on  low-income  earners.  Income  inequalities 
are among the lowest in the EU. The impact of the child 
homecare  allowance,  which 
to  parents 
(predominantly  women)  when  a  child  is  under  3  years 
old,  is  estimated  to  have  some  negative  impact  on 
employment of women and hinder enrolment into formal 
childcare.  In  2019,  38.2%  of  children  less  than  3  years 
were in formal childcare (slightly above the EU average 
of 35.3%). Finland is introducing a family leave reform 
to  increase  equality  in  working  life,  and  to  narrow  the 
gender pay gap (16.6% in 2019). 

is  paid 

times 

long  waiting 

Self-reported unmet needs for medical care remain a 
challenge.  The 
for  primary 
healthcare and specialised care concern especially those 
not  covered  by  occupational  and  private  healthcare 
insurance  and  those  in  the  lowest  income  quintile,  of 
whom 5.4% reported unmet needs in 2019, compared to 
2.8%  in  the  highest  income  quintile.  Due  to  the 
pandemic,  there  has  been  an  increase  of  self-reported 
unmet  needs  from  4.7%  in  2019  to  5.4%  in  2020.  The 
recently  adopted  social  and  healthcare  reform  and  the 
planned  7-day  care  guarantee  for  non-urgent  care  are 
expected  to  improve  access  to  care.  The  availability  of 
health  workers  will  pose  a  key  challenge  in  the  next 

decade due to population ageing.  

Finland performs well on upskilling and reskilling, particularly for digital skills. In 2019, 76% of 16-74 year 
old  had  basic  or  above  basic  digital  skills,  and  Finland  had  the  highest  uptake  in  adult  learning,  with  29.0%  of 
adults aged 25-64 having had a learning experience in the past 4 weeks (EU average is 10.8%). At the same time, 
adults with high skills participate in adult learning significantly more than adults with low skills. The country has a 
well-performing skill forecasting system to inform policies. After reforming the vocational education and training 
system, Finland is implementing a continuous learning reform since 2019, to increase opportunities for retraining 
and continuing professional development throughout the working life.  

45 

Critical situationTo watchWeak but improvingGood but to monitorOn averageBest performersEqual opportunities and access to the labour marketDynamic labour markets and fair working conditionsSocial protection and inclusionSocial Scoreboard for FINLANDEarly leavers from education and training (% of population aged 18-24) (2019)Youth NEET (% of total population aged 15-24) (Q2 2020)Gender employment gap (Q2 2020)Income quintile ratio (S80/S20) (2019)At risk of poverty or social exclusion (in %) (2019)Employment rate (% population aged 20-64) (Q2 2020)Unemployment rate (% population aged 15-74) (Q2 2020)Long term unemployment (% population aged 15-74) (Q2 2020)GDHI per capita growth (2019)Net earnings of a full-time single worker earning AW (2019)Better than averageMembers States are classified on the Social Scoreboard according to a statistical methodology agreed with the EMCO and SPC Committees. It looks jointly at levels and changes of the indicators in comparison with the respective EU averages and classifies Member States in seven categories. For methodological details, please consult the proposal for a Joint Employment Report 2021, COM(2020) 744 final; NEET: neither in employment nor in education and training; GDHI: gross disposable household income.Impact of social transfers (other than pensions) on poverty reduction (2019)Children aged less than 3 years in formal childcare (2019)Self-reported unmet need for medical care (2019)Individuals' level of digital skills (2019) 
 
The Recovery and Resilience Plan submitted by Finland addresses labour market, upskilling/ reskilling and 
social  and  healthcare  priorities  relevant  for  the  implementation  of  the  Pillar.  To  support  employment,  the 
plan  addresses  the  development  and  implementation  of  more  integrated  and  tailored  support  for  job  seekers, 
activation of older cohorts, digitalisation of public employment services, integrated one-stop-shop services for the 
youth, facilitation of labour and education-based  migration, and  work capacity, including through a  new labour 
market operator. Upskilling and reskilling of workers is addressed through support for the implementation of the 
continuous learning reform. The plan aims to improve equal access to social and healthcare services by reducing 
the  healthcare  backlog  caused  by  the  pandemic  and  supporting  the  implementation  of  the  care  guarantee.  Also, 
support will be provided to more integrated primary care services and digitalised health services. The plan is in 
full  synergy  with  ESF  funding,  for  which  the  main  priorities  are  improving  access  to  employment,  skills  and 
social inclusion.  

Conclusion 

Taking  into  consideration  all  reforms  and  investments  envisaged  by  Finland,  its  recovery  and 
resilience  plan  is  expected  to  have  a  high  impact  on  strengthening  the  growth  potential,  job 
creation, and economic, social and institutional resilience of the Member State, on contributing 
to the implementation of the European Pillar of Social Rights, including through the promotion 
of  policies  for  children  and  youth,  and  on  mitigating  the  economic  and  social  impact  of  the 
COVID-19  crisis,  thereby  enhancing  the  economic,  social  and  territorial  cohesion  and 
convergence within the Union. This would warrant a rating of A under the assessment criterion 
2.3 of Annex V of the RRF Regulation. 

4.4. The principle of ‘do no significant harm’ 

Finland’s  recovery  and  resilience  plan  assesses  compliance  with  the  ‘do  no  significant 
harm’ (DNSH) principle. The assessment follows the methodology set out in the Commission’s 
technical  guidance  on  the  application  of  ‘do  no  significant  harm’  under  the  RRF  Regulation 
(2021/C 58/01).  It  covers  the six environmental  objectives within the meaning of Article 17 of 
Regulation  (EU)  No  2020/852,  namely  climate  change  mitigation,  climate  change  adaptation, 
sustainable  use  and  protection  of  water  and  marine  resources,  circular  economy,  pollution 
prevention  and  control,  and  protection  and  restoration  of  biodiversity  and  ecosystems.  The 
environmental  impact  is  assessed  per  reform  or  investment.  Hence,  the  18  reforms  and  39 
investments in Finland’s recovery and resilience plan translate into 57 ‘do no significant harm’ 
assessments.  

Each DNSH assessment follows a two-step approach. The first step assesses whether there is a 
risk that a measure could do significant harm to one or more of the environmental objectives. In 
some cases, the assessment concludes that there is no risk of significant harm, in which case the 
measure  is  assessed  as  compliant  with  this  objective  of  the  Regulation.  This  is  the  case  for 
instance  for  measures  in  education  and  training,  labour  market,  or  health.  In  cases  where  the 
analysis  identifies  a  potential  risk  (including  industrial  policy,  energy  renovation,  sustainable 
mobility), a more detailed assessment is performed in which Finland demonstrates the absence of 
significant harm.  

Where needed, the requirements of the DNSH assessment are enshrined in the design of a 
measure and specified in a milestone or target related to this measure. This ensures that the 
fulfilment  of  the  respective  milestones  and  targets  can  only  be  positively  assessed  once 

46 

 
 
compliance  with  the  DNSH  principle  is  guaranteed.  This  includes  broad  support  schemes  that 
span  across  sectors  and  activities  (e.g.  in  R&D&I  or  industry  support).  For  instance,  to  ensure 
compliance with the ‘do no significant harm’ principle, the eligibility criteria for upcoming calls 
for  projects  under  measures  for  energy  infrastructure  (investment  PIC1I1)  and  new  energy 
technologies (investment P1C1I2) will exclude harmful activities and require that only activities 
that comply with relevant EU and national environmental legislation can be selected. Under these 
measures support may be provided to installations covered by the EU emissions trading system 
(ETS). DNSH compliance is ensured by the fact that only projects with  emissions substantially 
below ETS benchmark are eligible for support under the measures. The verification of the DNSH 
compliance of the investments  is  made binding through a milestone linked to  the launch of the 
call for proposals. A similar approach is followed for other broad funding schemes, such as in the 
measure  supporting  hydrogen  and  carbon  capture  and  recovery  (investment  P1C2I1),  and  the 
measures  for  investment  in  R&D&I  and  supporting  sustainable  growth  in  SMEs  included  in 
component P3C3 – RDI, research infrastructure and piloting.  

Finland’s recovery and resilience plan puts a particular focus on reducing emissions from 
energy  and  industry  (e.g.  in  components  P1C1  –  Transformation  of  the  energy  system, 
P1C2 – Industrial reforms and P1C2 – Industrial reforms and investments in support of the 
green  transition).  While  the  potential  for  emissions  reductions  is  large  in  these  sectors,  the 
construction of the relevant infrastructure has potential impacts on biodiversity depending on the 
location where the relevant infrastructure is constructed. Finland ensures no significant harm to 
the  biodiversity  objective  by  detailing  in  the  plan  for  the  relevant  measures  that  environmental 
permits  will  only  be  granted  to  projects  that  meet  the  requirements  of  the  Environmental 
Protection  Act,  the  Waste  Act  and  the  Nature  Conservation  Act.  For  the  hydrogen  measure 
included in component P1C2, only 'green’ low-carbon hydrogen projects are eligible.  

The  plan  includes  a  component  that  will  contribute  to  reducing  the  emissions  over  the 
lifetime  of  buildings  (P1C3  –  Reducing  the  climate  and  environmental  impacts  of  the 
building  stock).  This  component  includes  an  investment  measure  to  replace  existing  oil-based 
heating  systems  in  private  and  public  buildings  with  low-carbon  heating  systems  (mainly  heat 
pumps). The DNSH assessment ensures that the requirement of an improvement of at least 30% 
of greenhouse gas efficiency will be met and excludes the possibility of using fossil fuel-based 
heating  systems.  The  DNSH  assessment  of  this  measure  also  ensures  that  the  waste  generated 
under this programme shall be recycled. 

Another focus area in Finland’s recovery and resilience plan is digitalisation (policy area 2). 
Particularly  relevant  from  an  environmental  perspective  is  physical  investment  in  digital 
infrastructure  (component  P2C1  –  digital  infrastructure),  where  underground  cabling  may 
interfere  with  groundwater  resources.  No  significant  harm  to  the  water  and  marine  resources 
objective  is  ensured  in  Finland’s  recovery  and  resilience  plan  through  a  commitment  that  in 
groundwater  areas,  the  construction  of  communications  networks  must  take  into  account  plans 
and protective measures to prevent groundwater pollution. A separate permit for construction is 
required in these areas. 

The  plan  also  includes  reforms  to  the  social  and  healthcare  system  (policy  area  4).  The 
DNSH assessment has confirmed that their environmental impacts are rather negligible, ensuring 
that they do no significant harm to any of the six environmental objectives.  

47 

 
 
Particular  attention  is  paid  to  measures  whose  impact  on  environmental  objectives 
warrants close scrutiny. Component P1C5 – Environmental sustainability contains a measure to 
treat fields with gypsum to reduce the phosphorus load of agriculture into the Baltic Sea and to 
promote the preservation of the carbon stock of arable land. In this context, Finland commits to 
the monitoring of the concerned arable lands and water bodies to ensure the absence of impacts 
on land and aquatic ecosystems and absence of adverse impacts on its carbon balance. In case any 
adverse  effects  are  identified,  Finland  commits  to  taking  appropriate  measures  to  ensure 
ecosystem and/or carbon balance recovery and the use of gypsum are prevented in the concerned 
area. Moreover, financing under this investment shall not be used to apply gypsum to grow food-
based  biofuel/bioenergy  crops.  While  studies  performed  on  similar  measures  in  the  past  have 
shown that the changes in concentrations are minor, their duration is short-term and no adverse 
effects  on  aquatic  organisms  have  been  observed  in  studies  and  water  monitoring,  Finland 
confirms  in  its  DNSH  assessment  that  application  sites  suitable  for  gypsum  will  be  clearly 
delineated,  and  gypsum  will  not  be  spread  to  lake  catchment  areas,  acid  sulphate  soils, 
groundwater areas or Natura 2000 sites. The other measure included in this component concerns 
climate-sustainable  measures  in  the  land  use  sector.  While  the  scope  of  this  measure  includes 
precision forestry projects, safeguards are included to ensure that no harm is done by  favouring 
mixed forests and strengthening forest biodiversity, for instance through increasing the amount of 
dead wood in the site. In the forests where continuous forest management methods are applied, 
there shall neither be clear cuts nor new or remedial ditching. 

Conclusion  

Taking  into  consideration  the  assessment  of  all  the  measures  envisaged,  no  measure  for  the 
implementation  of  reforms  and  investments  projects  included  in  Finland’s  recovery  and 
resilience plan is expected to do significant harm to environmental objectives within the meaning 
of  Article  17  of  Regulation  (EU)  No  2020/852  (the  principle  of  ‘do  no  significant  harm’).  This 
would  warrant  a  rating  of  A  under  the  assessment  criterion  2.4  of  Annex  V  of  the  RRF 
Regulation. 

4.5. Green transition 

Climate tagging 

Finland’s  recovery  and  resilience  plan  correctly  follows  the  methodology  for  climate 
tracking set out in Annex VI of the RRF  regulation by identifying intervention fields and 
corresponding coefficients for the calculation of support to the climate objectives, for each 
measure. It should be noted that: 

 

the proposed reform measures for the climate contribution do not have any associated cost 
in the recovery and resilience plan. In this context, the plan does not identify intervention 
fields for these measures, and they do contribute to reaching the climate target. 

  some measures of the recovery and resilience plan consist of several sub-measures – for 
these  measures,  the  plan  indicates  an  intervention  field  for  each  sub-measure  and 
computes the climate contribution at sub-measure level.  

  where  relevant,  milestones  and  targets  include  specifications  that  ensure  that  the 
requirements  of  an  intervention  field  are  met.  For  instance,  where  intervention  field 

48 

 
 
045bis – Use of recycled materials as raw materials compliant with the efficiency criteria 
is used, a milestone specifies that the objective of the measure is to convert at least 50 %, 
in  terms  of  weight,  of  the  processed  separately  collected  non-hazardous  waste  into 
secondary raw materials. 
the choice of intervention fields for the climate transition is well justified and reflects the 
nature, focus, objective or expected outcome of the investments.  
the recovery and resilience plan does not propose to increase the climate coefficients for 
any measure. 

 

 

Measures  supporting  climate  change  objectives  in  Finland’s  recovery  and  resilience  plan 
account  for  EUR  1.048  billion, which  represents  50.3%  of  the  plan’s  total  allocation.25  Of 
the 13 components in the plan, 9 components include expenditure that contributes to the climate 
objectives, with the greatest concentration in policy area 1 (green transition).  

Table 7: Climate contribution and cost per component 

Component 

P1C1  Transformation  of 
system 

the  energy 

P1C2  Industrial  reforms  and  investments 
in  support  of  the  green  and  digital 
transition 

Cost 

(EUR million) 

Climate 
contribution 
(EUR million) 

Climate 
contribution 
(percentage of 
total allocation) 

318.7 

318.7 

15.3% 

326 

326 

15.6% 

and 
P1C3  Reducing 
environmental  impacts  of  the  building 
stock 

climate 

the 

P1C4 
communities and transport 

Low-carbon 

solutions 

for 

110 

40 

110 

5.3% 

40 

P1C5  Environmental  sustainability  and 
nature-based solutions 

P2C1 Digital infrastructure 

P2C2  Accelerating  data  economy  and 
digitalisation 

P2C3 Digital security 

30 

                     24 

135 

62 

29.75 

34 

0 

0 

1.9% 

1.2% 

1.6% 

0% 

0% 

25 The table in the Annex presents the detailed application of the climate tracking methodology for all measures 
and sub-measures with a climate contribution. 

49 

 
 
                                                           
Component 

Cost 

(EUR million) 

Climate 
contribution 
(EUR million) 

Climate 
contribution 
(percentage of 
total allocation) 

P3C1 Employment and labour market 

P3C2 Upskilling and continuous learning 

P3C3  RDI,  Research  infrastructure  and 
piloting 

P3C4  Strengthening  competitiveness  and 
crisis-impacted 
boosting  growth 
sectors 

in 

P4C1  Strengthening  access  to  social  and 
healthcare  services  and  increasing  cost-
effectiveness 

170 

107.5 

267 

94 

0 

1.5 

192 

3.6 

0% 

0.1% 

9.2% 

0.2% 

404.8 

0 

0% 

Total 

2094.96 

1049.8 

50.3% 

Measures  to reduce emissions from energy and industry (in components P1C1 and P1C2) 
account  for  a  large  part  of  the  climate  contribution.  This  is  achieved  through  investing  in 
energy  infrastructure,  new  energy  technologies,  distribution  of  green  hydrogen  and  low  carbon 
gases and electrification of industrial processes. Measures tagged with corresponding intervention 
fields  contribute EUR 645 million  to  climate objectives.  This  corresponds  to  more than half of 
the plan’s total climate contribution. Where applicable, Finland ensures through milestones that 
the required level of energy-efficiency, greenhouse gas emissions reduction and waste conversion 
shall be achieved. It has been ensured that the necessary budget is attributed to these measures to 
ensure that the energy-savings can actually be achieved.  

Investments in reducing carbon emissions from the building stock also provide a significant 
contribution  towards  achieving  the  climate  objectives.  Component  P1C3  –  Reducing  the 
climate  and  environmental  impacts  of  the  building  stock  is  expected  to  contribute  to  reducing 
greenhouse  gas  emissions  from  construction  and  heating  of  buildings.  Investment  measures 
included  focus  on  subsidising  the  replacement  of  oil-fuelled  heating  boilers  by  low-carbon 
energy-efficient  heating  in  private  and  public  buildings,  and  on  accelerating  the  adoption  of 
technologies,  services  and  operating  models  to  reduce  emissions  in  the  construction  sector. 
Measures  reducing  the  emissions  of  buildings  account  for  EUR  110  million  of  the  climate 
contribution of Finland’s recovery and resilience plan.  

Likewise,  expenditure  for  green  transition  R&D&I  funding  contributes  to  the  climate 
target. These research activities and the technology transfer and cooperation between the private 
and public sector focus on developing solutions of innovative companies, for example, with the 
possibility of achieving emission reductions (component P3C3 - RDI, Research infrastructure and 
piloting).  In  addition  to  supporting  growth  companies,  this  results  in  an  important  climate 
contribution as well as environmental benefits. These measures account for a climate contribution 

50 

 
 
  
of EUR 192 million. The sustainable transport investment measures in component P1C4 - Low-
carbon solutions for communities and transport contribute another EUR 40 million to the rollout 
of  the  public  and  private  charging  and  refueling  infrastructure.  A  more  modest  contribution 
comes  from  the  re-skilling  programme  for  the  green  and  digital  transition.  At  least  5%  of  this 
measure is earmarked for green skills. 

Green transition 

The measures in Finland’s recovery and resilience plan effectively contribute to the green 
transition, including biodiversity, and address the challenges resulting therefrom. The plan 
supports  Finland’s  2035  target  for  carbon  neutrality,  as  set  out  in  the  National  Energy  and 
Climate  Plan  2030  (NECP  2030).  In  the  NECP  2030,  Finland  commits  to  reducing  GHG 
emissions (-39% compared to 2005) and increasing renewable energy (51% renewables in gross 
final energy consumption). Together with the NECP 2030, the reform of the Climate Change Act 
ensures coherence between the energy and climate areas, as well as the interconnection with the 
green and energy transition dimension of the investments envisaged in the recovery and resilience 
plan.  

Various  components  of  the  recovery  and  resilience  plan  contribute  to  the  commitments 
made in the NECP 2030:  

  Component P1C1 aims at  increasing the share of renewables in energy generation. 
The  measures  included  in  this  component  should  accelerate  the  transition  of  the  energy 
sector,  increase  the  already  high  share  of  renewables  and  capitalise  on  the  innovative 
capacity  of  the  Finnish  economy.  Finland  is  complementing  these  investments  with  the 
planned construction of an 800 MW electricity interconnector between Northern Finland 
and Northern Sweden with a length of approximately 370 km, partially funded by TEN-E. 
  Component  P1C2  provides  financial  support  to  innovation  projects  in  industry, 
targeting  sectors  characterised  by  an  intensive  use  of  energy.  The  support  for  low 
carbon  processes  and  technologies,  electrification  of  industrial  processes  and  the 
development of sectoral roadmaps are expected to help decarbonise industry. 

  Component P1C3 improves the energy efficiency of the building stock. Finland aims 
to  abandon  all  fossil  oil-based  heating  in  public  building  by  2024  and  completely  by 
2030. The investments included in this component are expected to contribute strongly to 
this objective by  providing support to owners of private  and public buildings to  replace 
fossil  oil-based  heating  systems  by  low-carbon  alternatives.  This  should  lead  to  lower 
levels of greenhouse gas emissions and air pollution. 

  Component  P1C4  aims  to  promote  the  sustainability  of  transport  by  reducing 
transport emissions. Transport accounts for 20% of total emissions in Finland. As part of 
Finland’s progress towards carbon neutrality, it has set an objective of reducing emissions 
from transport by 50% by 2030 compared to 2005. Measures in this component focus on 
stimulating the use of vehicles that use electricity or alternative fuels by investing in the 
recharging and refuelling infrastructure. 

  Component P1C5 contributes to increasing biodiversity and reducing pollution. The 
measures  intend  to  combat  eutrophication  of  the  Baltic  Sea  by  treating  fields  with 
gypsum.  By  re-using  industrial  by-products,  this  component  also  contributes  to  meeting 

51 

 
 
Finland’s recycling targets. A transition to precision forestry can safeguard biodiversity, 
and reduce the load on water bodies.  

These  measures  contribute  to  the  green  transition  and  environmental  protection.  The 
recovery and resilience plan supports Finland in meeting the national energy and climate targets 
set out in the NECP 2030 as well as its national target of achieving carbon neutrality by 2035. 

The plan contains limited measures to enhance biodiversity. Component P1C5 is expected to 
promote biodiversity to some extent through measures focusing on nutrient recycling and forest 
management.  A  broader  approach  on  biodiversity  conservation  will  be  needed  to  address  the 
challenges that Finland is facing, including in the marine environment. Finland should consider 
addressing the environmental challenges and investment needs in these areas with the support of 
other EU funds.  

Conclusion:  Taking  into  consideration  the  assessment  of  all  the  measures  envisaged,  the 
recovery and resilience plan is expected, to a large extent, to make a significant contribution to 
the green transition or to address the related challenges and ensures that at least 37% of its total 
allocation contribute to the climate target. This would warrant a rating of A under criterion 2.5 
of Annex V of the RRF Regulation. 

4.6. Digital transition 

Digital tagging 

Reforms and investments contributing to digital objectives account for 27.5% of the plan’s 
total  allocation.  A  substantive  contribution  stems  from  the  three  components  in  the  dedicated 
policy area 2 on digitalisation and the data economy, in particular from the investments in digital 
infrastructure.  In  addition,  measures  on  the  transformation  of  the  energy  system  (component 
P1C1)  as  well  as  on  increasing  employment,  upgrading  skills,  and  research  and  development 
(policy  area  3)  and  on  the  digitalisation  of  healthcare  (policy  area  4)  will  make  notable 
contributions to the digital objectives.  

The plan correctly follows the methodology for digital tagging set out in Annex VII of the 
RRF  regulation,  by  identifying  intervention  fields,  and  corresponding  coefficients  for  the 
calculation of support to the digital objectives, for each measure (the table in Annex presents the 
detailed application of the digital tagging methodology). The plan does not propose an increase in 
coefficients. It should be noted that: 

  some measures of the recovery and resilience plan consist of several sub-measures – for 
these  measures,  the  plan  indicates  an  intervention  field  for  each  sub-measure  and 
computes  the  digital  contribution  at  sub-measure  level.  This  concerns  in  particular 
measures related to continuous learning, R&D&I and SME support. 
the choice of intervention fields for the digital transition is well justified and reflects the 
nature, focus, objective or expected outcome of the investments.  

 

52 

 
 
 
 
Table 8: Digital contribution per component 

Component 

the  energy 

P1C1  Transformation  of 
system 
P2C1 Digital infrastructure 
P2C2 Accelerating the data economy and 
digitalisation 

P2C3 Digital security 

P3C1 Employment and labour market 

P3C2  Raising  the  competence  level  and 
reform of continuous learning 
P3C3  RDI,  research  infrastructure  and 
piloting 
P3C4  Strengthening  competitiveness  and 
boosting  growth 
crisis-impacted 
sectors 

in 

P4C1 Improving the availability of social 
welfare  and  health  care  services  and 
increasing cost-effectiveness 

Cost 

(EUR million) 

Digital 
contribution 
(EUR million) 

Digital 
contribution 
(percentage of total 
allocation) 

318.7 

135.0 

71.5 

29.8 

170.0 

107.4 

267.0 

94.0 

62.0 

135.0 

71.5 

20.0 

40.0 

52.9 

18.0 

30.0 

3.0% 

6.5% 

3.4% 

1.0% 

1.9.% 

2.5% 

0.9% 

1.4% 

404.8 

144.8 

6.9% 

Total plan 

2094.7 

574.3 

27.5% 

Digital transition 

The plan contains several measures that are expected to contribute to the digital transition 
and to address challenges resulting from it in a lasting manner. The main focus of the plan is 
on e-government, the digitalisation of public service, and local digital ecosystems. This includes 
measures to foster digitalisation in health and employment services, digitalisation of rail systems, 
and the implementation of smart energy grids (in total about EUR 332 million), and Finland will 
also  invest  in  data-driven  innovation  (EUR  37  million)  and  cybersecurity  (EUR  20  million). 
Moreover,  Finland  will  invest  in  digital  skills  (EUR  52.9  million),  connectivity  (EUR  50 
million), the deployment of advanced technologies and digital R&D&I (EUR 43 million), and in 
the digitalisation of businesses, including SMEs (EUR 30 million). 

Investments  and  reforms  also  link  to  the  following  flagships  as  put  forward  in  the  2021 
Annual  Sustainable  Growth  Strategy:  connect  (rollout  of  rapid  broadband  services  to  all 
regions  and  households),  modernise  (digitalisation  of  public  administration),  reskill  and  upskill 
(education  and  training  to  support  digital  skills),  scale-up  (development  of  the  most  powerful, 
cutting  edge,  and  sustainable  processors),  and  recharge  and  refuel  (promotion  of  future-proof 

53 

 
 
 
clean technologies to  accelerate the use of sustainable, accessible and smart  transport, charging 
and refuelling stations and extension of public transport). 

The actions put forward in the plan are coherent with the relevant national strategies and 
plans in the digital domain. Investments in digital infrastructure are in line with the actions set 
out  in  the  Digital  Infrastructure  Strategy,  put  forward  by  the  Ministry  of  Transport  and 
Communication  in  October  2018.  This  outlines  the  objectives  for  the  development  of  digital 
infrastructure  in  Finland  by  2025  as  well  as  the  methods  for  achieving  it.  Concerning  the 
digitalisation of rail services, the actions in the plan will contribute towards achieving the goal of 
halving transport emissions by 2030, in line with the ‘Roadmap for fossil-free transport’ adopted 
6  May  2021.  They  are  also  in  line  with  the  National  Transport  System  Plan  for  2021-2032 
approved  by  the  government  in  April  2021.  The  reform  related  to  anti-money  laundering  is 
consistent  with  the  Strategy  and  Action  Plan  for  Tackling  the  Grey  Economy  and  Economic 
Crime  for  2020–2023  adopted  in  2020,  which  identified  obstacles  to  information  exchanges 
aiming to prevent money laundering and the financing of terrorism as possible action points.  

The  measures  in  the  plan  are  expected  to  contribute  to  the  four  strategic  priorities 
identified  at  EU  level  and  reaffirmed  in  the  recent  communication  on  Europe’s  Digital 
Decade26: skills, infrastructures, digital transformation of businesses and digitalisation of public 
services.  

The  plan  foresees  several  measures  to  make  best  use  of  the  opportunities  of  the  digital 
transition in the public sector. A reform of the anti-money laundering framework is expected to 
improve the collection and exchange of information between the competent authorities, including 
through  the  automation  of  data  processing  and  analysis.  By  extending  the  coverage  of  the 
residential  and  commercial  property  information  system  with  information  on  housing  company 
loans, the plan should help strengthen the monitoring of household debt and establish the credit 
registry system.  Finland  also  envisages the promotion of a wide range of digital  innovations  in 
employment  services,  the  social  and  health  care  sector,  to  increase  resource  efficiency,  support 
preventive  services,  enable  the  sharing  of  expertise  between  different  regions  and  service 
provides, and strengthen the role of customers.  

The Finnish plan contains notable measures to support the development of digital skills and 
increase  employment  through  the  application  of  new  digital  solutions.  In  the  area  of 
reskilling and upskilling, the Finnish plan contains a reform of continuous learning accompanied 
by an extensive digitalisation programme to build digital services and information resources on 
continuous  learning, with the aim of facilitating  the access  to  digital  education services, and to 
provide a specific training programme related to digital skills. Finland also aims to increase the 
number of students with a higher degree in sectors experiencing labour shortages, including the 
ICT  sector.  Immigration  of  skilled  workers  and  international  degree  students  is  planned  to  be 
supported through the development of new digital infrastructures and functionalities for speeding 
up  the  resident  permit  procedures,  with  the  aim  of  addressing  labour  and  skills  shortages  in 

26 COM(2021) 118 - 2030 Digital Compass: the European way for the Digital Decade, 9 March 2021 

54 

 
 
                                                           
specific  sectors.  In  Åland,  the  plan  is  expected  to  support  the  introduction  of  student-centred 
digital  education  in  all  higher  education  studies  and  introduce  new  study  programmes  in 
particular in the field of digitalisation and automation.  

The  plan  foresees  investment  in  research  and  innovation  in  several  areas  that  are 
fundamental to the digital transition. In particular, the plan aims to fund applied research and 
deployment  of  new  technologies,  in  order  to  improve  Finland’s  competitiveness,  information 
security and sovereignty. In the area of microelectronics, financial support should be provided to 
accelerate  and  increase  Finnish  companies’  investments  in  the  development  of  the  production 
value  chain  of  microelectronics  and  to  increase  the  ability  to  design  and  manufacture 
semiconductor  components  in  Finland  and  the  EU.  The  plan  also  envisages  support  for  the 
development  of  6G,  artificial  intelligence  and  quantum  computing,  which  are  considered 
important  for  technological  competitiveness  in  the  future.  Moreover,  the  plan  includes  an 
investment  package  that  aims  at  investing  in  research  and  innovation  infrastructure  supporting 
sustainable growth and digitalisation more broadly.  

Investments in digital infrastructure are expected to help addressing connectivity gaps and 
to meet the needs of an increasingly digital society. Finland aims to invest in fixed high-speed 
broadband  networks  in  areas  where  access  would  not  be  provided  on  commercial  basis,  i.e.  in 
particular  in  sparsely  populated  regions,  which  is  in  line  with  the  national  broadband  strategy 
(‘Digital  Infrastructure  Strategy  2025’).  Deployment  of  new  digital  solutions  across  sectors 
require  fast  and  reliable  communication  networks,  especially  for  critical  applications. 
Furthermore, the plan contains investment in the digitalisation of rail transport. In particular, the 
‘Digirail’ project aims to introduce a new rail traffic management system, which is expected to 
help Finland increase the capacity of the system, improve the quality of service and also meet the 
emission reduction targets. 

The plan also includes measures that aim at supporting the digitalisation of businesses. In 
particular,  Finland  aims  to  foster  the  international  business  development  of  at  least  240  SMEs 
through the ‘growth acceleration programme’ that should promote the application of new digital 
solutions.  Moreover,  under  the  ‘real-time  economy’  initiative,  Finland  plans  investment  in 
common  solutions  to  create  an  ecosystem  for  businesses  that  facilitates  the  exchange  of  digital 
business  information  and  financial  reporting  and  allows  for  automated  processes  and  thus 
increasing  productivity.  A  virtual  platform  should  offer  uniform  and  user-friendly  services  for 
Finnish companies to increase their global recognition and for foreign companies and individuals 
to enter the country. 

Climate and environmental-related measures in the plan also include the application of new 
digital technologies. Notably, this concerns the investments in energy infrastructure, which aim 
to support smart energy systems (smart grids) and the use of digital solutions (smart meters) to 
fully exploit the flexibility in energy consumption. In addition, the reform of the Land Use and 
Building Act should allow monitoring emissions throughout the life cycle of buildings based on 
the  use  of  smart,  digital  technology.  To  promote  a  circular  economy,  the  plan  envisages  the 
application  of  digital  platforms  and  services  that  promote  the  re-use  and  recycling  of  key 
materials and industrial side products.  

55 

 
 
Finally,  the  digital  measures  included  in  the  plan  will  make  Finland  more  resilient.  In 
particular, the plan contains  measures that aim at improving cyber security. Up to  2,000 public 
officials will receive a corresponding training until 2025. Moreover, the plan includes financial 
support  for  developing  cybersecurity  skills.  The  proposed  reforms  and  investments  aim  at 
improving  the  public  digital  services,  including  of  the  public  employment  services,  and  at 
mitigating  the  impact  of  the  pandemic  on  most  vulnerable  groups.  Furthermore,  investment  in 
digital health solutions are expected to improve the resilience of the healthcare system. 

Conclusion 

Taking  into  consideration  the  assessment  of  all  the  measures  envisaged,  the  recovery  and 
resilience  plan  is  expected,  to  a  large  extent,  to  make  a  significant  contribution  to  the  digital 
transition or to address the challenges resulting from it and ensures that at least 20% of its total 
allocation  contribute  to  support  digital  objectives.  This  would  warrant  a  rating  of  A  under 
criterion 2.6 of Annex V of the RRF Regulation. 

4.7. Lasting impact of the plan  

Structural change in administration and institutions  

The  implementation  of  the  envisaged  reforms  and  investments  is  expected  to  bring  about 
structural  changes  to  the  Finnish  public  administration  that  will  improve  its  effectiveness 
and efficiency. The plan is expected to bring about institutional changes in public services and in 
the  organisation  of  local  and  regional  administration,  along  with  the  modernisation  and 
digitalisation of public services. Components P2C2, P2C3 and P3C1 include initiatives that aim 
to  further  build  up  the  digital  public  sector  of  the  future  by  a  continuous  modernisation  of  the 
digital  infrastructure,  meeting  the  needs  of  all  citizens  and  businesses.  This  notably  covers 
reforms  and  investments  such  as  the  real-time  economy  (RTE)  programme,  the  acceleration  of 
data  economy  and  digitalisation  (Virtual  Finland),  the  development  of  the  residential  and 
commercial property information system, ensuring effective supervision and enforcement of the 
prevention of money laundering , developing civilian cybersecurity skills, and the digitalisation 
of  several  labour  market-related  tools.  Measures  included  in  component  P3C1  are  expected  to 
contribute to long-term structural changes in the Public Employment Services (PES), following 
the implementation  of the Nordic model of public employment services and PES digitalisation. 
The  plan  also  foresees  a  streamlining  and  digitalisation  project  regarding  the  resident  permit 
procedures  for  labour  and  education-based  migration  that  is  expected  to  bring  positive  lasting 
effects by better talent attraction. Furthermore, Finland has in recent years focused on integrated 
employment,  education  and  health  services,  which  will  be  further  supported  under  this 
component, hence contributing to long-term changes in the way public services are provided.  

The  measures  proposed  under  component  P3C2  have  a  strong  likelihood  to  contribute  to  long-
term  positive  structural  and  systemic  changes  through  the  digitalisation  of  the  continuous 
learning  system  and  the  higher  education  system  and  improved  functioning  of  the  public 
administration 
learning  aims 
in  general.  The  digitalisation  programme  for  continuous 
atimproving  interoperability  and  efficiency  both  in  the  use  of  resources  and  the  operating 

56 

 
 
 
methods, through anticipating labour and competence needs and developing tailor-made training 
and guidance services.  

The  social  and  healthcare  (SOTE)  reform,  which  is  addressed  by  component  P4C1,  entails  the 
transfer  of  responsibilities  for  management  and  organisation  of  social  and  health  services  from 
more  than  300  municipalities  to  21  welfare  areas  and  the  city  of  Helsinki.  The  proposed 
measures,  in  particular  the  digitalisation  investments,  together  with  the  ongoing  national 
measures,  are  also  expected  to  have  a  positive  impact  on  the  resilience  and  accessibility  of  the 
social  and  healthcare  system.  By  developing  digital  services  targeting  citizens,  professional 
systems  and  management  solutions  at  regional  and  national  level,  these  measures  have  the 
potential to become long-lasting solutions and to meet the increasing needs and pressures in the 
sector.  

Structural change in policies 

Finland's  recovery  and  resilience  plan  includes  a  broad  set  of  reforms  that  are  bound  to 
have  a  lasting  impact  in  many  policy  areas  that  will  support  the  transformation  of  the 
economy, in particular through measures contributing to the green and digital transitions 
and  promoting  innovation.  Green  transition  policies  contained  in  the  components  in  the  first 
policy area of the plan aim at achieving lasting impacts by structurally reducing greenhouse gas 
emissions  in  the  most  emitting  sectors:  energy  supply,  industry,  buildings,  and  transport.  With 
dedicated  support  for  the  green  transition,  new  low-carbon  solutions  for  the  economy  could 
accelerate  the  growth  of  emerging  sectors,  thus  further  creating  opportunities  for  economic 
growth.  This  is  also  expected  to  put  Finland  firmly  on  the  path  towards  a  substantial  and 
sustainable reduction in greenhouse gas emissions, contributing to its target of becoming carbon-
neutral by 2035. The measures included in Policy area 1 of the plan are expected to contribute to 
this  overarching  policy  target  by  providing  funding  for  projects  in  several  sectors  with  high 
potential  reductions  in  emissions.  The  phasing  out  of  the  use  of  coal  in  energy,  investments  in 
increasing the share of renewables in the energy mix and investment in hydrogen are examples of 
measures  with  an  expected  lasting  impact  on  the  structure  of  the  energy  sector  and  industry  in 
Finland.  

in 

investment 

technologies, 

innovation  (green 

The  implementation  of  investments  and  reforms  planned  by  Finland  in  its  recovery  and 
resilience plan is expected to bring about further structural changes in several areas and to 
have a significantly positive impact on the economic and social resilience of the country. The 
envisaged 
technologies,  digital,  health), 
digitalisation  and  skills  embedded  in  the  plan  are  meant  to  entail  a  beneficial  and  long-lasting 
effect  on  productivity  and  therefore  on  potential  growth  of  the  Finnish  economy.  They  are 
expected  to  enhance  the  resilience  and  productivity  of  SMEs,  while  also  providing  accurate 
incentives for innovative firms. The plan’s ambitious R&D&I projects under components P2C2, 
P3C2,  P3C3  and  P4C1  could  have  a  long-lasting  positive  impact  respectively  on  climate 
objectives  and  on  digital  transformation.  The  focus  on  digitalisation  throughout  the  Plan  is 
expected to contribute to raising productivity in the long term. In particular, the completion of the 
broadband  network  will  promote  high-speed  internet  access  for  citizens,  households,  and 
companies in less densely populated areas across the country, which will enable everyone to take 
part in  the upward social  and economic  convergence driven by digitalisation and strengthening 
connectivity. 

57 

 
 
The  measures  aimed  to  increase  employment  and  employability  through  upskilling  and 
reskilling will also carry a positive effect on potential growth in the long-term. Reforms in 
active  labour  market  policies,  in  accordance  with  the  Nordic  model  of  public  employment 
services,  are  potentially  strong  drivers  in  raising  both  labour  supply  and  improving  the 
employability of various groups. The plan also encompasses large-scale investments in upskilling 
and  reskilling  of  working  age  people  in  view  of  twin  transition.  Measures  that  promote  youth 
employment,  especially  a  more  effective  integration  of  employment,  education  and  health 
services in Ohjaamo one-stop-shop service points, should facilitate the labour market integration 
of young people and counteract the structural rise in unemployment.  

Investments  are  also  planned  to  strengthen  the  role  of  higher  education  institutions.  The 
objective of the planned investment is to raise the level of education by increasing the number of 
people with a higher education degree. This is expected to contribute to the economic recovery 
and  mitigate  the  negative  effects  of  the  COVID-19  pandemic  by  accelerating  young  people’s 
access  to  higher  education.  The  measure  consists  in  increasing  the  number  of  study  places 
allocated to higher education institutions, especially in sectors experiencing labour shortages such 
as  social  and  health  care,  education,  technology,  and  ICT  sectors.  Such  investments  in  higher 
education  should  have  beneficial  spill  over  effects  and  a  lasting  impact  on  the  economy  and 
society, including in terms of increased innovation potential and by increasing the diversity of the 
economic output. 

Lasting impact 

The Finnish plan seeks to tackle many root causes of identified structural challenges. After 
the  setback  of  its  electronics  sector  in  the  last  decade  and  in  more  recent  years,  Finland’s 
productivity has remained comparatively low, reflecting productive investment below the level of 
the  EU  peers;  at  the  same  time,  higher  employment  rate  levels  could  hardly  be  reached  due  to 
skills  mismatch,  the  complex  benefit  system,  which  creates  barriers  to  taking  up  work,  and 
health-related  reasons.  The  plan  entails  sizeable  investment  in  equipment,  including  in  green 
technologies and digitalisation, and in research and innovation. In parallel, major efforts are made 
to  address  unemployment  and  improve  the  incentives  to  accept  work,  notably  through  the 
implementation  of  the  Nordic  model  of  public  employment  services,  reskilling  and  upskilling 
measures,  work  capacity  measures,  and  the  phasing  out  of  additional  days  of  unemployment 
benefits ahead of the retirement age (the so-called “unemployment tunnel”).  

Important  measures  meet  the  standard  of  good  practices.  The  proposed  reforms  and 
investments  in  the  social,  education  and  healthcare  areas  are  fully  in  line  with  other  EU 
initiatives,  such  as  the  EU  Skills  Agenda,  the  EU’s  flagship  initiative  Reskill  and  upskill,  the 
Council  Recommendation  on  VET  and  Upskilling  Pathways,  and  the  EASE  Recommendation. 
The  proposed  measures  are  also  in  line  with  the  fundamental  rights  and  the  European  Pillar  of 
Social  Rights,  including  the  right  to  quality  and  inclusive  education,  training  and  life-long 
learning  and  equal  opportunities  for  all  and  equal  access  to  healthcare.  However,  in  view  of 
strong focus on digitalisation of public services, people in more vulnerable positions will need to 
be continuously ensured personalised social and healthcare services. 

The positive impact on fiscal sustainability is ensured. The proposed reforms, in particular in 
the  areas  of  labour  market  (P3C1),  education  and  skills  (P3C2)  and  health  care  (P4C1),  are 

58 

 
 
expected  to  contribute  to  enhancing  the  efficiency  of  public  spending  while  contributing  to 
stabilising the level of public debt in the medium-term. If these reforms could prove instrumental 
to  reinforcing  public  debt  sustainability  and  to  providing  further  fiscal  space  to  offset  possible 
negative shocks, they could also entail a positive impact on long-term growth. 

The  proposed  measures  have  been  decided  in  an  inclusive  manner,  involving  the 
consultation of relevant stakeholders, and their implementation is expected to be inclusive 
as  well.  The  proposed  measures  have  been  subject  to  wide  stakeholder  consultations.  Key 
stakeholders  continue  to  be  integrally  involved  during  the  implementation  phase,  including  in 
validation and/or assessment of proposed solutions and monitoring of implementation.  

Conclusion 

Taking into consideration all reforms and investments envisaged by Finland in its recovery and 
resilience  plan,  their  implementation  is  expected,  to  a  large  extent  to  bring  about  a  structural 
change  in  the  administration,  in  relevant  institutions  and  in  relevant  policies  and  to  have  a 
lasting  impact.  This  would  warrant  a  rating  of  A  under  criterion  2.7  of  Annex  V  of  the  RRF 
Regulation. 

4.8. Milestones, targets, monitoring and implementation 

Adequacy of the structure tasked with the implementation of the plan, monitoring of progress and 
reporting 

The  implementation,  monitoring  and  reporting  process  of  the  Finnish  recovery  and 
resilience plan is ensured at the highest level of the Finnish Government by a “Ministerial 
Working  Group”  appointed  by  the  Government  on  14  January  2021  and  chaired  by  the 
Minister of Finance. This Working Group is composed of Ministers representing the Government 
parties and its role is to guide and monitor the implementation of Finland’s Sustainable Growth 
Programme financed by the country’s recovery and resilience plan.  

The  implementation  of  Finland’s  Sustainable  Growth  Programme  is  administratively 
coordinated by Inter-ministerial Co-ordination Group consisting of Permanent Secretaries 
of  all  ministries  and  chaired  by  the  Ministry  of  Finance.  Central-level  tasks  related  to  the 
coordination, management, control and audit of the Finnish RRP are consolidated by the Ministry 
of  Finance,  which  is  supported  in  the  implementation  and  monitoring  process  of  the  plan  by  a 
technical secretariat, operating in connection with the State Treasury under the administration of 
the  Ministry  of  Finance.  The  Secretariat  acts  as  a  liaison  body  between  the  ministries  and 
agencies responsible for the implementation and monitoring of the plan. 

Regarding the reforms presented in the recovery and resilience plan, their implementation 
is subject to specific high-level monitoring by the Ministerial Working Group. The Ministry 
of  Finance  as  a  coordinating  body  will  be  monitoring  the  implementation  of  reforms  and 
investments. Responsible ministries and agencies have been identified for the implementation of 
each reform, for monitoring its progress, and for the reporting on the achievement of milestones. 
The division of tasks is clear and the roles and responsibilities are adequately delineated, subject 
to the successful completion of the respective milestone on the entry into force of the respective 
legal mandates. 

59 

 
 
The  achievement  of  the  targets  and  milestones  related  to  investments  will  be  subject  to 
regular and centralised monitoring by the Ministry of Finance, on the basis of information 
collected  and  reported  by  the  responsible  public  administrations  concerned.  A  responsible 
body has been appointed for each reform and investment among the organisations responsible for 
implementation  of  the  plan  (Ministry  of  Economic  Affairs  and  Employment,  Ministry  of 
Environment, Ministry of Transport and Communications, Business Finland, Energy  Authority, 
The  Housing  Finance  and  Development  Centre  of  Finland  (ARA),  Regional  Centres  for 
Economic  Development,  Transport  and  the  Environment,  etc.).  In  particular,  these  bodies  will 
provide  information  on  the  progress  of  the  indicators  chosen  as  milestones  and  targets  to  the 
Ministry of Finance and the technical secretariat via a dedicated IT repository. The plan provides 
comprehensive information on the assurance of management verifications and clearly illustrates 
that the system to be put in place by the Finnish authorities will ensure a close monitoring of the 
implementation of the plan and a robust reporting on the achievement of milestones and targets to 
the  Commission.  Fulfilling  these  tasks  will  crucially  depend  on  the  successful  set-up  of  the 
planned repository system.  

Milestones, targets and indicators 

The  plan  includes  140  milestones  and  targets  spread  out  over  the  eligibility  period  of  the 
RRF,  with  some  backloading  of  targets  towards  the  end  of  the  period.  Milestones  set  near  the 
beginning of the lifetime of the RRF relate mainly to the setting up of investment facilities with a 
relatively broad mandate as well as a number of reform measures that provide the basis for the 
relevant investments. In this regard, the roll-out of many measures can be quick and the risk of 
non-completion of the initial milestones is considered low. 

The milestones and targets in the plan  are clear and realistic. The number of milestones or 
targets  per  measure  (between  one  and  four)  is  a  reasonable  reflection  of  the  lifecycle  of  the 
measures. The milestones and targets appropriately reflect the different stages of implementation 
of reforms and investments. For most measures, they relate to the setting-up or entry into force of 
a measure. The majority of milestones and targets related to changes in public policies addressed 
in  the  country-specific  recommendations  for  Finland.  Examples  include  the  adoption  of  the 
Climate Change Act, the reform of continuous learning, the reform of social and health care, all 
of which shall be adopted between 2021 and 2023. For some of the broad investment schemes, a 
final output target is included that appropriately measures whether the objective of the measure 
has been achieved. For investment  schemes where this has not  been feasible, the plan provides 
instead budgetary execution targets. This is the case where it is not clear in advance whether there 
will only be a small number of large projects to be financed or rather a larger number of smaller 
projects. The milestones and targets are consistent with the long-term objectives of the measures.  

The proposed indicators are relevant, acceptable and robust. They are easily measurable and 
constitute relevant markers of progress in implementing the measures. Overall, the indicators are 
under the control of the government, as they either reflect an input provided by the government or 
an output. Few indicators can be expected to be influenced by factors outside the government’s 
control. Given their limited number, the risk of non-completion is considered low.  

The  ambition  of  some  of  the  indicators  can  be  considered  modest.  However,  this  cautious 
approach will help ensure that the government reaches the milestone or target in cases where, for 

60 

 
 
instance, the number of beneficiaries of certain investment schemes is uncertain. This is the case 
for measures that aim to stimulate highly innovative sectors and whose full budgetary execution 
depends on the development of the relevant technologies by market operators, such as in the field 
of reductions of industrial emissions.  

Overall organisational arrangements 

The  Ministry  of  Finance  will  oversee  coordination,  monitoring  and  reporting  on  the 
implementation of the plan. It will, among other things: 

  ensure compliance with EU regulations;  
  monitor  the  full  and  timely  fulfilment  of  the  plan’s  strategic  and  operational  objectives 

through milestones and targets;  

  prepare  and  submit  the  requests  for  disbursement  based  on  the  necessary  information 

from the competent authorities and reports to the Commission;  

  ensure the evaluation of the results of the plan and the dissemination of outputs; and 
  provide technical assistance to the competent authorities.  

The Ministry of Finance will monitor the implementation of the plan and be responsible for 
liaising  with  the  EU  institutions.  Responsibility  for  implementation  will  be  divided  per 
components  among the relevant  ministries.  In  addition,  the Ministry of  Finance’s internal  audit 
unit will be assigned the task of coordinating the audit systems  and conducting controls  on the 
line ministries’ application of funds and fulfilment of milestones and targets. The interaction with 
the control system is described in detail in Section 4.10. 

Conclusion 

The  arrangements  proposed  by  Finland  in  its  recovery  and  resilience  plan  are  expected  to  be 
sufficient to ensure effective monitoring and implementation of the plan, including the envisaged 
timetable, milestones and targets, and the related indicators. This warrants a rating of A under 
assessment criterion 2.8 in Annex V to the RRF Regulation. 

4.9. Costing 

Finland has provided cost estimates for all concerned measures in the plan. In some cases, 
no  costs  were  associated  with  the  reforms  in  the  plan,  although  the  plan  also  includes  reforms 
linked with RRF-financed expenditures. The reforms and investments in the plan comply with the 
eligibility criteria set out in the RRF Regulation. All measures are implemented after 1 February 
2020 and the relevant actions relating to their implementation are expected to be carried out by 
31 August 2026 at the latest. Value-added tax (VAT) is not part of the cost estimates for which 
funding from the RRF is requested. 

The  cost  breakdown  is  sufficiently  detailed.  Estimates  are  for  the  most  part  based  on 
comparisons with  past  investment  schemes,  contracts  of  a similar nature  or government  impact 
assessments and internal expertise. The tables proposed in the standard template were completed 
and  presented.  They  were  supplemented  by  separate  documents  including  more  detailed 
descriptions  of  cost  estimates.  The  cost  estimates  were  not  validated  by  an  independent  public 
body such as a national productivity board or an independent fiscal institution. The assessment of 

61 

 
 
the  cost  estimates  and  the  supporting  documents  demonstrates  that  most  of  the  costs  are  well 
justified, reasonable and plausible. 

Finland provided detailed explanations to justify the reasonability of the cost estimates. The 
analysis  of  the  supporting  evidence  revealed  a  wide  range  of  methodologies  used  to  estimate 
costs. The costs of most measures were estimated on the basis of similar past or parallel projects 
(e.g. broad investments schemes in energy investments or RDI) or government impact assessment 
for ongoing reforms (e.g. Nordic model of public employment services, the continuous learning 
reform,  investments  supporting  implementation  of  the  social  and  healthcare  reform).  In  some 
cases,  cost  estimates  were  based  by  independent  studies  (Digirail  project),  academia  research 
plans  (cyber  security)  or  tentative  calls  for  proposals  (innovation  infrastructures).  The  cost 
estimates were presented in a synthetic way. The key assumptions and cost drivers were clearly 
spelt  out  allowing  to  identify  the  methodology  used.  Overall,  more  than  three  quarters  of 
measures in the plan have been rated high in the assessment of reasonability of costing estimates. 
In this context, the reasonability of the cost estimates is deemed well established. 

Finland used reference costs to justify the plausibility of its cost estimates. Many measures in 
the  plan  constitute  broad  investment  schemes  based  on  call  for  applications,  for  which  similar 
investment schemes existed in the past and historical or comparative information on the key cost 
drivers  were  provided.  However,  the  supply  of  supporting  evidence  has  not  been  consistent 
throughout  the  plan.  For  some  measures,  no  detailed  comparative  cost  data  or  relevant  studies 
have  been  provided.  For  most  measures,  the  estimated  costs  have  been  assessed  by  the 
Commission services as consistent with similar reforms and investments, including those funded 
by other EU Programmes. Considering the limitations of an ex-ante assessment of cost estimates, 
the amounts proposed for financing were overall deemed appropriate and the plausibility of the 
cost estimates is fairly well established. 

Finland has a relatively large share (about 14%) of temporary staff costs in the total costs 
of the plan. These are typically temporary public sector staff costs that are intrinsically linked to 
the  implementation  of  reforms  in  the  area  of  labour  market  as  well  as  health  and  social  care. 
These  sectors  require  high  level  of  spending  on  human  capital  to  ensure  implementation  of 
reforms and investments. In quite a few cases the Finnish authorities expressed their intention to 
rely on temporarily hired in-house experts rather than external consultancy services. According to 
detailed explanations provided with the plan, these costs are found fully justified and temporary 
(i.e. will not be continued beyond the implementation of the plan).  

Finland  has  confirmed  that  the  same  cost  will  not  be  covered  at  the  same  time  by  the 
recovery  and  resilience  plan  and  by  existing  or  planned  Union  financing,  in  line  with  the 
provisions of Article 9 of the RRF Regulation. Finland has identified a limited number of cases 
where investments are planned to be financed by both the RRP and other EU funding.  In those 
limited cases, Finland has provided sufficient information on the costs planned to be funded by 
each source of funding. Acknowledging that the planning documents for  the implementation of 
the  European  Structural  and  Investment  Funds  (ESIF)  are  still  at  preliminary  stages  of 
preparation. Finland has confirmed that specific arrangements will be put in place in due course 
to avoid double funding, including from ESI funds, during the implementation phase [(see further 
details on the arrangements to prevent double-funding under Section 4.10 Controls and Audits)]. 

62 

 
 
Taking into account the economic and social impact of the plan, as well as the reasonability 
and  plausibility  of  the  cost  assessment,  it  is  considered  that  the  plan  is  in  line  with  the 
principle  of  cost  efficiency.  At  the  same  time,  the  output  targets  provided  in  the  plan  for  the 
investments are commensurate with the costing justifications and assumptions provided. 

Conclusion 

The justifications provided by Finland on the amount of the estimated total costs of the recovery 
and resilience plan are to a medium extent reasonable, to a medium extent plausible, in line with 
the principle of cost efficiency and commensurate to the expected national economic and social 
impact  on  the  economy.  Finland  has  provided  sufficient  information  and  evidence  that  the 
amount of the estimated cost of the reforms and investments of the recovery and resilience plan to 
be financed under the Facility is not covered by existing or planned Union financing. This would 
warrant a rating of B under the assessment criterion 2.9 in Annex V of the RRF Regulation. 

4.10. 

Controls and audit  

Robustness of internal control system and distribution of roles and responsibilities 

The  Ministry  of  Finance  (MoF)  is  responsible  for  coordination,  control  and  audit, 
preparation  of  payment  requests  and  issuing  the  management  declarations.  It  is  also 
responsible for monitoring and reporting, draws up summaries of audits to accompany payment 
requests  and  acts  as  the  point  of  contact  for  the  Commission.  The  MoF  is  supported  by  the 
Technical  Secretariat  (see  more  in  section  4.8)  in  the  areas  of  coordination,  management, 
monitoring of the implementation as well as fight against fraud and prevention of double funding. 
Various  ministries  and  agencies  are  responsible  for  managing  grants  and  subsidies,  including 
corrections and recoveries, in their respective areas.  

The  Ministry  of  Finance  will  perform  control  activities  and  monitoring  visits  to  the 
authorities granting the aid. The supervisory activities are supposed to take place based on an 
annual plan developed following a risk assessment. According to the plan, the aim is to have as 
wide  coverage  as  possible  during  the  supervision  visits.  The  correctness  of  the  programme’s 
monitoring  data  and  the  implementation  of  corrective  actions  concerning  the  deficiencies 
detected are supposed to be ensured by the control measures. A common information system is 
supposed to be used to store information on supervision activities.  

The  Ministry  of  Finance’s  Financial  Controller’s  function  is  responsible  for  audits.  While 
the function is part of the MoF, it is independent from other programme management and control 
functions.  The  Audit  Authority  Unit  within  the  Finance  Controller  function  of  the  Ministry  of 
Finance is responsible for drawing up and updating the audit strategy. It will conduct both audits 
of  the  control  systems  and  individual  projects  /  RRP  measures.  While  its  project  audits  are 
explained to be carried out randomly, the system audits are supposed to be carried out on a risk-
based  basis  according  to  the  audit  strategy  and  plan.  The  preliminary  audit  strategy  envisages 
conducting two to five system audits and statistical sampling for 30 project audits per year. The 
audit strategy defines the random sampling method and the minimum number of audit priorities 
to be assessed in project audits. The strategy is supposed to define risk-level assessment criteria 
that take into account the amount of funding, the number and size of projects and measures, and 
draw  on  the  experience  gained  from  other  programmes  and  control  and  audit  visits  by  other 

63 

 
 
authorities. The audit authority may outsource part of system and project audits by competitive 
tendering with independent audit entities outside the public administration. 

The  National  Audit  Office  of  Finland  (NAOF)  will  also  audit  the  implementation  of  the 
plan. The NAOF, which reports to Parliament, carries out audits as part of the monitoring of the 
implementation of the state budget, which may concern both the central government accounting 
offices and the EU funds used in Finland, including the implementation of the RRP. The audited 
authorities are responsible for implementing the NAOF recommendations and the MoF takes note 
of them for the overall implementation of the plan. 

64 

 
 
 
 
Adequacy of control systems, IT system and other relevant arrangements 

Recipients of government transfers must provide access to information, reports, documents, 
recordings and other material necessary for audits as well as otherwise assist in audits. The 
plan  furthermore  provides  a  number  of  legal  bases  on  recoveries  and  criminal  code  related  to 
irregularities  related  to  financial  support.  This  includes  legal  bases  for  reasons  of  irregularities 
that trigger recoveries and the corresponding criminal code implications in such cases. Hence, the 
plan  adequately  describes  the  obligations  for  ministries  and  agencies  to  conduct  corrective 
actions and recoveries. 

Finland has committed to developing a comprehensive IT repository that will facilitate the 
implementation and monitoring of the plan. The new system,  which  will build partly on the 
existing  systems,  will  be  constructed  to  ensure  that  the  necessary  data  transfers  to  the 
Commission’s data mining and risk scoring tool (ARACHNE) will be possible. The possibility to 
implement  the  ARACHNE  system  in  Finland  will  also  be  explored.  Establishment  of  the 
repository  system  for  audit  and  controls  that  will  collect  information  for  monitoring  the 
implementation of the plan constitutes a dedicated milestone included in the plan that has to be 
achieved  by  the  time  of  submitting  the  first  payment  request  under  the  RRP.  The  system  shall 
include  at  least  the  following  functionalities:  (a)  collect  data  and  monitor  the  achievement  of 
milestones  and  targets;  b)  collect,  store  and  ensure  access  to  the  data  required  by  Article 
22(2)(d)(i) to (iii) of the RRF Regulation. An audit report from the audit authority shall confirm 
the  functionalities  of  the  repository  system  and  that  the  system  is  fully  functional  and  in 
operation. Establishment and operation of this IT system will ensure that all required information 
is collected and stored in accordance with Article 132 of the EU Financial Regulation. 

Serious irregularities can be detected during the monitoring of the coordinating body, the 
ministries,  agencies  or  audit  bodies.  Reporting  of  irregularities  to  the  appropriate  control 
authorities  and  OLAF  is  the  responsibility  of  ministries  and  aid  granting  authorities.  Each 
ministry  and  aid  granting  authority  shall  also  be  responsible  for  the  corrective  measures  to  be 
taken  in  the  event  of  irregularities,  including  recoveries  in  accordance  with  national  laws 
applicable  to  the  aid.  Furthermore,  the  police  and  the  tax  authorities  have  procedures  and 
whistleblowing  channels  for  reporting  fraud  and  irregularities,  which  are  ready  to  use  for  the 
implementation  of  the  RRP.  The  plan  also  states  that  the  avoidance  of  conflicts  of  interest  is 
ensured in the Administrative Procedure Act (434/2003). 

The  overall  assessment  of  the  adequacy  of  the  control  systems  and  other  relevant 
arrangements is positive, although the plan is lacking description of details in some parts. 
This  notably  concerns  procedures  for  detection  of  serious  irregularities,  training  of  staff  to 
prevent  fraud,  protection  of  whistle-blowers,  fraud  risk  assessments,  contractual  arrangements 
with implementing bodies and transparency laws. 

Adequacy of arrangements to avoid double EU funding 

The  plan  states  that  double  funding  shall  be  avoided  by  means  of  coordination  between 
authorities at all stages of the process. Each ministry and aid granting authority have their own 
procedures in place to prevent and control double funding, which are however not explained in 
detail in the plan.  

65 

 
 
Legal empowerment and administrative capacity of control function 

According to the plan, the Act on the Implementation of the RRP will provide the Ministry 
of  Finance  with  the  mandate  to  direct  the  authorities  responsible  for  administration, 
supervision and enforcement, to issue regulations on the use of funds and reporting, and to 
carry  out  supervision  visits  to  authorities,  projects  and  measures.  The  administration  and 
supervision of the implementation will be carried out by each ministry in its own administrative 
branch (Ministry of Employment and the Economy, Ministry of Education and Culture, Ministry 
of  Social  Affairs  and  Health,  Ministry  of  the  Environment,  Ministry  of  Transport  and 
Communications, Ministry of Agriculture and Forestry, Ministry for Foreign Affairs, Ministry of 
the Interior, Ministry of Finance). Ministries and authorities granting support are responsible for 
the RRP’s actions on the basis of the Act on Discretionary Government Transfers (688/2001) or 
special legislation. The plan includes a commitment to establish the legal mandates for the 
bodies involved in the coordination, monitoring, control and audit of the implementation of 
the  Finnish  RRP  (including  the  audit  function  in  the  MoF).  These  legal  mandates  are  the 
subject  of another dedicated milestone included  in  the plan: entry into  force of the  Law on the 
implementation of the RRP. The Law shall set out the roles and responsibilities of those bodies in 
ensuring (a) the collection and reliability of data linked to and monitoring of the achievement of 
milestones  and  targets;  (b)  that  procedures  are  in  place  for  the  drawing  up  of  management 
declarations, audit summaries and payment requests; (c) that the necessary principles underlying 
the  collection  and  storing  of  data  on  beneficiaries,  contractors,  subcontractors,  and  beneficial 
owners in accordance with Article 22 of the RRF Regulation are in place. The law shall enter into 
force before the submission of the first payment request under the recovery and resilience plan. 

The  plan  states  that  Authorities  responsible  for  the  coordination,  administration, 
supervision  and  audit  of  the  implementation  of  the  RRP  will  start  their  operations  in  Q4 
2021. Hence a milestone to this effect, to be achieved by the time of the first payment request, is 
included in the plan. The plan outlines the additional required administrative capacity in terms of 
additional staff required. 

Conclusion 

The arrangements proposed by Finland in the recovery and resilience plan to prevent, detect and 
correct  corruption,  fraud  and  conflicts  of  interest  when  using  the  funds  provided  under  the 
Facility, including the arrangements aimed to avoid double funding from the Facility and other 
Union  programmes,  are  assessed  to  be  adequate,  provided  that  the  additional  arrangements 
envisaged  under  the  milestone  on  audit  and  control  (Entry  into  force  of  the  Law  on  the 
implementation of the RRP) and the milestone on the IT system (Repository system for Audit and 
Controls)  are  fulfilled  in  due  time.  This  would  warrant  a  rating  of  A  under  the  assessment 
criterion 2.10 of Annex V of the RRF Regulation. Otherwise, the rating would be C. 

4.11. 

Coherence  

Finland's  recovery  and  resilience  plan  is  at  the  centre  of  the  Sustainable  Growth 
Programme for Finland. The objective of the Sustainable Growth Programme is to reduce 
greenhouse gas emissions, increase productivity, raise the employment rate, ensure quicker 
access  to  care  and  promote  regional,  social  and  gender  equality.  Building  on  a  coherent 
narrative,  the  Finland’s  recovery  and  resilience  plan  displays  a  clear  strategic  vision 
66 

 
 
towards those objectives. The six strategic objectives are translated into four policy areas: 
(1)  green  transition,  (2)  digital  transformation,  (3)  employment  and  skills,  research, 
development and innovation, research infrastructure, small and medium-sized enterprises-
related support, growth sectors and (4) social and healthcare.  

The four policy areas ensure the coherence of the 13 components of the plan and the individual 
measures  within  them.  The  RRP  provides  for  an  overall  balanced  mix  of  reforms  and 
investments.  Measures  included  in  the  plan  reinforce  and  complement  each  other:  Reforms 
included in the plan underpin envisaged investments on the one hand while investment support 
and operationalise broader reforms efforts on the other hand. This leads to a mutually reinforcing 
impact  and  synergies.  Components  have  a  clear  and  meaningful  structure  that  focus  on 
addressing  clearly  identified  overarching  challenges  and  objectives.  Components  contain  well-
established links between reforms and investments that are of coherent nature. Measures are also 
consistent  with  the  relevant  national  policy  frameworks,  including  the  government  programme, 
the continuous learning reform and the national energy and climate plan. 

Mutually-reinforcing measures  

Each  component  includes  meaningful  reforms  that  accompany  the  investment  measures, 
thereby  increasing  their  impact.  This  section  includes  a  limited  number  of  examples  to 
illustrate  the  reinforcement  of  measures  within  components.  The  measures  included  in  Policy 
area  1  of  the  plan  contribute  to  the  Finnish  government's  target  of  carbon  neutrality  by  2035, 
which  also  strengthens  the  coherence  between  these  measures.  Moreover,  reforms  and 
investments are mutually reinforcing throughout the components in this policy area. For example, 
Component P1C1 includes a reform to phase out coal use in the energy sector and investments in 
renewable  energy  infrastructure  and  technologies.  These  measures  are  strongly  interlinked,  and 
their  full  implementation  will  reinforce  their  impacts.  Under  component  P2C2,  reforms  and 
investments planned under the “Digital businesses – Real Time Economy programme” (measures 
P2C2R1 and P2C2I1), under “Virtual Finland” (investment P2C2I2) and under “Accelerating key 
technologies (microelectronics, 6G, artificial intelligence and quantum computing)” (investment 
P2C2I3) share with RDI funding measures considered under component P3C3 the same objective 
of  increasing  the  country’s  [total  factor]  productivity  and  competitiveness.  Similarly,  the 
digitalisation  of  the  services  under  “Virtual  Finland”  pursues  a  very  general  objective  of  the 
Finnish  plan  to  create  new  digital  services  and  replacing  existing  processes,  such  as  in  several 
measures planned under policy area 3, especially reform P3C1R3 the “Streamlining of work- and 
education-based immigration and recruitment of international talents”. Measures proposed under 
component P3C1 appear markedly coherent as they all aim to raise employment and to contribute 
to meeting the government’s ambitious employment target of [75%]. This is done by improving 
the  integrated  employment  and  other  types  of  services  (e.g.  the  Nordic  model  of  public 
employment services, the one-stop-shop Ohjaamo youth centres, the work capacity services) and 
by  activating  and/or  bringing  different  groups  in  the  labour  market  (e.g.  older  cohorts,  youth, 
people  with  partial  work  capacity,  international  experts).  The  two  reform  measures  under 
component P3C2 supporting the continuous learning reform (upskilling and reskilling) are both 
mutually  coherent  and  coherent  with  the  national  reform  measures,  hence  providing  a 
comprehensive  reform  package.  While  the  proposed  two  measures  addressing  higher  education 
under component P3C2, i.e. digitalisation of higher education under the digitalisation programme 

67 

 
 
for continuous learning and the investment to increase 600 new higher education study places, do 
not  form  a  very  coherent  reform  and  investment  package  under  the  RRP,  they  are  linked  to 
ongoing  national  measures  (i.e.  9400  new  higher  education  study  places  funded  through  the 
national  budget  over  the  period  2020-22).  Also,  under  component  P3C2,  while  the  measure 
supporting  the  Åland  islands  is  separate  from  the  mainland  Finland  measures,  the  underlying 
objectives are very similar and mutually supportive. 

The measures proposed under policy area 4 are coherent as they all aim to improve equal access 
to  social  and  healthcare  services  according  to  the  general  principles  and  criteria  defined  at  the 
national level. However, there is a loose link between the social and healthcare (SOTE) reform, 
which addresses the organisation and management of social and healthcare services (i.e. transfer 
of responsibility  from  municipalities to  welfare areas) and the proposed investments  to  address 
the care guarantee and equal access (yet to be regulated and not part of the RRP). Finland does 
not have a comprehensive national social and healthcare strategy that would provide a strategic 
basis and a clear roadmap for the proposed national and regional investments. 

Complementarity of measures 

Many measures also support measures contained in other components or strategies related 
to the same policy area. In component P2C1, the plan contains investment in the digitalisation 
of  rail  transport.  Beyond  the  pure  efficiency  objective  pursued  by  the  initiative,  the  proposed 
investment is also expected to help Finland meet its emission reduction targets from the transport 
sector,  which  are  directly  targeted  in  component  P1C4,  and  smooth  its  energy  transition,  as 
targeted  in  component  P1C1.  Under  component  P2C2,  the  emphasis  is  also  put  on  digital 
infrastructure, in particular developing the quality and availability of communications networks. 
This is consistent with Finland’s need for continued efforts to roll out high-speed broadband and 
to improve other digital infrastructure. Again, beyond the pure efficiency objective to rationalise 
logistics that is targeted by the initiative, the planned measures can also be expected to contribute 
to maintaining economic activity, and thereby employment, in remote areas. Such measures are 
therefore  complementary  to  the  measures  proposed  under  component  P3C1  that  all  aim  to 
increase employment. At the same time, the efforts made to roll out high-speed broadband and to 
improve  other  digital  infrastructure  can  also  be  expected  to  contribute  markedly  to  facilitating 
digital  access  to  healthcare  services,  especially  in  remote  areas,  an  objective  sought  through 
measures  proposed  under  social  and  healthcare  component  P4C1.  The  targeted  increase  in  the 
number of higher education study places in component P3C2, aims to raise the overall level of 
tertiary graduates in the country, which, in the longer term, is complementary to the employment 
objective  under  component  P3C1,  and  contributes  also  to  alleviation  of  shortage  of  health 
workers and equal access to care, addressed under component P4C1.  

None  of  the  measures  proposed  within  any  component  (be  it  reforms  or  investments) 
contradict  or  undermine  the  effectiveness  of  other  measures.  There  are  no  significant 
inconsistencies, where aims and measures of one component might harm those of another. Also, 
there are no significant conflicts between the aims, the envisaged implementation, and the effects. 
Due  care  was  given  to  ensure  that  implementation  timelines  of  the  measures  ensure  successful 
delivery. 

68 

 
 
In  view  of  the  challenges  faced  by  Finland,  the  recovery  and  resilience  plan  presents  a 
balanced  approach  between  reforms  and  investments.  As  elaborated  in  Section  4.2  of  the 
plan,  it  addresses  a  significant  subset  of  the  country-specific  recommendations  addressed  to 
Finland in the context of the European Semester, making the proposed reforms and investments 
appropriate. In order to promote wider coherence across instruments, notably with the European 
cohesion policy funds, a balanced territorial allocation of resources is encouraged. 

Conclusion 

Taking into consideration the qualitative assessment of all components of Finland’s recovery and 
resilience  plan,  their  individual  weight  (importance,  relevance,  financial  allocation)  and  their 
interactions,  the  plan  contains  measures  for  the  implementation  of  reforms  and  public 
investments which, to a high extent, represent coherent actions. This would warrant a rating of A 
under the assessment criterion 2.11 of Annex V of the RRF Regulation. 

69 

 
 
 
 
 
5.  ANNEX27 

Measure/ 
Sub-
Measure 
ID 

Measure/Sub-Measure Name 

Estimated 
Costs 
(EUR m), 
excluding 
VAT 

Climate 

Digital 

Int. Field 

Coeff. 
% 

Int. Field  Coeff. % 

P1C1I1 

Energy infrastructure investments 

155 

033 

100% 

033 

40% 

P1C1I2a 

Investments in new energy 
technology – Geothermal energy 

P1C1I2b 

Investments in new energy 
technology – District heating 

36 

032 

100% 

25 

034bis 

100% 

P1C1I2c 

Investments in new energy 
technology – Wind energy 

P1C1I2d 

Investments in new energy 
technology – Solar energy 

50 

10 

028 

100% 

029 

100% 

P1C1I2e 

Investments in new energy 
technology – Biomass 

40 

030bis 

100% 

P1C1I3a 

Renewable energy investment in 
Åland – Wind energy 

1,7 

028 

100% 

P1C1I3b 

Renewable energy investment in 
Åland – Solar energy 

1 

029 

100% 

P1C2I1 

Low carbon hydrogen and carbon 
capture and recovery 

156 

032 

100% 

27 While the total cost of Finland’s recovery and resilience plan exceeds the total allocation of non-repayable 
financial support to Finland, Finland will ensure that all spending related to the investments measures mentioned 
in this table as contributing to climate objectives are fully financed by the funds from the Recovery and Resilience 
Facility. 

70 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                           
Measure/ 
Sub-
Measure 
ID 

Measure/Sub-Measure Name 

Estimated 
Costs 
(EUR m), 
excluding 
VAT 

Climate 

Digital 

Int. Field 

Coeff. 
% 

Int. Field  Coeff. % 

P1C2I2 

Direct electrification and low-
carbon industrial processes 

60 

024ter 

100% 

P1C2I3 

P1C3I1 

Re-use and recycling of key 
materials and industrial side 
streams 

Replacement of heating systems in 
buildings from fossil oil to low-
carbon forms of heating 

P1C3I2 

Low-carbon built environment 
programme 

P1C4I1 

P1C4I2 

P1C5I1 

P1C5I2 

P2C1I1 

Public electricity and gas charging 
and refuelling infrastructure 

Private charging infrastructure 

Gypsum treatment and nutrient 
recycling 

Climate-sustainable measures in the 
land use sector 

Development of quality and 
availability of communications 
networks 

P2C1I2 

Digirail project 

P2C2I1 

Digital economy 

P2C2I2 

Virtual Finland 

P2C2I3a 

Microelectronic value chain 

110 

045bis 

100% 

70 

025bis 

100% 

022 

100% 

077 

100% 

077 

100% 

045bis 

100% 

050 

40% 

053 

100% 

071 

40% 

071 

100% 

011 

100% 

011 

100% 

021 
quater 

100% 

40 

20 

20 

20 

10 

50 

85 

14 

9 

15 

71 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Measure/ 
Sub-
Measure 
ID 

Measure/Sub-Measure Name 

Estimated 
Costs 
(EUR m), 
excluding 
VAT 

Climate 

Digital 

Int. Field 

Coeff. 
% 

Int. Field  Coeff. % 

P2C2I3b 

Development environments for 6G, 
artificial intelligence and quantum 
calculations 

P2C2R1 

Residential and commercial 
property information system 

P2C2R2 

Enhancing the effectiveness and 
transparency of RRP reforms and 
investments by developing 
information systems, administration 
and audit  

P2C3R1 

Effective prevention of money 
laundering 

P2C3I1 

Research investment in cyber 
security 

P2C3I2 

 Cyber security exercises 

P3C1R1 

Nordic model of public 
employment services 

P3C1R3 

Streamlining work- and education-
based immigration and facilitating 
international recruitment 

P3C2R1a 

Reform of continuous learning – 
digital skills 

P3C2R1b 

Reform of continuous learning – 
green skills 

P3C2I1 

P3C2I3 

Digitalisation programme for 
continuous learning 

Continuous learning and 
digitalisation: Åland 

10 

14 

9,5 

10 

5 

5 

20 

20 

4,5 

1,5 

46 

2,437 

72 

021 
quater 

100% 

011 

100% 

011 

100% 

011 

100% 

021 
quinquies 

100% 

021 
quinquies 

100% 

011 

100% 

011 

100% 

108 

100% 

108 

100% 

108 

100% 

01 

100% 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Measure/ 
Sub-
Measure 
ID 

Measure/Sub-Measure Name 

Estimated 
Costs 
(EUR m), 
excluding 
VAT 

Climate 

Digital 

Int. Field 

Coeff. 
% 

Int. Field  Coeff. % 

P3C3I6 

P3C3I7 

P3C3I1 

P3C3I2 

P3C3I3 

P3C3I4 

P3C4I1 

P3C4I2a 

P3C4I2b 

P3C4I2c 

P3C4I3a 

Promoting innovation and research 
infrastructure – national 
infrastructures 

Promoting innovation and research 
infrastructure – competitive funding 
for innovation infrastructures 

8 

25 

009bis 

100% 

019 

40% 

RDI funding package promoting 
the green transition – Leading 
projects 

RDI funding package promoting 
the green transition – Academy of 
Finland 

RDI funding package promoting 
the green transition – Business 
Finland 

RDI funding package supporting 
the green transition – Supporting 
innovative growth companies 

Growth acceleration Programme for 
small enterprises 

Key programmes for international 
growth – low-carbon, circular 
economy and digital renewal 

Key programmes for international 
growth – Health and wellbeing 
skills and technology 

Key programmes for international 
growth – Programme for growth 
and exports of water expertise 

Support for the renewal of the 
cultural and creative sectors – 
Support for creative industries and 
event companies to implement 
pilots 

100 

022 

100% 

45 

022 

100% 

27 

022 

100% 

022 

100% 

022 

40% 

040 

40% 

015 

40% 

015 

40% 

015 

40% 

20 

10 

5 

5 

4 

10 

73 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Measure/ 
Sub-
Measure 
ID 

P3C4I3b 

Measure/Sub-Measure Name 

Support for the renewal of the 
cultural and creative sectors – 
Structural support for cultural and 
creative companies and 
organisations (innovative services, 
production and operating models) 

P3C4I4 

Sustainable and digital growth in 
the tourism sector 

P4C1I3 

Cost-effectiveness of social welfare 
and health care 

P4C1I4 

P4C1I5 

Introducing digital innovations for 
social welfare and health care 
services 

Digital healthcare information 
system on Åland 

Climate 

Digital 

Int. Field 

Coeff. 
% 

Int. Field  Coeff. % 

Estimated 
Costs 
(EUR m), 
excluding 
VAT 

015 

40% 

015 

40% 

095 

100% 

095 

100% 

095 

100% 

30 

20 

40 

100 

4,8 

74