A joint action to strengthen the recovery would benefit Finland’s exports and the national economy. However, it is essential to choose the right instruments to bring the Member States out of this economic struggle and Finnish Industries believe that the financing should be done by preferring loan based instruments.
Ursula von der Leyen’s Commission is soon expected to publish a recovery proposal for the EU mapping out the way European reconstruction would be financed. According to preliminary information, the Commission will propose a new recovery fund, which would focus on accelerating investments. It is not yet certain whether the focus will be on loan or grant financing.
Accelerating EU investments will benefit Finland and Finnish companies, comments Confederation of Finnish Industries’ Director General Jyri Häkämies:
“Finland’s economy and exports are based on demand for investment goods. As much as 60% of Finland’s exports go to the EU’s internal market. Therefore, the success of Finland’s reconstruction depends to a large extent on investment activity in the EU single market. “
An investment recession is feared to already be at the doorsteps of the EU and according to a recent Commission forecast, EU investment will fall by more than 13% by 2020. Regarding the targeting of the EU funding, the Commission has highlighted issues such as digitalisation, green economy as well as health sector. In addition to these important areas, Finnish industries find it important to focus on product development, research and innovation and other activities that support the renewal of the European economy.
Joint action is needed
The recovery and operational capacity of the entire EU and the euro area are a necessity for Finland and the Finnish business community. The reality is that without joint action, the EU will not emerge from the crisis, and neither will Finland. However, accelerating investments should in principle be done by preferring lending instruments. Finland should be constructive in its approach to the EU’s joint recovery measures. If we remain absolutely opposed to any kind of joint action, we may become a bystander when others resolve the matter on behalf of Finland as well.
There are also far-reaching choices to be made in terms of policy content of the recovery plans. Dynamic business activity is needed to drive European reconstruction. Therefore, a pro-business growth policy, strengthening the internal market and keeping the global market open through active trade policy are essential.