NordenBladet — The Finnish Immigration Service has introduced a new function in the service system to make it easier for seasonal workers to change employers while they are in Finland. The relevant amendment to the Decree of the Ministry of the Interior on Chargeable Services of the Finnish Immigration Service is based on an amendment to the Seasonal Workers Act. Both the amendment to the Seasonal Workers Act and the amendment to the Decree will enter into force on 17 June 2021.
The processing fees for all applications submitted to the Finnish Immigration Service are determined annually by Decree of the Ministry of the Interior on Chargeable Services of the Finnish Immigration Service. The Decree issued for this year will be amended by adding a new function to the service system which allows an employee to file an application for adding a new employer to his or her current seasonal work permit and for the related Finnish Immigration Service’s certificate of extending his or her right to work. A fee of EUR 65 will be charged for adding a new employer and for issuing the certificate, when the application is submitted electronically. If the application is filed in paper form, the fee will be EUR 165.
On application, the Finnish Immigration Service may add a new employer to a valid seasonal work permit if the employer agrees to the terms of employment and accommodation laid down in the Seasonal Workers Act.The amendment to the Seasonal Workers Act is based on the policy set out in the Government Programme of Prime Minister Sanna Marin’s Government, according to which seasonal workers will have better opportunities to change employers. The Government Programme also states that measures to prevent exploitation of foreign labour will be taken into consideration in the reform of labour migration.
NordenBladet — Underpinned by global growth and recovery, growth in Finland’s economy will quicken to reach 2.6% for 2021, according to the updated forecast of the Ministry of Finance, published on 17 June.
The trajectory of the economy has fluctuated considerably in the first part of the year, reflecting the path taken by the COVID-19 pandemic, but a favourable outlook has emerged and become more firmly established. Finland’s economy will make a distinct recovery in the latter part of 2021 and the early months of 2022. The export market will pick up strongly and the investment outlook will become brighter, which will lead to a growth in gross domestic product (GDP) of 2.8% in 2022. GDP growth in 2023 will slow to 1.6%.
General government finances will be in deficit by over EUR 10 billion this year, despite the positive trend in the economy. Next year, the imbalance between expenditure and revenue will narrow considerably, as many of the pandemic-related support measures will come to an end and GDP growth will continue to be brisk. General government finances will nevertheless remain significantly in deficit, and the ratio of general government debt to GDP will continue to rise.
“The latest data indicate that the expected upturn in the economy is getting under way. Demand will recover, employment will grow and the chasm created by the pandemic will close rapidly. The economic upturn now at hand is an ideal time to support structural change in the economy and strengthen public finances,” says Mikko Spolander, Director General at the Ministry of Finance.
Strong growth in global economy to continue
The global economy is on a recovery path as a result of progress with COVID-19 vaccinations, the dismantling of restrictive measures, and substantial monetary and fiscal policy stimulus packages. Due to the timing of fiscal policy stimulus measures, GDP growth will be fastest this year in the United States, and next year in the euro area. China’s economy is also growing rapidly this year. Growth in the global economy will amount to 5.5% this year, 4.5% next year and 3.2% in 2023. World trade is recovering and will grow at a brisk pace as the log jam in consumption needs is freed up. The global trade in goods will be up by 6.9% this year, 4.9% in 2022 and 4.3% in 2023.
Exports and production-related investment about to turn onto rapid growth track
Industrial output will grow due to a powerful global recovery and rising demand for exports. In construction, 2021 is a busy year for house building, but overall the construction sector will not see growth until 2023. Service provision is expected to pick up strongly in the third quarter of 2021 and to continue growing throughout the forecast period.
Private investment will show only slight growth for the first half of 2021, but this will pick up towards the end of the year. Investment in residential construction will not decline as sharply as earlier forecast, as the trend in newbuilds was favourable in the early part of the year. The positive outlook for industry will be favourably reflected in construction in 2022. A strong global economy will spur on investment in machinery and equipment, which will see growth this year and also in 2022, when it will be underpinned by domestic projects. Among other areas of investment, the level of investment in research and development will increase throughout the forecast period, due to favourable support policies, among other things. Foreign trade will grow sharply during the forecast period. Goods exports will climb rapidly in both 2021 and 2022 in the wake of the growth in world trade. Both the export and import of services will return to a growth track, though more slowly than for foreign trade in goods. There will be major differences between sectors, however. Annual growth of exports and imports will be highest in 2022, when a strong rise in foreign trade is expected in services, in particular.
Consumption to rise markedly as restrictions are removed
Private consumption will increase this year more slowly than had been forecast, due to the more cautious removal of restrictive measures. Consumption of services is not forecast to pick up properly until the latter part of this year, and so growth in private consumption will not be at its highest until next year. The aggregate purchasing power of households has not diminished during the pandemic, and the household savings rate was at a record high in 2020. As savings begin to be used, private consumption growth will outstrip the rise in purchasing power. Employment has grown continuously since June 2020, and the recovery in the economy will also strengthen employment growth in 2021 and 2022. Next year, employment will exceed the pre-pandemic level, and the growth in demand for labour will push up the employment rate to 73% in 2023. The employment measures decided by the Government will help support the supply of labour, and the unemployment rate will fall to 6.6% in 2023. Wages and salaries will rise this year more rapidly than in 2020, due to higher contractual pay rises. Earnings are expected to rise by about 2.5% in the next couple of years. Consumer prices will rise quickly in 2021, driven by energy prices. Although the inflation spike caused by energy prices will be transitory, the strengthening level of demand will gradually encourage faster growth in prices.
General government finances to remain significantly in deficit despite economic recovery
The imbalance between general government expenditure and revenue this year will be smaller than was earlier estimated in the spring. General government finances will be boosted by strong employment growth in particular. Public expenditure will, on the other hand, remain high due to the pandemic-related healthcare expenditure and support measures. The forecast takes into account the Government’s proposed third supplementary budget for 2021, submitted to Parliament in May. Despite the favourable growth in the economy, the deficit in general government finances will be substantial, at 4.3% of GDP. Next year, the general government deficit will shrink significantly as GDP growth continues to be brisk and many of the pandemic-related support measures come to an end. General government finances will nevertheless remain considerably in deficit throughout the first half of the decade, and the ratio of general government debt to GDP will continue to rise. The budgetary position of central government in 2021 is estimated to show a deficit of 4.7% in relation to GDP. Central government will cover the majority of costs related to the COVID-19 pandemic. The EU’s Recovery and Resilience Facility (RRF) will also raise expenditure, especially in the period 2021–2023. However, the expenditure increases associated with the RRF will not increase the central government deficit or the deficit in general government finances, because for the forecast period it has been assumed that the revenue from the RRF will meet the expenditure. The pandemic-related support measures for local government finances resulted in a surplus for local government in 2020, and will also ease local government finances in the current year. Although expenditure growth in local government will slow considerably in 2022 as the pandemic recedes, the budgetary position in local government will weaken substantially as the temporary support measures come to an end. The non-recurrent support related to the pandemic will not solve the structural imbalance between expenditure and revenue in local government finances, which is a consequence of the upward pressure on health and social services expenditure as a result of the ageing of the population, and the decline in the proportion of people who are of working age. The upward pressure on local government expenditure will be eased with the health and social services reform in 2023, when the responsibility for organising health and social services transfers to the wellbeing services counties. Even so, local government will continue to be in deficit after the health and social services reform. The budgetary position of the new sector comprising the wellbeing services counties will also show a slight deficit. The deficit will be a result of the investment projects transferred to the wellbeing services counties from the municipalities and joint municipal authorities.
The social security funds are the only part of the general government sector where revenue will exceed expenditure. The surplus of the employment pension institutions will grow this year with the cessation of the temporarily lower pension insurance contributions, which was one of the pandemic-related measures. A temporary contribution rise to offset the lowered contribution, together with payroll growth and increased property income, will boost the surplus to a level of around 1% of GDP in the next few years. The budgetary position of the other social security funds will become more balanced this year, when expenditure on unemployment security falls and the number of lay-offs decreases.
Risks focus on a more positive path
The global economy will grow considerably as countries around the world focus on recovery, and this could boost household and business confidence and be reflected more strongly in private consumption and investment than is assumed in the forecast. Similarly, Finland’s exports could grow at a faster pace if there is a more powerful increase in world trade or if Finland gains a better position on the export market. If the growth in world trade is faster than expected, this would have a positive impact on investments. In the forecast period the investment rate will rise, returning to the level that preceded the financial crisis. In addition, domestic investment plans may also prove to be greater than forecast.
The extent to which the growth in private consumption is expected to exceed the increase in purchasing power depends on how low the savings rate is assumed to go. The actual situation could prove to be quite different, in either direction. If consumer confidence begins to waver, consumption growth could be slower than forecast.
Much depends on the pandemic. Growth in the economy could be below the level forecast if the pandemic is not under control in the second half of this year. A worsening of the virus situation would affect the domestic economy particularly through the impact on private consumption and most especially through the demand for services. The crisis will not be over until the pandemic is under control worldwide.
NordenBladet — The check count of the votes cast in the 2021 municipal elections is now complete. The results of the municipal elections confirmed by the central municipal election boards are available in the Result Service on the Electionsfinland.fi website.
NordenBladet — The Prime Minister’s Office sent a draft of its action plan for maritime policy for a broad round of consultations on 16 June 2021. The purpose of the action plan is to develop and coordinate Finland’s maritime policy and to implement the maritime policy objectives set in the Government Programme.
The goal is to develop maritime policy into one of Finland’s key strengths. The action plan places particular emphasis on the protection of the seas, the maritime cluster and marine production. It consists of concrete measures aimed at achieving the objectives of Finland’s maritime policy guidelines (2019) and the EU’s integrated maritime policy.
NordenBladet — The Civic Space Scan of Finland by the Organisation for Economic Co-operation and De-velopment (OECD) focuses on legislation, practices, civic freedoms and rights, the media operating environment, changes brought by digital technologies and services, the operating environment for civil society organisations (CSOs), and participation by citizens and CSOs.
The report provides information and recommendations that will help to protect and promote the enabling environment for civil society in Finland. Finland is the first OECD member country for which an OECD Civic Space Scan has been undertaken. Finland has repeatedly performed well in comparisons published by international organisations concerning democracy, human rights, press freedom, corruption and governance. Finland also has various programmes and initiatives in progress that support civil society, such as the National Democracy Programme 2025, the National Action Plan on Fundamental and Human Rights, and the Open Government Action Plan. The OECD emphasises that although by international comparison Finland serves as a model enabler of civic space, it is very important that Finland should also recognise and resolve challenges that emerge. Only in this way will it be possible to maintain the favourable situation. The OECD’s final report was published today, 16 June, in an online event opened by Minister of Local Government Sirpa Paatero.
“Civil society has been one of Finland’s strengths, and this report will help us identify areas for improvement to ensure that it continues to be so. Government is expected to be ever more transparent and ready to engage, with civil society, too. Preserving trust also means we need to make sure everyone is included and focus attention on shortcomings in society,” says Minister Paatero.”Congratulations to Finland as the first OECD country to undergo a Civic Space Scan! Its recommendations will help Finland to strengthen its remarkable commitment to promote and protect civic space and citizens’ engagement,” says Elsa Pilichowski, Director for Public Governance at the OECD.
“With this assessment, Finland can play the role of advocate and serve as an example of how important the matter is internationally, too,” says Katju Holkeri, Senior Ministerial Adviser at the Ministry of Finance.“A free and vibrant civil society is at the heart of a functioning democracy. Absolutely essential in this are the rule of law and the implementation of fundamental and human rights that are equal. It is important that the OECD’s recommendations for Finland be discussed comprehensively, both within the working group to be set up and openly among citizens and stakeholders,” says Johanna Suurpää, Director General at the Ministry of Justice.
Next steps
The OECD recommendations will be examined closely in a cross-government working group. The working group will determine which of the recommendations can be pursued in existing programmes or projects and which require further work or additional studies.
NordenBladet — In 2020, the Ministry of Defence granted a total of 234 licences for permanent exports and transfers of defence materiel to 55 countries. A total of 313 licences were granted, 77 of which concerned, for example, introductory, warranty and service exports. The total value of the permanent export and transfer licences granted was EUR 305 million. From a regional point of view, most licences were granted for exports to Europe, while in euros most licences were granted for the Middle East region.The largest number of licences were granted to Norway (24), Sweden (20) and Great Britain (17). They consist mainly of components included in different product categories. In euros, most licences were granted for exports to the United Arab Emirates (UAE) for EUR 139 million, Australia for EUR 29 million, and Austria for EUR 23 million. As to the exports to the UAE, the licences consist mainly of two export licences which are for components of different vehicles and valid for several decades. The largest number of licences, in euros, were granted for exports of patrol boats to Australia and for software radio systems to Austria.The value of actual exports in 2020 was EUR 79.9 million. It fell by almost one third from 2019 and is the lowest in ten years. The three largest export countries were Austria, Sweden and the UAE. Software radio systems were the most exported product to Austria while the exports to Sweden included precision rifles, protective equipment and components in several product categories. Patrol boats were the most exported product to the UAE. Regionally speaking, most of the products were exported to the European Union.When considering a licence application, a case-by-case overall consideration is applied, based on national legislation and international commitments binding on Finland. The Council of the European Union’s Common Position on defining common rules for the control of exports of military technology and equipment (2008/944/CFSP) and the Arms Trade Treaty play a key role. Licence applications are processed in a cross-sectoral export working group where the Ministry for Foreign Affairs is responsible for the foreign and security policy assessment.The entire annual report on the export of defence materiel in 2020 (in Finnish only) is available on the website of the Ministry of Defence. In the near future, it will also be taken to the Government’s joint publication archive Valto.
NordenBladet — The objective of the higher education accessibility plan preparation has been entered in the Government Programme. According to the Government’s education policy report, the Government will decide on the goals and guidelines on measures to improve equality in the higher education accessibility plan by the end of 2021. Senior Specialist Tapio Kosunen, who acted as the rapporteur, handed over his presentation to Minister of Science and Culture Antti Kurvinen on Tuesday, 15 June.
NordenBladet — Minister of Employment Tuula Haatainen spoke about the coronavirus pandemic and its effects on working life at the plenary session of the International Labour Organization’s (ILO) International Labour Conference on 15 June 2021. Haatainen emphasised the importance of tripartite cooperation during crises such as the coronavirus epidemic.“Some ongoing trends in the global labour market are truly worrisome, including the increased use of forced labour and child labour. In addition, there have been infringements of people’s freedom of association and collective bargaining. We must put a stop to these negative developments together and create a fair and equal labour market for all,” Haatainen said in her speech delivered online. One of the conference’s key objectives is to issue a joint declaration on the impact of the coronavirus pandemic on working life.Global challenges in social security and compliance with ILO conventions on the agendaThe International Labour Conference is the highest decision-making body of the ILO and it meets once a year. The International Labour Conference 2021 will be organised mainly online and therefore exceptionally in two parts.In the first part to be held on 3–19 June 2021, the Conference will address current challenges to social security and compliance with ILO conventions in the Member States. The second part of the Conference in November–December will focus on inequality at work as well as skills and lifelong learning.The tripartite structure of the ILO means that workers, employers and governments all participate equally in the organisation’s work. Finland’s delegation also includes representatives of the Government, employers and employees.
NordenBladet — The Real Time Economy project will create the conditions for companies to move to real-time economy. Invoices and receipts will be electronic, for example, and business information will be automatically transferred between different systems. Up-to-date information and its automated processing will increase productivity in both companies and public administration.On 15 June 2021, the Ministry of Economic Affairs and Employment set up the Real Time Economy project for 2021–2024. The Finnish Patent and Registration Office coordinates the project.“The Government wants to make Finland a leader in real-time economy. This project will develop basic solutions for the transition to real time, which in turn will help both companies and public administration to increase their productivity significantly,” says State Secretary Ville Kopra, who chairs the project’s steering group.Government to promote digitalisation and real-time economyThe Real Time Economy project will implement the objectives of Prime Minister Marin’s Government Programme, including:promoting digitalisation in administration and society as a wholedeveloping companies’ operating environmentbuilding the best public administration in the worldintroducing measures to combat the grey economystreamlining regulation and reducing unnecessary administrative burdens for companies.The project is part of Finland’s Sustainable Growth Programme and it is funded by the EU’s Recovery and Resilience Facility (RRF). The Council of the European Union will make a final decision on whether it will approve the national programme during the summer of 2021.Private sector and authorities to implement the project together“Close cooperation between private and public operators is essential for the success of the project and for Finland to become a pioneer in the digital economy,” Kopra says.The Ministry of Economic Affairs and Employment has appointed a steering group that consists of representatives of ministries, agencies and stakeholders. The steering group is tasked with guiding, supporting and monitoring the implementation of the project in accordance with its objectives and managing any significant changes to the project’s costs, objectives and schedule.Composition of the steering groupChair: Ville Kopra, State Secretary Vice Chair: Antti Neimala, Director GeneralMembers:Laura Vilkkonen, Director General, Ministry of Transport and Communications Terhi Järvikare, Director General, Ministry of Finance Maria Nikkilä, Senior Adviser for Information Management, Ministry of Finance Pekka Rehn, Deputy Director General, Digital and Population Data Services Agency Antti Riivari, Director General, Finnish Patent and Registration Office Markus Sovala, Director General, Statistics Finland Timo Laitinen, Director General, State Treasury Markku Heikura, Director General, Finnish Tax Administration Leena Nyman, Adviser, Confederation of Finnish Industries EK Taina Ahvenjärvi, Director, Finance Finland Mari Kiviniemi, Managing Director, Federation of Finnish Commerce Jarkko Huovinen, Director, Association of Finnish Municipalities Jari Seppä, Managing Director, Suomen Taloushallintoliitto Joonas Mikkilä, Head of Digital and Educational Affairs, Federation of Finnish Enterprises Marja Hamilo, Adviser, Technology Industries of Finland
NordenBladet — Minister for Development Cooperation and Foreign Trade Ville Skinnari will visit South Korea on 15–19 June.The aim of the visit is to strengthen the commercial and economic relations between Finland and South Korea. The visit will be hosted by South Korean Minister for Trade Yoo Myung-hee. This will be their first bilateral meeting. During the visit, Minister Skinnari will discuss, among other things, cooperation in science and research with Minister of Science and ICT Lim Hye-sook, and regional climate questions with former UN Secretary General, climate advocate Ban Ki-moon. There will be also other high-level meetings with ministers and representatives of business and industry. In these meetings, the aim is to discuss prospects for cooperation in the commercial and economic, startup and ICT sectors as well as other topical matters. Business Finland and Finnish companies have put together a list of key questions related to efforts to boost business operations. South Korea is the fourth biggest economy in Asia and the tenth biggest economy in global comparisons. The country is particularly well known for its strong electronics sector. In the framework of its Green New Deal recovery plan, South Korea is currently investing heavily on green economy and digitalisation. The New Deal aims to bolster green growth especially by means of implementing energy sector and infrastructure reforms. In addition, South Korea wants to promote digitalisation extensively in several sectors. Information networks, the use of data, artificial intelligence (AI) and digital services are at the heart of the digital transition. The Government of South Korea aims to reach carbon neutrality by 2050.“Based on an OECD survey among its members, the South Korean economy has managed best in tackling the COVID-19 pandemic. There are several examples of common interests that are shared by Finland and South Korea, including technology, digital services, and climate-sustainable solutions for various sectors. The priorities of South Korea’s Green New Deal, digitalisation and green growth, offer plenty of opportunities for Finnish companies,” Skinnari says.