Finland’s northern and eastern regions have good reason to fear the loss of EU millions: the amount will decrease and Helsinki would decide on the money.
Since the accession treaty, Northern and Eastern Finland have had a special position in the distribution of EU money. This is seriously threatened in the upcoming budget period.
Probable Decrease Of Regional Subsidies
The EU subsidies for the upcoming budget period are now being distorted, and this is worrying in Northern Finland for two reasons.
The amount of regional subsidies will probably decrease and, worst of all, the Commission wants to transfer decision-making power over their use to the member states. In Northern and Eastern Finland, there are fears that Western and Southern Finland would benefit from this.
So far, the North has benefited a lot from the distribution criteria, because it has received more support than Southern and Western Finland relative to its population due to its sparse population and long distances.
The European Union budget is always prepared for seven years at a time. The budget for 2028–2034 is currently being prepared at full speed.
In the summer, the European Commission proposed that the budget for the coming seven-year period would be 2,000 billion euros, compared to 1,200 billion at present.
According to the proposal, the budget for cohesion, i.e. funding to equalise regional development disparities, would be 865 billion euros. In euro terms, cohesion funds would not decrease, but their percentage would drop from 60 to 43.
In reality—and the Commission office also knows this—cohesion funding is now being reduced. No one believes that the proposed increase in the budget would go through, because so many member states will not absorb any growth into it.
Defence Spending Will Dominate The New Budget
As a result, the amount of cohesion funds is likely to fall. Defence in particular will dominate the new budget. Increasing defence spending does not in itself cause opposition anywhere in Finland.
The high percentage of cohesion funds may sound high at first glance. The reason is historical.
When the EU’s internal market began to be developed in the 1980s, it was expected that regional concentration would follow. As a counterbalance, the cohesion funds mechanism was developed to provide security for less developed regions.
Special Status Of Eastern And Northern Finland
Special status of Eastern and Northern Finland in the distribution of funds was negotiated upon accession to the EU in 1995. Finland also had the special status of sparsely populated areas recorded in the EU Treaty.
Now there is tension in Northern and Eastern Finland because the European Commission led by Ursula von der Leyen seems to be increasing the decision-making power of the member states in the distribution of funds drastically. They would rather maintain the principles of the Treaty.
In turn, in Southern and Western Finland, it has been thought for years that the distribution of the cohesion pot is unfair: there should be tougher competition for EU subsidies, in which case the money would be used more cost-effectively.
The Committee of the Regions in particular represents the side of the European Union’s sparsely populated areas in the distribution of funds. Its task is to bring the voice of local and regional governments to Brussels.
The committee, which employs 500 people, is headed by Hungarian Kata Tüttő. There are eight Finnish members of the committee. One of them is Oulu local politician Mirja Vehkaperä.
The Committee of the Regions does not have any real power, such as voting rights. However, the Commission and the Council of the European Union, the so-called Council of Ministers, have a duty to consult it on matters that have an impact at the local level.
The Committee of the Regions organised a Regions Week in Brussels in mid-October, inviting thousands of representatives of regional projects and agencies.
The message from Europe’s sparsely populated regions is in many ways cross-party and unified: they believe that cohesion funding should not be cut as much as is being proposed in the coming budget period.
Although an event gathering thousands of participants may sound big, on the scale of Brussels it is just one event among many others. A demonstration in favor of cohesion policy was held during the week, but that was badly overshadowed by the giant demonstration against the Belgian government’s austerity measures.
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Cutting Cohesion Funds Is Hurting Eastern And Northern Finland
The dispute is about big money. In the 2021–2027 regional and structural policy programming period, public funding for the program in Finland was 3.16 billion euros, of which EU funding accounted for 1.94 billion euros.
If von der Leyen’s will holds and the member states’ control over the use of cohesion funds expands, eastern and northern Finland will turn their attention to the next Finnish government.
Of the parliamentary parties, the Center Party has historically profiled itself most strongly as a regional advocate. It is quite certain that the principles for distributing EU funds will also be discussed in Finnish government negotiations in spring 2027.
Source: Lapinkansa (in Finnish)