Tue. Oct 4th, 2022

Helsinki, 1 September 2022

Finnish Government proposes EUR 1.3 billion in appropriations for the Ministry for Foreign Affairs. Support for Ukraine will continue to be at the heart of the Ministry’s budget in 2023.

Finland’s foreign and security policy aims at strengthening Finland’s international position, safeguarding its independence and territorial integrity, strengthening the security and wellbeing of Finland and its people, and ensuring that Finnish society functions efficiently.

Following Russia’s invasion of Ukraine, a fundamental change has taken place in the security and operating environment of Finland and Europe. Russia’s act of aggression is a blatant violation of international law and poses a grave threat to international peace and security. The Russian invasion of Ukraine has long-term effects on the security environment in Europe and in Finland’s neighbouring areas. Its effects are also reflected widely in global developments.

Based on a reassessment of the security policy situation following this development, Finland decided to apply for NATO membership. NATO membership would strengthen Finland’s security in the changed security environment and would also improve stability and security in the Baltic Sea region and Northern Europe. The need for additional resources arising from Finland’s membership in NATO will be reviewed later.

Operating expenses of the Foreign Service

The proposed operating expenses total EUR 256 million, of which EUR 1.0 million will be generated from the EU’s Recovery and Resilience Facility (RRF).

The Foreign Service serves the entire state administration, citizens, companies, organisations, the media, and other cooperation partners. The rapidly changing operating environment requires that the Foreign Service is capable of continuous foresight, monitoring and analysis, and flexible use of resources.

The activities of the Foreign Service rely on a comprehensive network of diplomatic and consular missions abroad. The network has an indisputable significance for the security and wellbeing of Finland and people in Finland. The need to maintain the post-pandemic capacity of the network is highlighted in the Ministry’s budget for 2023. Next year, Finland’s network of diplomatic and consular missions will have 93 offices, including the Embassy in Islamabad (Pakistan) and the Consulate General in Mumbai (India) due to open in 2022.

The Ministry for Foreign Affairs will allocate additional resources to the handling of sanctions and export authorisations to help the business community. The Foreign Service together with the rest of the Team Finland network will continue to seek new export opportunities and support the export efforts of Finnish companies. The Ministry will continue to accelerate the entry processes handled by Finland’s mission abroad as part of the Government’s measures to ensure the availability of skilled labour.

Revenue generated by the EU’s Recovery and Resilience Facility will continue to be used to develop the digital Virtual Finland platform. The aim is to create a platform of integrated service paths for companies, employees and students arriving in Finland.

Crisis management

In line with the Government Programme, a stronger priority in Finland’s foreign policy will be placed on the prevention of conflicts and on mediation and peacebuilding.

An appropriation of EUR 1.9 million is proposed for mediation. Finland’s participation in the UN’s mediation and dialogue processes and in other similar processes will be increased. There will be a shift in activities away from the funding of special projects towards more active promotion of peace.

Finland will continue its active participation in international crisis management. In international crisis management tasks, Finland focuses on Lebanon and Iraq, but it also participates in operations in Kosovo, Africa and the Mediterranean. A total of EUR 50.1 million is proposed for the material and administrative costs of Finnish crisis management contingents. Finland will continue to increase the participation of civilian personnel in crisis management. EUR 19.2 million is proposed for civilian crisis management.

The number of personnel recruited to military crisis management posts is estimated to total up to 400 person-years in 2023, while approximately 140 experts will be recruited for civilian crisis management in 2023.

Development cooperation

Finland’s aim in international development cooperation is to eradicate extreme poverty, reduce inequality and implement human rights. Safe living conditions, human rights and people’s ability to influence their affairs, sufficient livelihoods and a good living environment also strengthen international security, the economy and the environment.

In addition to supporting Ukraine by providing defence materiel and other material assistance and by helping Ukrainians who are fleeing the war, Finland provides Ukraine significant help through development cooperation funds.

In 2023, Finland will allocate additional support to Ukraine from the development cooperation appropriations. This support will total EUR 30 million. The Government has decided to propose an additional appropriation of EUR 20 million for development cooperation. EUR 10 million of the support to Ukraine will be covered by the current development cooperation appropriations.

The next year’s funding will be used to support Ukraine in its immediate needs and to prepare for reconstruction in Ukraine. Based on preliminary plans, the appropriations will allocated through the EU and international financial institutions, among other channels. Ukraine has been one of Finland’s partner countries for development cooperation since 2014. The priorities of this long-standing cooperation are quality of education, rule of law work, energy security and climate resilience.

The Ministry for Foreign Affairs will also support Ukraine through humanitarian assistance and in the form of loans and insurance.

Finland’s overall public development cooperation expenditure is estimated at EUR 1.2 billion, which corresponds to around 0.42% of gross national income (GNI). It is proposed that an appropriation of EUR 713 million and mandate commitments of EUR 397 million be allocated to official development assistance (ODA) administered by the Ministry for Foreign Affairs. The expenditure arising from the commitments will be incurred after 2023. It is also proposed that the capital of Finnfund be increased by EUR 10 million and that approximately EUR 130 million be allocated to financial investments in development cooperation. Finland’s contribution reported as climate finance is estimated at approximately EUR 232 million in 2023.

Other appropriations

Approximately EUR 104 million is proposed for membership fees and contributions to international organisations. Finnish contributions to the UN account for the bulk of this appropriation.

EUR 3.0 million is proposed for Baltic Sea, Barents and Arctic cooperation. Regional cooperation is an important means of promoting stability, security, sustainable development and economic opportunities in the Baltic Sea, Barents and Arctic regions. The emphasis will be on projects that support Finland’s Chairmanship of the Barents Euro-Arctic Council in 2021–2023.

Source – Finnish Government