Questions and answers about the impact of the coronavirus 

The Government submitted a supplementary budget proposal to Parliament on 20 March.

This supplementary budget focuses on the costs of combatting the coronavirus outbreak and of the preparedness measures. These costs relate particularly to the work of the Ministry of Social Affairs and Health and the agencies and bodies within its branch of government.

Government submits supplementary budget proposal to Parliament due to the coronavirus (press release 20 March)

The Government submitted the year’s second supplementary budget proposal to Parliament on 9 April.

This supplementary budget includes measures supporting people’s health and livelihoods, improvements in the situation for municipalities, business activity in general, rural businesses, and culture and sports.

Government reaches agreement on second supplementary budget proposal for 2020 and the General Government Fiscal Plan for 2021–2024 (press release 8 April)

The Government submitted the year’s third supplementary budget proposal to Parliament on 8 May.

This proposal focuses in particular on easing the financial situation of businesses and covering the costs of managing the coronavirus situation and combating the effects. In further supplementary budget proposals to be made this year, the Government will also assess the need for other coronavirus-related appropriation increases and, more broadly, measures to support the economy. The Government plans to submit economic stimulus proposals to Parliament in a supplementary budget proposal at the beginning of June.

Government decided on third supplementary budget proposal for 2020 (press release 8 May)

Communicable diseases such as the coronavirus and especially the measures taken to combat it have adverse impacts on the economy in a number of ways. Some of these negative impacts are direct, some are indirect.

Direct impacts arise from workplaces being closed down, absence from work due to sickness, resources used to treat those who have fallen ill, and loss of earnings.

Pandemic has adverse impacts on the domestic demand, especially in the service sector. At the same time, uncertainty keeps growing and the confidence of both businesses and households weakens, leading to a further and significant decrease in the demand.

In addition, disturbances in both domestic and global production chains delay or permanently reduce production.

Communicable diseases and measures to combat them have indirect impacts e.g. on work efficiency. They may also increase the costs of investments and delay decisions on these, reduce inputs in knowledge and skills of the workforce, and cause costs to the public sector.

The duration of the indirect impacts depends on the duration of the pandemic and measures to combat it, and on whether permanent changes take place in consumer behaviour and in the functioning of the production chains.

Ministry of Finance published its latest Economic Survey on 16 April:

Finnish economy hit hard by coronavirus (press release)

Economic Survey, Spring 2020 

You will find information on the EU's response on the website of the Council of the European Union.

Coronavirus outbreak and the EU's response

The State Pension Fund is increasing its investment in the commercial paper market, specifically in commercial paper of Finnish corporations. The investment in commercial paper will be increased to a maximum of EUR 1 billion, depending on the market situation. The Fund will continue to invest in debt securities of companies with a low credit risk, and the investment will be on market terms. The Bank of Finland has also announced a purchase programme of EUR 1 billion for commercial paper.

The Board of the Financial Supervisory Authority has eased the discretionary additional capital and liquidity coverage ratio requirements for Finnish banks. It is estimated that the decision will increase the banks’ lending capacity by up to EUR 52 billion.

The Government may grant a state guarantee of up to EUR 600 million to support Finnair’s financing needs. Parliament has approved the guarantee arrangement.

The Government's second supplementary budget proposal includes a state guarantee programme for shipping companies, the aim being is to secure the liquidity and working capital needs of cargo traffic companies that are critical for security of supply. The maximum coverage of the state guarantees is EUR 600 million in capital.

See also:

Questions and answers regarding the coronavirus and business financing (Ministry of Economic Affairs and Employment)

The Tax Administration will ease the tax payment arrangements for businesses, and the Government has proposed a lower interest rate on the late payment of taxes that are covered by a payment schedule. These will be temporary changes.

Who are the new arrangements intended for?

The scheme is intended for companies experiencing payment difficulties.

Which taxes will be covered by the new arrangements?

The scheme will apply to all types of taxation.

What kind of easing is planned?

The late-payment interest would be 4 per cent, down from the normal 7 per cent.

The first instalment under the payment schedule would become due in three months, when normally it would be due in one month.

What period of taxes payable would the new arrangement apply to??

The easing of late-payment interest arrangements could also be applied retroactively to taxes that have fallen due in March.

The reduced interest rate would be valid for taxes due no later than the end of August.

What do you need to do to take up the new payment arrangement?

If your business has difficulty paying taxes due to the coronavirus outbreak, you can apply for an adjusted payment arrangement with the eased terms in the Tax Administration’s e-service ‘MyTax’.

Who is eligible for the new payment arrangement?

Businesses can request more time to pay if they have difficulty paying taxes.

What could prevent you being eligible for the new payment arrangement?

The new payment arrangement cannot be made if the applicant has a tax debt being recovered through enforcement or if the applicant has failed to file tax returns or Incomes Register reports. A payment schedule that has lapsed in the past may also prevent a new arrangement.

Opening hours and border crossings for commercial traffic are unchanged. Airports are an exception to this, as the Government has ordered airport closures. For commercial traffic, remote systems can also be used to make the customs clearance.

Goods traffic is continuing, and so Customs controls and inspections of goods are conducted as usual.

One of the most significant is that schools reopened in May. Contact teaching resumed on 14 May in early childhood education and care and in primary and lower secondary education. The restrictions were also lifted on the same date for upper secondary educational institutions, but distance learning is still recommended until the end of the term. Outdoor recreational facilities will be opened, subject to restrictions on gatherings.

Borrowing from libraries has been allowed since 4 May. In June, public indoor premises can be reopened in a controlled manner, and the 10-person restriction on gatherings will change to 50 on 1 June.

Assessments will be made of the restrictions and the use of provisions under the Emergency Powers Act.

The restrictions concerning visits to healthcare and social welfare units will remain in force until further notice.

In a state of emergency, municipal management is based on the same management system as in normal circumstances, in accordance with administrative regulations and under the Local Government Act (410/2015). However, special arrangements apply to municipal decision-making. In a state of emergency, municipalities' preparedness obligation is based on the preparedness obligation laid down in the Emergency Powers Act. Under the Act, municipalities, joint municipal authorities and other intermunicipal bodies must ensure, by means of contingency plans, prior preparation of emergency operations and other measures, that their duties will be performed with the least amount of disruption also in emergency conditions (1552/2011, section 12).

Due to the coronavirus outbreak, municipalities should ready their preparedness organisation. The body of the preparedness organisation is made up of the municipality’s senior management group supplemented, for example, by other parties belonging to the local authority corporation (e.g. water supply and services and the support services that are important for the continuity of the municipality’s operation, such as cleaning and catering) and, where appropriate, by other representatives of key stakeholders.

In a state of emergency, the following tasks and areas are of key importance:

• the municipality’s own, broader regional and national situational awareness, access to information and the communication on situational awareness between different parties
• proactive planning and appropriate use of resources
• management in line with the circumstance
• organisation of cooperation and coordination between different parties
• communication within and outside the municipality, taking into account the information needs of residents, cooperation bodies and stakeholders.

Each administrative branch should examine the terms and conditions for managing disruptions, included in the agreements between municipalities and private service providers.

In addition to organising service provision, municipalities should remember to maintain the situational picture concerning the impact of the outbreak and of the state of emergency on the costs and income base of the municipality’s operation.

Electronic systems can be used for holding meetings of local government decision-making bodies. Their use must be in accordance with the administrative regulations of the municipality.  The Local Government Act (410/2015) provides ample opportunities for decision-making to be carried out remotely, on a location-independent basis.

A temporary amendment to the Local Government Act came into force at the beginning of May 2020, allowing a municipality or joint municipal authority to decide on the temporary use of electronic meetings and electronic decision-making procedures in all of its decision-making bodies.

Participants who are, for example, in quarantine can also make use of electronic systems to take part in municipal decision-making. Matters pertaining to a decision-making body can be decided on

• at an actual meeting or
• at a meeting taking place in an electronic environment (electronic meeting), or
• by electronic means prior to a meeting (closed electronic decision-making procedure, possible in bodies other than the municipal council).

Under the temporary amendment to the Local Government Act, the local executive in a municipality or joint municipal authority may decide to introduce new digital meeting arrangements that allow the use of electronic meetings on a more flexible basis than before. This type of meeting may be held via, for example, a videoconferencing connection. The visual and audio connections do not necessarily need to remain continuous and unbroken throughout the meeting. The meeting nevertheless requires that:

• the participants in the meeting can be ascertained reliably,
• the chairperson can lead the meeting and
• the participants can follow the course of the meeting and participate in the deliberations.

Meetings can also be arranged electronically in such a way that some participants are present at the meeting venue and others participate remotely. It these cases, however, care must be taken to ensure that everybody has an equal opportunity to participate.

At electronic meetings and in the electronic decision-making procedure, the municipality must ensure information security and take care that information to be kept secret is not accessible by outsiders. In addition, the municipality must ensure that meetings which are publicly accessible can still be accessed and followed when the meeting is held remotely, as an electronic meeting. Under the temporary provisions of the Local Government Act, the local executive may decide that publicly accessible meetings can only be followed electronically.

• Guide to digital meetings and digital decision-making procedures in municipalities. Publications of the Ministry of Finance 2019:6; in Finnish, abstract in English)

The rule does not concern local government bodies. Meetings are not prohibited.

As a precautionary measure, meetings may be held less frequently and only to decide on matters that are mandatory or urgent. The number of members of the public allowed to follow public local council meetings should be limited to ten (50 persons starting from 1 June), and electronic channels should be used to follow the meetings.

The Government’s instruction to avoid meetings does not concern the positions of trust in local government. Persons holding positions of trust who are over 70 years old may also participate in the meetings of local government bodies. However, quarantine or health considerations may in practise constitute an obstacle to participating in a meeting.

The magnitude and duration of the impact of the pandemic on local government finances will continue to be closely monitored. The crisis is increasing local government spending on healthcare and social welfare and at the same time reducing economic growth and employment, and therefore tax revenue, as well as municipal income from charges and fees. According to the estimates given in the Local Government Finances Programme (in Finnish), the biggest impact of the coronavirus crisis will be caused by the loss of tax revenue. The effects differ from one part of the country to the next, and from one grouping of municipalities to another, depending on factors such as their demographic and economic structure.

Municipalities can, to some extent, influence the economic effects of the crisis. For example, the increase in expenditure will be significantly affected by how municipalities are able to transfer employees to other tasks from activities that have been reduced, and to adjust expenditure on these activities.

Local government and central government should do what they can to prepare for what could be a long period of disruption. The preparations should also take into account that the recovery may be long, even after the immediate crisis is over.

The Government is monitoring the impact of the crisis on municipal expenditure and income, and is also keeping track of how well municipalities are able to secure financing. The Government is also exploring ways of providing financial support to municipalities. The principle underlying such support is that it should be effective: the right instruments in the right place at the right time.

Agreed measures for supporting municipalities:

• Government to provide more than EUR 1 billion to support municipalities during coronavirus crisis 
  • Central government will use discretionary government grants to reimburse hospital districts directly for the extra costs, such as spending on intensive care, caused by the coronavirus crisis.
  • The municipalities’ share of corporation tax revenue will be increased for a fixed period until the end of this year.
  • Central government transfers to municipalities for statutory basic public services will also be increased to the end of 2020.
  • Discretionary central government transfers to local government will be increased.

The aim is to incorporate these support measures into a fourth supplementary budget proposal, to be submitted to Parliament in early June.

• Municipalities to be reimbursed for temporary fall in tax revenues (effective 1 May 2020)

Even in these circumstances, the municipal executive must deal with the financial statements for 2019 by the end of March and then submit them to the auditors. The local council must consider the financial statements before the end of June.

The Accounting Board’s local government sub-committee cannot change the timetable for drawing up and submitting the financial statements, as provisions on these tasks are laid down in the Local Government Act.

Municipal financial statements can be signed electronically. The preparation and signing of the financial statements are described in the general instructions of the Accounting Board’s local government sub-committee on the municipal annual report and financial statements.

Residents, service users, organisations and other communities must be informed about the municipality’s operation. Timely, regularly updated, clear and fact-based communication is essential in a crisis situation.

Municipalities should use clear and understandable language and take into account the needs of their different resident groups.

In a state of emergency, municipalities must also provide sufficient information on municipal services, the handling of matters, any decisions taken and the effects of these decisions.

The Digital and Population Data Services Agency will continue to conduct the ceremonies. However, there will be fewer appointments available for civil ceremonies, especially in smaller offices. We ask the couples to bring their own witnesses to the ceremony, but not more than four persons.

Visits to the Agency have been restricted because of the coronavirus. Until 13 May 2020, visits to the Digital and Population Data Services Agency’s customer service points need to be booked in advance. The Agency’s telephone service has extended opening hours: 9.00–15.00. Online services are available as normal. All services for personal customers can be found at https://dvv.fi/en/individuals. 

At the moment, the situation is largely stable, but any developments will be closely monitored. An exceptional situation may lead to unforeseen failures or overloads that may have an impact on digital public services. Critical services will be secured in all circumstances. There is limited capacity for simultaneous use, which means that certain digital services may need to be prioritised. This may mean temporary restrictions on less critical services.

Network capacity for remote access is being continuously increased and load sharing is in place. This will continue, and network capacity is being constantly monitored. If necessary, telecommunications traffic for remote access will be prioritised. Many tasks can also be performed without remote access.

Valtori’s key task is to ensure that its services operate effectively and without disruption. In support of this in the current situation, an emergency management team meets daily. To ensure effective and undisrupted operation of its services, Valtori draws up various plans, , acts in accordance with these and has  contingency procedures. It closely monitors the situation, ensuring an effective response to any new developments. Critical services are organised in such a way that they can continue to operate in exceptional circumstances. The identification of which services are critical is made in collaboration between Valtori and its client agencies.