Questions and answers about the impact of the coronavirus
Impact on the economy
The Ministry of Finance’s next economic forecast, to be published in April, will provide the basis for the Government's decision on spending limits. In the forecast, the Ministry of Finance will take into account all the latest detailed data available on the impact of the coronavirus outbreak.
The European Commission proposes to direct EUR 37 billion of unspent structural and investment funds to cover costs arising from the coronavirus situation. Part of these funds would be granted as direct budgetary support and part would be available as credit that can be granted to businesses.
In addition, the Commission and European Investment Bank have agreed on granting EUR 8 billion in aid credits to SMEs. Efforts are being made to rapidly raise this amount to EUR 20 billion.
The EU’s public finances and state aid rules will be applied in such a way that they do not create an obstacle to dealing with the coronavirus situation.
The European Central Bank has decided on important measures to secure the liquidity of banks and access to credit for businesses.
The State Pension Fund has launched additional investment in Finnish commercial paper. Depending on the market situation, the Fund will increase its investment in the commercial paper market to a maximum of EUR 1 billion. The Fund will continue to invest in debt securities from companies with a low credit risk, trading on market terms. The Bank of Finland has also announced a purchase programme of EUR 1 billion for commercial paper.
The Board of Directors of the Financial Supervisory Authority has eased the discretionary additional capital and liquidity requirements of Finnish banks. It is estimated that the decision will increase the banks’ credit sanctioning authority by up to EUR 52 billion in computational terms.
The Ministerial Committee on Economic Policy has provisionally agreed that the Government may grant a state guarantee of up to EUR 600 million to support Finnair’s financing needs. The guarantee arrangement requires the consent of Parliament.
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 Ministry of Finance is preparing 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’ from 25 March 2020.
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.
Impact on the municipalities
Closure of schools and more flexible deadlines and obligations concerning certain non-urgent healthcare and social welfare services. Further provisions on these have been issued by Government Decree.
If necessary, other elements of the Emergency Powers Act may become applicable later on.
Public-sector employers will instruct public-sector employees to work from home if their duties make it possible to do so. In the case of critical personnel, exceptions will be made to the provisions of the Working Hours Act and the Annual Holidays Act in both the private and public sector.
When the state of emergency caused by the COVID-19 coronavirus outbreak was declared, the right to contact education was initially limited to those pupils in years 1–3 whose parents or carers work in sectors that are critical to the functioning of society. However, the definition of ‘critical sectors’ gave rise to varying interpretations among primary education providers, so it was decided to make the policy more specific and abandon the definition of ‘critical sectors’ in education. The amendment entered into force on 23 March 2020.
See Ministry of Education and Culture press release of 20 March 2020 (only in Finnish)
(This answer has been edited according to the amendment of the government on 20 March.)
The premises of schools, educational institutions, universities and universities of applied sciences as well as civic education and other liberal education institutes.
As an exception, municipalities must continue to provide both pre-primary education organised in schools and contact education for years 1–3. However, it is not compulsory to go to school and it is strongly recommended that, if at all possible, years 1–3 attend school through distance learning.
Museums, theatres, cultural venues, libraries, mobile libraries, hobby and leisure centres, swimming pools and other sports facilities, youth centres, clubs, organisations’ meeting rooms, daytime activities for the elderly, rehabilitative work facilities and workshops.
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.
The emergency situation is going to affect all activities of municipalities, in one way or another, directly or indirectly, immediately or with some delay. The impacts may be related to changes in customer needs, keeping the personnel healthy, and economic aspects.
Closure of schools and more flexible deadlines and obligations concerning certain non-urgent healthcare and social welfare services. Further provisions on these have been issued by Government Decree.
We should be prepared for a growing need for social welfare services, including home services and child protection.
Water supply and services, waste management and energy supply managed by municipalities constitute an important basic infrastructure of society that must be secured.
Ensuring municipal support services such as food and catering, cleaning ad ICT services is also highly important in exceptional circumstances.
Every effort must be made to secure reliable and undisrupted rescue services in all circumstances.
Electronic systems can be used to hold meetings of local government bodies, in accordance with the administrative regulations of the municipality. The Local Government Act (410/2015) provides ample opportunities for decision-making irrespective of physical location. Those in quarantine can use electronic systems to participate in municipal decision-making.
Matters pertaining to a local government body may be decided
- at an actual meeting,
- at a meeting taking place in an electronic environment (electronic meeting),
- or by electronic means prior to a meeting (closed electronic decision-making procedure, not allowed for the local council).
Holding electronic meetings is subject to the condition that those declared present are in an equal position in terms of being seen and heard. The meetings must be arranged in such a way that both of these are ensured. Electronic meetings can also be organised so that some people are physically present and some via remote connections, provided that equal opportunities to participate are guaranteed.
At electronic meetings and in the electronic decision-making procedure, the municipality must take care of information security and ensure that information to be kept secret is not accessible by outsiders.
- 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, 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 are closely monitored. It has already become clear that the outbreak will increase municipal health care expenditure. Economic growth and employment will decrease, resulting in a negative impact on the general government and local government finances and reducing municipal fee revenue. Any decrease in tax revenue will have an immediate effect on munic-ipal finances.
To some extent, municipalities can influence the impact of the crisis on the economy. For example, the increase in expenditure will be significantly affected by how municipalities are able to transfer employees in reduced func-tions to other tasks and to adjust the expenditures on these activities.
Local government and central government should both do as much as possible to prepare for a disruption that may last for a long time. Municipalities should also prepare for a long recovery from the crisis after the immediate outbreak.
The Government is monitoring the impact of the coronavirus on municipal expenditure and income. It is also keep-ing track of how effective municipalities are in securing financing. In addition, the Government will explore ways of providing financial support to municipalities.
The supplementary budget proposal due to COVID-19 was submitted on 20 March 2020. The supplementary budget deals with the costs of combatting the coronavirus outbreak and of preparedness, and with essential and urgent budgetary needs that are directly related to the outbreak, such as securing business financing.
Local government's financial prospects have been difficult for a long time. In the near future, attention will largely turn to the ongoing crisis and to the ways in which municipal crisis management can be supported.
(Updated on 23 March)
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.
If necessary, other elements of the Emergency Powers Act may become applicable as the situation changes. The Government will immediately inform municipalities if new provisions are issued.
Impact on the Digital and Population Data Services Agency and digital services
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.