Budget, expertise and defense are the topics of discussion – Brussels is looking for solutions to the challenges

As I write this, May Day has been celebrated, so now is a good time to review the spring EU news and look towards the challenges ahead. During the spring, the European Commission has issued many high-level strategies that will begin to take shape in the coming months.

One of the biggest topics of discussion is the MFF initiative, the Commission’s initiative on the EU’s multiannual financial framework, which will likely be released in July. The initiative is significant, as it will serve as the basis for negotiations on the Union’s budget for 2028–2034. Some preliminary information about the content of the initiative has been available during the spring, but more detailed guidelines are still unclear. According to a previously published communication by the Commission, it hopes that the future budget will be simpler, more flexible and more effective. Funding programmes will be merged and their number will be reduced.

Our office has brought forward the views of Tampere and Pirkanmaa, among other things, through the Commission’s open consultation. With regard to the possible national single plans, it is of paramount importance that cities and regions are genuinely involved already in their planning phase. The recovery and resilience instrument created as a result of the COVID-19 pandemic was not a successful experience from the perspective of involving regions and cities, and should therefore not be taken as a model too much in the planning of the future financial framework. It is also important to focus on creating European added value instead of using too much budget money to solve national problems.

The European Parliament also took a position on the multiannual financial framework when its Budget Committee decided on its proposal as Parliament’s guidelines. Parliament is against the idea of ​​using the Recovery and Resilience Facility as a model for drawing up national spending plans, as it believes that local and regional actors should be better taken into account. Instead of the Competitiveness Fund planned by the Commission, Parliament sees it as important to draw up a targeted fund based on the InvestEU programme and the Innovation Fund, which would help to better mobilise private and public money. Parliament calls for increased defence investment without cutting other important areas such as social and environmental spending. This arrangement understandably creates pressure to increase the budget. Parliament is therefore in favour of joint debt, as it is used to respond to major European crises. The hot potato is likely to be the EU’s own resources, the development of which, for example, the Commission has called for. Own resources refer to funds that are collected directly from the EU level to the EU budget, rather than from the member states. They could be collected, for example, through a digital tax.

In parallel with the preparation of the Multiannual Financial Framework, the Commission has started to implement the guidelines of the Competitiveness Compass published at the beginning of the year. More Omnibus packages aimed at simplifying regulation are coming in May and June, as the Commission tackles the regulation of SMEs and the defence sector. Other avenues for financing defence are also opening up, as the Commission has proposed the possibility of using funding for defence in many EU funding programmes. The previously published Defence White Paper highlights Europe’s most important priorities and needs in order to achieve a sufficient level of defence capability by 2030. Funding naturally plays a major role in the development of defence, but at the same time, EU countries must coordinate their defence procurement more effectively and strategically. Ukraine must be supported in both the short and long term. Better integration of the country into the European defence infrastructure is important. Ukraine has first-hand experience with various defence technology products, which should also be utilised elsewhere in Europe.

When talking about defense technologies, the conversation often turns to dual-use products. Many people think that financing dual-use products should be easier. But what exactly are these dual-use products? Simply put, they are products that can be used in both civilian and military applications. Our region of Pirkanmaa has a lot of different expertise related to these technologies, so we will publish an article on our website where we take a closer look at the dual-use products manufactured in Pirkanmaa.

In addition to defence, discussions related to skills have been topical. The Skills Union, previously published by the Commission, provides guidelines for skills development, lifelong learning, better allocation of skills within the EU according to the needs of different regions, and better identification of skills. The topic is central in both the short and long term, as in an ageing Europe all skills must be put to use as well as possible. Citizens’ basic skills are too weak in many countries, which is why investments must also be made in basic education. Without relevant basic skills, it is impossible to build high-level skills, for example in artificial intelligence and the defence industry. Europe must also be a more attractive environment for top talent to come and work. The EU must be able to respond to changing skills requirements if it wants to improve its crisis resilience and competitiveness.

EU Office on a trip to Tampere

After Easter, our EU office Katriina and Joni visited Tampere to get to know a few companies in more detail and discuss current EU topics. The joint visits between the Tampere Chamber of Commerce and our EU office were successful, as we received a lot of concrete information about the views and needs of companies in our region.

As a greeting to Brussels, companies hoped for less intrusive regulation. The predictability of the regulatory environment is of paramount importance when planning their own operations. I also believe that the importance of technology neutrality in emission reduction goals is essential. For example, in the manufacture of large agricultural machinery and their engines, companies can reduce emissions by other means than simply increasing electrification. Defining certain technologies from above is not desirable from the perspective of companies, if the goal is to reduce the carbon footprint.

The company visits provided much more insight into the strengths of our region and the concerns of the operators regarding EU regulation and funding. We are happy to discuss potential challenges or opportunities and hear concrete examples of how different regulations affect the company’s operations and everyday life.

In the first week of May, we head to Strasbourg and the European Parliament plenary session. The calendar is starting to fill up with meetings, so we have an effective advocacy journey ahead of us.