Finnish working group proposes temporary special economic zone for Eastern Finland

A working group focused on the development of Eastern Finland has proposed in its draft program that the government explores the establishment of a temporary special economic zone in the region. This zone could feature tax incentives or other targeted support. The draft suggests that the principle of equality enshrined in the constitution does not pose a significant obstacle to regional tax incentives, though it requires careful assessment of any support measures. Furthermore, EU law does not prohibit the use of regional tax incentives.

To promote tourism and education in Eastern Finland, the working group’s draft outlines measures designed to enhance these sectors. Kymenlaakso and South Karelia are set to receive some of the highest levels of business subsidies, while other regions in Eastern Finland already benefit from elevated support. Additionally, it is proposed that these provinces receive extra funding from the European Regional Development Fund (ERDF). The draft also emphasizes the need for investments in educational offerings and research and development activities to ensure skill development in Eastern Finland. Moreover, there is a call to increase wind power production in the region, with plans to establish one to three new compensatory areas for wind energy.

The working group includes representatives from the provinces of Kymenlaakso, South Karelia, South Savo, North Savo, North Karelia, and Kainuu, along with key ministries essential to the program’s content. According to the Ministry of Employment and the Economy, the aim of the initiatives for Eastern Finland is to foster economic growth and vitality in the region while also enhancing Finland’s security of supply and self-sufficiency in light of the changing security and geopolitical landscape. The draft program is currently circulating for feedback.