11/09/2020

Are we in or out?

Europe’s recovery from the economic crisis requires cooperation, which is also needed in developing the battery value chain, reminds Reijo Munther in our blog.

Reijo Munther
Chief Advisor, Business Finland

The EU’s new industrial strategy was announced in the spring. For Europe to reach its objective of being carbon neutral by 2050, the strategy must be implemented urgently. The national objective set by our government is even more ambitious: Finland will be carbon neutral by 2035.

The coronavirus epidemic, however, has made our leaders rethink the possibility of making any economic reforms under the current conditions. The effects of lockdown measures have been extensive, and a EUR 750 billion economic stimulus plan was needed on top of the previously decided fiscal support measures. This will almost double the Commission’s budget.

The recovery package’s funds are also tied to the EU’s strategic objectives, meaning that they can only be used for investments in the green economy, digitalisation, research and development. Only healthy companies impaired by the corona crisis will be eligible for fiscal support for securing their business continuity and investments in the future. 

Fling open the doors!

The best way to survive a crisis is to ensure your ability to adapt and establish new partnerships. The Commission’s toolkit emphasises the importance of building European value chains. It includes, for example, the process of Important Projects for Common European Interest (IPCEI) for facing global challenges in select strategic business areas.

Not one but two IPCEI have evolved around the battery industry, and one of them is already active. Finnish involvement is strong. Batteries obviously have a role to play in climate change mitigation, but Finland must also make sustainable choices related to battery production now and in the future. Our strengths lie in our environmental and recycling expertise and in our efforts to improve the traceability of minerals in order to gain a competitive edge.

Investments are needed badly, and they should be aimed at revitalising and renewing economic activity. Invest EU, Innovation Fund and EIB are all included in the Commission’s toolkit, working towards the same goal. For example, EIB will be allocating one billion euros to the development of the battery value chain, including the processes related to raw materials.

Research and development should not be forgotten when trying to ensure that investing will have the desired impact. Research also serves as the basis for the policies for verifying that the processes are environmentally friendly. The call for the upcoming Horizon Europe research and innovation programme is currently in the preparatory phase, so now is the time to make sure that the national contact points know what our strengths are. The Green Deal call for projects has also already been launched as part of the current Horizon programme.

Get in there!

I wanted to start this blog by writing about the recovery fund. It will provide significant additional funding to the aforementioned EU programmes that support the current (fourth) industrial revolution. The benefits of this massive effort will go directly to future generations.

Rather than being a source of money for us, the EU is an internal market of 550 million inhabitants, and being successful there requires genuine competitiveness. Half of Finland’s exports already go to Europe.

To maintain our competitiveness, we need the capacity to fully take advantage of the opportunities that the EU has to offer. Sifting through the details of various funding programmes is hard work. External assistance is available, though, and forging partnerships should be made a priority. Cooperation means business. Your customers are already participating in EU projects!

Reijo Munther

Chief Advisor, Business Finland