EUROPEAN COMMISSION
Brussels, 8.9.2026
COM(2026) 555 final
2026/0254(BUD)
Proposal for a
DECISION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL
on the mobilisation of the European Globalisation Adjustment Fund for Displaced Workers following an application from Finland – EGF/2026/004 FI/Etelä-Suomi and Helsinki-Uusimaa paper
EXPLANATORY MEMORANDUM
CONTEXT OF THE PROPOSAL
1.The rules applicable to financial contributions from the European Globalisation Adjustment Fund for Displaced Workers (EGF) are laid down in Regulation (EU) 2021/691 of the European Parliament and of the Council of 28 April 2021 on the European Globalisation Adjustment Fund for Displaced Workers (EGF) and repealing Regulation (EU) No 1309/2013 1 .
2.On 19 May 2026, Finland submitted an application EGF/2026/004 FI/ Etelä-Suomi and Helsinki-Uusimaa paper for a financial contribution from the EGF, following displacements in the paper industry in the NUTS 2 regions of Etelä-Suomi (FI1C) and Helsinki-Uusimaa (FI1B) in Finland.
3.Following its assessment of this application, the Commission has concluded, in accordance with all applicable provisions of Regulation (EU) 2021/691, that the conditions for awarding a financial contribution from the EGF are met.
SUMMARY OF THE APPLICATION
|
EGF application |
EGF/2026/004 FI/ Etelä-Suomi and Helsinki-Uusimaa paper |
|
Member State |
Finland |
|
Region(s) concerned (NUTS 2 level 2) |
Etelä-Suomi (FI1C) and Helsinki-Uusimaa (FI1B) |
|
Date of submission of the application |
19 May 2026 |
|
Date of acknowledgement of receipt of the application |
19 May 2026 |
|
Date of request for additional information |
3 June 2026 |
|
Deadline for provision of the additional information |
25 June 2026 |
|
Deadline for the completion of the assessment |
4 September 2026 |
|
Intervention criterion |
Article 4(2), point (b), of Regulation (EU) 2021/691 |
|
|
4 |
|
Sector(s) of economic activity (NACE Revision 2 division) 3 |
Division 17 (Manufacture of paper and paper products) |
|
Reference period (six months): |
1 October 2025 – 1 April 2026 |
|
Number of displacements during the reference period (a) |
346 |
|
Number of displacements before or after the reference period (b) |
5 |
|
Total number of displacements (a + b) |
351 |
|
Total number of eligible beneficiaries |
351 |
|
Total number of targeted beneficiaries |
351 |
|
Budget for personalised services (EUR) |
1 769 600 |
|
Budget for implementing EGF 4 (EUR) |
68 000 |
|
Total budget (EUR) |
1 837 600 |
|
EGF contribution (60 %) (EUR) |
1 102 560 |
ASSESSMENT OF THE APPLICATION
Procedure
4.Finland submitted application EGF/2026/004 FI/Etelä-Suomi and Helsinki-Uusimaa paper within 12 weeks of the date on which the intervention criteria set out in Article 4 (2), point (b) of Regulation (EU) 2021/691 were met, on 19 May 2026. The Commission acknowledged receipt of the application the same date and requested additional information from Finland on 3 June 2026. Such additional information was provided within 15 working days of the request. The deadline of 50 working days of the receipt of the complete application within which the Commission should finalise its assessment of the application's compliance with the conditions for providing a financial contribution expires on 4 September 2026. The reason why the Commission has exceptionally been unable to comply with the deadline are entirely procedural and linked to the modified decision-making process during summer recess.
Eligibility of the application
Enterprises and beneficiaries concerned
5.The application relates to 346 workers whose activity has ceased in the paper manufacturing sector. The jobs displaced are located in the NUTS 2 regions of Etelä-Suomi (FI1C) and Helsinki-Uusimaa (FI1B).
|
Enterprises and number of displacements within the reference period |
|||
|
Metsä Group Oyj |
57 |
||
|
Stora Enso Oyj |
30 |
||
|
UPM Communication Papers Oy |
166 |
||
|
SAPPI Finland Operations Oy |
93 |
||
|
|
Total no. of displacements: |
346 |
|
Intervention criteria
6.Finland submitted the application under the intervention criteria of Article 4(2), point (b), of Regulation (EU) 2021/691, which requires at least 200 workers to be displaced over a reference period of six months in enterprises operating in the same economic sector defined at NACE Revision 2 division level and located in one region or two contiguous regions defined at NUTS 2 level in a Member State. There were 346 displaced workers in the NUTS 2 regions of Etelä-Suomi (FI1C) and Helsinki-Uusimaa (FI1B) during the reference period.
7.The reference period of six months for the application runs from 1 October 2025 to 1 April 2026.
Calculation of displacements and of cessation of activity
8.Pursuant to Article 6, first paragraph, point (a), in conjunction with Article 5, first paragraph, point c of Regulation (EU) 2021/691, the number of workers affected by job displacement during the reference period has been calculated as follows:
– 253 from the date of the collective redundancies notice
– 93 from the date of the individual notice.
Eligible beneficiaries
9.In addition to the workers already referred to, the eligible beneficiaries include 5 displaced workers whose activity ceased before or after the reference period of six months. These workers ceased their activity either within the six months before the start of the reference period on 1 October 2025 or between the end of the reference period and the day before the adoption of this proposal, pursuant to Article 6, first paragraph, point (b), of Regulation (EU) 2021/691, as required by Article 6, second paragraph, of Regulation (EU) 2021/691. A clear causal link can be established with the event that triggered the cessations of activity of the displaced workers during the reference period as required by Article 6, second paragraph, of Regulation (EU) 2021/691.
10.The total number of eligible beneficiaries is 351.
Description of the events that led to the displacements and cessation of activity
11.The forest industry in South Karelia, a sub-region of Etelä-Suomi located next to the Russian border, has experienced significant geopolitical and economic challenges leading to broad structural changes and substantial staff reductions. As the forest industry is vertically linked to the paper industry, by being its primary supplier of raw material, the same challenges spill-over to the intertwined paper industry.
12.The paper industry itself has been experiencing severe challenges over the past years, mainly due to lower demand as digitalisation is replacing demand for print products 5 . As the industry is energy-intensive, rising energy costs also pose a significant challenge.
13.On top of the general structural challenges the paper industry is facing, the closure of the border with Russia in 2023 had a major impact on the cost structure of paper factories operating in South Karelia. The region had been particularly dependent on cross-border procurement chains, especially on wood imported from Russia. Because of the geopolitical situation following Russia’s war of aggression against Ukraine, wood imports from Russia were sanctioned and imports thus ceased. As wood now had to be sourced from farther away and at a higher price, production costs in the pulp and paper industry rose sharply. Further, rising energy and fuel prices caused further cost pressure.
14.In 2023–2024, demand for printing paper, which had been declining for a long time, continued to weaken. Market conditions also deteriorated in pulp and paperboard products as the European economy slowed down and consumers’ purchasing power weakened. The increased supply of pulp on the world market pushed prices down.
15.The paper companies responded to the situation by initiating so-called change negotiations, which are a statutory obligation in Finland for enterprises planning lay-offs or restructuring. This led to temporary layoffs of up to 90 days in all major paper mills. In autumn 2024, the first major wave of job displacements occurred when 100 jobs were cut at Stora Enso paper mill, in the city of Imatra.
16.The situation escalated in 2025. Import tariffs imposed by the United States not only resulted in a decline in competitiveness but also reshaped global value chains.
17.In 2025, change negotiations in the paper producing companies continued, leading not only to temporary layoffs, but also to major staff reductions. In spring, UPM dismissed 25 employees at its factory in the city of Kaukas. The shutdown of paper production in the summer led to a further 220 dismissals. In autumn, Stora Enso cut 37 jobs and Metsä Group approximately 70 jobs. In total, approximately 350 jobs were lost in the region’s paper industry in a short period.
18.At the end of 2025, the management of the Sappi Kirkniemi mill located in the city of Lohja in Helsinki-Uusimaa Region decided to permanently shut down one of its three paper production machines. In this case, the most important reason for the closure is the long-term decline in paper demand due to digitalisation. The closure of the paper production machine resulted in the permanent reduction of 93 jobs.
Expected impact of the displacements as regards the local, regional or national economy and employment
19.South Karelia is a strongly industry-oriented export region. Manufacturing products account for 99% of the region’s exports (national average 78%) 6 . The shares of the forest industry in regional output, value added, employment, and investments are several times higher than the average of Finnish regions.
20.The services used by the forest industry are mostly contracted locally, which increases the region’s sensitivity to changes in production. The closure of the factory is quickly reflected in subcontracting and service chains: transport, maintenance, logistics, cleaning, security, energy, and engineering services will lose a significant share of their demand. Estimates of multiplier effects per forest industry job range from 1 to 2,5 jobs. Demand for services not directly related to the forest industry also declines due to reduced household purchasing power.
21.According to the national statistics, the region’s unemployment rate, 14,4% in 2025, has long remained above the national average (12,6 %) 7 . This is especially pronounced in Imatra, where the unemployment rate in January 2026 was 16,7%, and continued to rise during the spring.
22.The loss of factory jobs increases the risk of structural and prolonged unemployment. The region’s job supply is limited and centralised, which makes it more difficult for unemployed people to find employment, particularly when workers’ skills do not match employers’ needs. New investments are increasingly focused on higher-skilled tasks, making employment more challenging for those whose background is in manufacturing.
23.In the Lohja region, the permanent reduction of 93 jobs is a challenge for the regional economy. Opportunities for re-employment in the forest and paper industries are limited, so the target group requires reskilling to find a job in a different sector.
24.Given the growing labour market mismatch, workers will require significant tailored support and retraining to successfully transition to new employment. This further increases pressure to speed-up skills development measures.
25.The challenges emphasise the need to modernise the interlinked forest and paper industries, and to accelerate investments in new, especially green industrial sectors.
26.Urgent action is necessary as regional disparity widens. The impacts of the challenges of the paper and forest industries are particularly pronounced in Southeast and Eastern Finland, as job losses weaken economic activity, municipal tax bases, and investment opportunities.
Application of the EU Quality Framework for anticipation of change and restructuring (QFR)
27.Finland has described how the recommendations set out in the EU Quality Framework for anticipation of change and restructuring have been taken into account. EGF support is designed to be consistent with the EU Quality Framework by reinforcing early intervention, active labour market measures and coordinated support packages. The monitoring committee for the programme, consisting of representatives of ministries, regions and social partners, oversees implementation, effectiveness, and alignment with strategic objectives, ensuring that EU funds and national resources are used in a complementary and coordinated manner.
28.Regarding the activities undertaken to assist the displaced workers, Finland has reported that the public employment services in South Karelia and in Lohja have organised information sessions, and initiated personalised services for the targeted workers right after the redundancies were notified in autumn 2025. These include assessment of the individual needs, job-search support and guidance on the various services available for the jobseekers.
Complementarity with actions funded by national or Union funds
29.Finland has confirmed that the measures described below receiving a financial contribution from the EGF will not also receive financial contributions from other Union financial instruments.
30.The coordinated package of personalised services complements actions funded by other national or EU funds.
Procedures for consulting the targeted beneficiaries or their representatives or the social partners as well as local and regional authorities
31.Finland has indicated that the co-ordinated package of personalised services has been drawn up in consultation with experts and social partners, in compliance with Article 7(4) of Regulation (EU) 2021/691. The EGF support has been discussed in the regional sudden structural change implementation monitoring group, involving regional stakeholders and the Ministry of Economic Affairs and Employment, since November 2025. The final package of measures was discussed and agreed in a meeting with the public employment services and employees’ and employers’ representatives from the affected enterprises on 27 March 2026.
Targeted beneficiaries and proposed measures
Targeted beneficiaries
32.All 351 displaced workers are expected to participate in the measures. Pursuant to Article 8(7), point (f), of Regulation (EU) 2021/691, the provided breakdown of these workers by gender, age group and educational level is as follows:
|
Category |
Number of
|
||
|
Gender: |
Men: |
303 |
(86,3 %) |
|
Women: |
48 |
(13,7 %) |
|
|
Non-binary |
0 |
(0,0 %) |
|
|
Age group: |
Below 30 years: |
58 |
(16,5 %) |
|
30-54 years: |
127 |
(36,2 %) |
|
|
Over 54 years: |
166 |
(47,3 %) |
|
|
Educational level |
Lower secondary education or less 8 |
27 |
(7,7 %) |
|
294 |
(83,8 %) |
||
|
Tertiary education 11 |
30 |
(8,5 %) |
|
Proposed measures
33.Pursuant to Article 8(7), point (h) of Regulation (EU) 2021/691, the personalised coordinated package to be provided to displaced workers consists of the following measures:
–Job search training and career coaching: The participants receive information about the support services available for jobseekers, and training to strengthen their pathway into the labour market. Their skills will be assessed by experts, with particular focus on digital skills. Job search activities and job coaching measures will be provided to identify new employment opportunities. The service is provided by both PES and external experts, and includes individual and group based activities.
–Vocational training: The training is either group-based or individual, based on the needs of the participant and the regional labour market. Each participant is provided with a personal competence development plan, so that the training can be tailored according to existing skills-sets and individual goals. It is also possible to obtain various certificates and licenses, such as the occupational safety card, hot work card, etc.
–Start-up grant: The grant is intended for start-up and early-stage development costs to support workers who start a business or a self-employed activity. It is paid based on the actual costs incurred and cannot be allocated to salary expenses or personal livelihood of the individual. This measure is applied only in South Karelia.
–Survey and AI solution for recruitment and skills needs: The South Karelia Employment Area will carry out an AI-based pilot to identify recruitment needs and skills demands in the regional labour market, enabling the matching of the target group with these needs, and finding skills gaps that can be addressed through training.
–Pay subsidy: Pay subsidies lower the recruitment threshold by reducing the new employer’s payroll costs. The aim is to help the jobseekers find employment in the open labour market and to improve their professional skills. The amount of pay subsidy is generally 50 % of the payroll costs; the length of the subsidised period depends on the employment contract and the duration of the preceding unemployment period.
–Mobility allowance: The allowance is intended to encourage taking-up work further away from home, by compensating for commuting and moving expenses.
–Allowance towards business creation: To secure the livelihood of the workers during setting up business, a daily allowance of EUR 37,21, paid five days a week, will be granted for a maximum of 12 months. This measure is applied only in Lohja.
34.A range of ICT training and additional support, based on an initial assessment of the digital skills level of the beneficiaries, and paying attention to the accessibility of the services, caters for the dissemination of the skills required in the digital industrial age and in a resource-efficient economy, as required by Article 7(2) of Regulation (EU) 2021/691.
35.The proposed actions, here described, constitute active labour market policy measures within the eligible actions set out in Article 7 of Regulation (EU) 2021/691. These actions do not substitute passive social protection measures.
36.Finland has provided the required information on measures that are mandatory for the enterprise concerned by virtue of national law or pursuant to collective agreements. In accordance with Article 9(1) of Regulation (EU) 2021/691, Finland has confirmed that a financial contribution from the EGF will not replace such measures.
Estimated budget
37.The estimated total costs are EUR 1 837 600, comprising expenditure for personalised services of EUR 1 769 600 and expenditure for preparatory, management, information and publicity, control and reporting activities of EUR 68 000.
38.The total financial contribution requested from the EGF is EUR 1 102 560 (60 % of total costs).
39.Pursuant to Article 8(7), point (m), of Regulation (EU) 2021/691, Finland has specified that the national pre-financing and co-funding is provided by South Karelia and Lohja-Karkkila Employment Areas.
|
Measures |
Estimated number of participants |
Estimated cost per participant
|
Estimated total costs (EUR) 13 |
|
Personalised services (measures under Article 7(2), second subparagraph, point (a), of Regulation (EU) 2021/691) |
|||
|
Job search training and career coaching |
351 |
1 231 |
432 040 |
|
Vocational training |
101 |
4733 |
478 000 |
|
Start-up grant
|
17 |
12 353 |
210 000 |
|
Survey and AI solution for recruitment and skills needs |
258 |
233 |
60 000 |
|
Sub-total (a): Percentage of the package of personalised services |
– |
1 180 040 |
|
|
(66,68 %) |
|||
|
Allowances and incentives (measures under Article 7(2), second subparagraph, point (b), of Regulation (EU) 2021/691) |
|||
|
Pay subsidy |
59 |
9 518 |
561 560 |
|
Mobility allowance |
20 |
150 |
3 000 |
|
Allowance towards business creation |
5 |
5 000 |
25 000 |
|
Sub-total (b): Percentage of the package of personalised services: |
– |
589 560 |
|
|
(33,32 %) |
|||
|
Activities under Article 7(5) of Regulation (EU) 2021/691 |
|||
|
1. Preparatory activities |
– |
0 14 |
|
|
2. Management |
– |
47 500 |
|
|
3. Information and publicity |
– |
11 500 |
|
|
4. Control and reporting |
– |
9 000 |
|
|
Sub-total (c): Percentage of the total costs : |
– |
68 000 |
|
|
(3,70 %) |
|||
|
Total costs (a + b + c): |
– |
1 837 600 |
|
|
EGF contribution (60 % of total costs) |
– |
1 102 560 |
|
40.The costs of the measures identified in the table above as measures under Article 7(2), second subparagraph, point (b), of Regulation (EU) 2021/691 do not exceed 35 % of the total costs for the coordinated package of personalised services. Finland confirmed that these measures are conditional on the active participation of the targeted beneficiaries in job-search or training activities.
Period of eligibility of expenditure
41.Finland started providing the personalised services to the targeted beneficiaries on 1 January 2026. The expenditure on the measures will therefore be eligible for a financial contribution from the EGF from 1 January 2026 until 24 months after the date of the entry into force of the Financing Decision.
42.Finland started incurring the administrative expenditure to implement the EGF on 1 January 2026. The expenditure for preparatory, management, information and publicity, control and reporting activities shall therefore be eligible for a financial contribution from the EGF from 1 January 2026 until 31 months after the date of the entry into force of the Financing Decision.
Management and control systems
43.The application contains a description of the management and control system required under Article 23 of Regulation (EU) 2021/691, which specifies the responsibilities of the bodies involved. Finland has notified the Commission that the financial contribution will be managed and controlled by the Ministry of Economic Affairs and Employment, by the same units who act as managing and certifying authority for ESF+ in Finland. The independent Internal audit under the authority of the Permanent Secretary of the Ministry of Economic Affairs and Employment acts as the audit authority for the EGF.
Commitments provided by the Member State concerned
44.Finland has provided all necessary assurances regarding the following:
–the principles of equality of treatment and non-discrimination will be respected in access to the proposed measures and their implementation,
–the requirements laid down in national and EU legislation concerning collective redundancies have been complied with,
–the dismissing enterprises, which have continued their activities after the lay-offs, have complied with their legal obligations and provided for their workers accordingly,
–any double financing will be prevented,
–the financial contribution from the EGF will comply with the procedural and material Union rules on State aid.
BUDGETARY IMPLICATION
Budgetary proposal
45.The EGF shall not exceed a maximum annual amount of EUR 30 million (in 2018 prices), as laid down in Article 8 of Council Regulation (EU, Euratom) 2020/2093 of 17 December 2020 laying down the multiannual financial framework for the years 2021 to 2027 15 .
46.Having examined the application in respect of the conditions set out in Article 13(1) and (2) of Regulation (EU) 2021/691, and having taken into account the number of targeted beneficiaries, the proposed measures and the estimated costs, the Commission proposes to mobilise the EGF for the amount of EUR 1 102 560, representing 60 % of the total costs of the proposed measures, in order to provide a financial contribution for the application.
47.The proposed decision to mobilise the EGF will be taken jointly by the European Parliament and the Council pursuant to Article 15(1), first subparagraph, second sentence, of Regulation (EU) 2021/691 and, as laid down in point 9 of the Interinstitutional Agreement of 16 December 2020 between the European Parliament, the Council of the European Union and the European Commission on budgetary discipline, on cooperation in budgetary matters and on sound financial management, as well as on new own resources, including a roadmap towards the introduction of new own resources 16 .
Related acts
48.At the same time as it presents this proposal for a decision to mobilise the EGF, the Commission will present to the European Parliament and to the Council a proposal to transfer to the relevant budgetary line the amount of EUR 1 102 560.
49.At the same time as it adopted this proposal for a decision to mobilise the EGF, the Commission adopted a decision on a financial contribution that constitutes a financing decision within the meaning of Article 110 of Regulation (EU, Euratom) 2024/2509 17 . That financing decision will enter into force on the date on which the Commission is notified of the approval of the budgetary transfer by the European Parliament and the Council pursuant to Article 15(2), first subparagraph, of Regulation (EU) 2021/691.
2026/0254 (BUD)
Proposal for a
DECISION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL
on the mobilisation of the European Globalisation Adjustment Fund for Displaced Workers following an application from Finland – EGF/2026/004 FI/Etelä-Suomi and Helsinki-Uusimaa paper
THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty on the Functioning of the European Union,
Having regard to Regulation (EU) 2021/691 of the European Parliament and of the Council of 28 April 2021 on the European Globalisation Adjustment Fund for Displaced Workers (EGF) and repealing Regulation (EU) No 1309/2013 18 , and in particular Article 15(1), first subparagraph, thereof,
Having regard to the Interinstitutional Agreement of 16 December 2020 between the European Parliament, the Council of the European Union and the European Commission on budgetary discipline, on cooperation in budgetary matters and on sound financial management, as well as on new own resources, including a roadmap towards the introduction of new own resources 19 , and in particular point 9 thereof,
Having regard to the proposal from the European Commission,
Whereas:
(1)The European Globalisation Adjustment Fund for Displaced Workers (EGF) aims to demonstrate solidarity and promote decent and sustainable employment in the Union by providing support for workers made redundant and self-employed persons whose activity has ceased in the case of major restructuring events and assisting them in returning to decent and sustainable employment as soon as possible.
(2)The EGF is not to exceed a maximum annual amount of EUR 30 million (in 2018 prices), as laid down in Article 8 of Council Regulation (EU, Euratom) 2020/2093 20 , and Article 16 of Regulation (EU) 2021/691.
(3)On 19 May 2026, Finland submitted an application to mobilise the EGF in accordance with Article 8(1) of Regulation (EU) 2021/691, in respect of workers’ displacements in the economic sector classified under the Statistical classification of economic activities in the European Community ('NACE') 21 Revision 2 Division 17 (Manufacture of paper and paper products) in the Nomenclature of Territorial Units for Statistics ('NUTS') 22 level 2 regions of Etelä-Suomi (FI1C) and Helsinki-Uusimaa (FI1B) in Finland. It was supplemented by additional information provided in accordance with Article 8(5) of Regulation (EU) 2021/691. That application is considered to comply with the conditions for providing a financial contribution from the EGF as laid down in Article 13 of Regulation (EU) 2021/691, on the basis of the assessment made by the Commission in the Proposal for a mobilisation decision of the European Parliament and of the Council 23 .
(4)The EGF should, therefore, be mobilised in order to provide a financial contribution of EUR 1 102 560 in respect of the application submitted by Finland.
(5)In order to minimise the time taken to mobilise the EGF, this Decision should apply from the date of its adoption,
HAVE ADOPTED THIS DECISION:
Article 1
For the general budget of the Union for the financial year 2026, the European Globalisation Adjustment Fund for Displaced Workers shall be mobilised to provide the amount of EUR 1 102 560 in commitment and payment appropriations.
Article 2
This Decision shall enter into force on the day of its publication in the Official Journal of the European Union. It shall apply from [the date of its adoption] 24* .
Done at Brussels,
For the European Parliament For the Council
The President
The President