Now the focus shifts towards the Northern European countries that undoubtedly want to allocate the bulk of their Recovery and Resilience Facility resources to the green transition. In this article we aim to review the Plans of these Scandinavian countries by analyzing how they have chosen to invest.
The green transition
Denmark and Sweden are expected to receive approximately €1.6 and €3.2 billion respectively in grants for their Recovery and Resilience Plans. Early on both countries shared their willingness to invest these resources in supporting and accelerating the green transition.
Denmark is going to supplement the allocation with almost the same amount of national funds and, overall, 60% of the resources are planned to be directed towards green initiatives exceeding the EU’s criteria of committing at least 37% of the allocation to this objective. Likewise, 40% of the foreseen costs in the Swedish plan refers to measures linked to the climate transition and 20% to the digital transition (as imposed by the Commission).
The Danish Plan: sustainability, digitalization and green R&D
Principally, the Danish Plan consists of thirty-nine measures and is structured into six reforms and thirty-three investments in seven main fields: resilience of the Health Care System, Energy Efficiency, Green Tax Reform, Sustainable Road Transport, Digitalisation, and Green R&D.
If the emphasis put on the sustainability field is apparent, then the last two components are relevant for the purpose of our investigation. As a matter of fact, investments in Digitalisation seek to promote a cross-cutting transformation of various sectors ranging from the modernization of welfare services to equality, as well as further securing new employment opportunities concerning the green transition.
In this respect, the plan builds on a close dialogue with the civil society, businesses and the whole industry sector and envisages the establishment of fruitful partnerships. Concerning the Green R&D expenditure, since the country plays a leading role in this field, the plan ensures to maintain this position and also create new jobs in the green sector. Indeed, financial incentives will be provided to companies to increase their expenditure in R&D.
The Swedish Plan: a more sustainable & digital future
Sweden’s Recovery Plan, instead, contains thirty fundamental reforms and five main sectors in which investments will be channeled: Green recovery, Education and transitions, Expansion of broadband and digitalization of the public administration and research, Demographic challenges and integrity of the financial system, and lastly, Growth and housing construction investments. Even this Member State pictures a more environmentally friendly and digital future.
Young people and education
Young people in Denmark and Sweden benefit from an already well-performing education system
and share a similar downside constituted by the educational outcomes of pupils with a migrant background.
Both countries, however, have continuously invested in new policies targeted at education and skills, dedicating increased funding to these areas. Despite the fact that the overall educational outcomes in Denmark are generally above the EU average, the plan seeks to invest in ICT infrastructure in aims of enhancing the digital skills of both pupils and teachers.
Expectations: deep structural changes
Even though the Commission’s assessment is currently only available for the Danish Plan, the implementation of the planned reforms and investments are expected to bring about deep structural changes in the economies of both these Scandinavian countries.
They are responding to the pandemic’s effects through extensive measures which are going to be taken by their governments. For instance, the Danish Government has enacted an unprecedented expansive fiscal policy response in 2020 which has minimized the drop in the employment rates while the Swedish one has amended the central government budget for 2020-2021 accounting for the pandemic.
References:
https://en.fm.dk/publications/2021/april/denmarks-recovery-and-resilience-plan/
https://www.government.se/articles/2020/12/eu-recovery-and-resilience-facility-rrf/