Merger grants

The Government is trying to speed up the process of mergers between municipalities by granting special assistance to municipalities involved in them. The grants are paid to the municipalities involved that still exist after the merger, and depend on the number of their residents. As mergers also increase the size of the surviving municipalities, there will be changes in the central government transfers to them. Thus, the amount of merger assistance paid to them depends on the amount of central government transfers they are entitled to after the territorial changes.

The new amendments to the Act on Local Authority Boundaries which came into force in February 2007 revised the merger grant system completely. The new system is aimed at reducing the number of municipalities in Finland and making the municipal structure economically and functionally more viable. The merger grants depend on the total population of the resulting municipality, the population of the municipalities involved (excluding the most populous one) and the number of municipalities involved. For municipalities in a particularly difficult financial situation, a higher merger grant is paid in connection with municipal mergers carried out at the start of 2008 and 2009. The merger grant is be payable for three years.

A chart of the new merger grants in 2008-2013

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