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International Internet Magazine. Baltic States news & analytics Saturday, 16.01.2021, 13:53

Estonian ministry: Economic effects of Covid-crisis to intensify in fall

BC, Tallinn, 07.05.2020.Print version
According to the Estonian Ministry of Social Affairs, the economic effects of the coronavirus crisis in the social field will intensify in the fall, but the crisis caused by the emergency situation is already affecting the labor market and unemployment has increased, informs LETA/BNS.

The ministry believes that the impact on the social sector is not expected until the fall. As of May 6, there were 49,395 registered unemployed in Estonia, the registered unemployment rate was 7.6 percent and, compared to the start of the emergency situation, the number of registered unemployed has increased 35 percent.

"According to the crisis indicators of the social field, the number of recipients of subsistence benefits has not increased significantly during the emergency situation, and due to low utility costs, the number of beneficiaries is expected to slow down in the summer months as well," Rait Kuuse, deputy secretary general for social policy at the Ministry of Social Affairs, said.

"According to forecasts, the economic effects of the crisis will reach the social field with a delay, at the same time, we can see that people's calls to crisis helplines have already increased," he added. Kuuse said that local authorities have made great efforts to deal with the crisis and help people. "It is clear that the crisis will not end at the end of the emergency situation and the burden on social workers will remain high for a long time to come," he added.

At a meeting between local governments and the Ministry of Social Affairs on Thursday, the Ministry of Finance introduced the conditions of the support package allocated to local governments from the supplementary budget of 2020. A total of 130 million euros has been allocated to local governments from the support fund, of which 30 million euros is intended to stabilize the negative effects of the crisis. The crisis package can be used to make extraordinary social protection expenditures. For example, the money is intended to cover additional costs due to the emergency situation, including disinfectants, protective masks or food packages for the elderly, and to compensate for the reduction in own income, as well as kindergarten fees and local taxes.

"Rising unemployment reduces the revenue base of local governments and puts pressure on local governments' social protection budgets. Consequently, it is important to ensure the revenue base of local governments by the state and well-thought-out and flexible measures of crisis assistance packages for local governments," Jan Trei, deputy director of the Association of Estonian Cities and Municipalities, said. "We will keep a close eye on local government revenue base inflow trends and, if necessary, present proposals for social protection expenditure needs in the 2021 state budget negotiation process so that local governments are guaranteed the 2019 revenue base level for local governments to be able to fulfill their specific functions under legislation and provide various public services, including social services, to the population," Trei added.

The crisis has encouraged local authorities to work closely together in the social field and to find different and innovative solutions for communication and helping people. The feeling of confidence at the moment is compounded by the fact that, despite the difficult situation, social workers have maintained a happy disposition and a conviction that the work can be done. The problems caused by the emergency situation and the COVID-19 virus were seen as challenges that have helped to resolve some of the things that have been delayed for a while.

Local governments, the Ministry of Social Affairs and the Association of Estonian Cities and Municipalities on Thursday held a video meeting to discuss the crisis exit plan in the provision of social protection services. The state gave local governments an overview of crisis indicators in the field of labor and social affairs, as well as support measures to alleviate the crisis. The local governments of southeastern Estonia provided an overview of social activities in connection with the spread of COVID-19.

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