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Prime Minister Juri Ratas said that the state must support the economy in the difficult time.

"The least we can do is make sure that after the crisis, a critical resource is left for as rapid as possible a recovery of economic activity," the premier said according to spokespeople.

The Cabinet also approved a proposal of Minister of Foreign Trade and IT Raul Siem to raise the ceiling on the compensation of crisis damage under the emergency measure of Kredex from 30 percent to 50% in the underwriting of new loans issued by banks. 

"Although the economic decline after the beginning of the crisis has proved smaller than estimated, the new outbreak of coronavirus is pushing the recovery of the economy to a more distant future, due to which the need for businesses to survive the crisis with the support of the state continues," Siem said, adding that for this reason, he made a proposal to the government to carry over the funds given to Kredex under the supplementary budget this year, which have not been used, to the next year. 

In order to direct businesses to invest more, the budgetary breakdown of direct loans by Kredex is to be lifted and the budgets of operating capital loans and investment loans brought together.

In spring, 500 million euros was earmarked for operating capital loans and 50 million euros for investment loans under the measure.

"As the crisis has evolved, we must also increase flexibility, and we decided to lift these limitations in the budget of direct loans by Kredex," Siem said. The minister said that letting businesses' new business ideas materialize as quickly as possible will give businesses a better starting position in growing competition.

Also the loan underwriting, operating capital and investment loan measures and the agricultural land financial lease measure of the Rural Development Foundation will continue in 2021.

"Existing crisis measures of the Rural Development Foundation have been of great help for business operators, but the crisis is far from being about to end and business operators have a lot of uncertainty about the future," Minister of Rural Affairs Arvo Aller said.

Interest in the measures of the Rural Development Foundation has been very high, with decisions on lending with regard to 79 million euros, decisions on underwriting with regard to 29 million euros and decisions on financial lease with regard to 2.6 million euros passed by the beginning of December. 

The government gave its nod in principle also to enabling the use next year of the five million euros allocated from the government's reserve on Nov. 10 for supporting the tourism sector. To be added to that amount is three million euros as untapped amount of rent support for trade and service enterprises of Enterprise Estonia (EAS). 

Siem said that the purpose of the crisis support meant for the tourism sector is to support the accommodation providers hit hardest by the crisis, food service companies in the Old City of Tallinn, travel companies and handicraft shops all over Estonia.

"With the new amount of crisis support we will support business operators whose business is most dependent on foreign tourists and who are necessary service providers when international tourism recovers," Siem said. EAS will be able to open the measures in 2021.

The substance and terms and conditions of all the crisis measures will be decided about shortly.