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Estonia supports EU plan for restarting of economy

BC, Tallinn, 11.06.2020.Print version
The government at its Cabinet sitting on June 11th endorsed the positions of Estonia concerning the plan for restarting Europe and for the negotiations on the budget of the European Union for 2021-2027, reports LETA/BNS.

The government said that Estonia is prepared to take part in the implementation of once-only  measures that are limited in time.  

Prime Minister Juri Ratas said that the objective of the restarting plan is to help member states bring the European economy out of the crisis as quickly as possible, doing it in a manner which increases investments in the green turnaround and digital turnaround and underpins Europe's resilience to crises.

"European Union member states must react resolutely and fast in order for the impact of the crisis on the economy, and through it also people's wellbeing to be as small as possible and recovery from it to be fast," Ratas said in a press release.

The prime minister said that the Estonian economy is so tightly connected with the other member states that people's wellbeing depends on how well both sides are doing.

"In order for us to be doing well, also Europe must be doing well. The most important markets for Estonian business operators are located here in Europe. Hence the measures to enliven the economy in Europe both directly and indirectly constitute an important support for Estonian business operators and employees," the prime minister said.

According to the Estonian government, the investments made to enliven the economy must be directed to the future and help implement the digital transition of the EU, sustainable investments for achieving the climate goals, and strengthen the single market.

For that the government is prepared to consider the taking of a one-off, extraordinary, temporary loan clearly limited in time to finance the restarting plan via the budget of the EU.

The Estonian government does not support covering current costs from the restarting plan. The government also is of the opinion that member states should not guarantee one another's obligations before the EU budget. The distribution of the repayments of the loan in the future must be transparent and predictable for the member states. The government prefers a payback scheme via a gross national income based pay-in.

The government is not in favor of new European sources of income, meaning own funds, for the financing of the EU budget and the restarting facility and prefers financing to be continued as to date, via payments based mainly on the wealth of individual states.

Consensus among member states must be maintained in making decisions about tax issues. Also, the budgetary burden of countries with a lower-than-average standard of living should not rise more than that of the wealthier states. 

It is also important for Estonia for the EU to have a budget from the new year. When it comes to the budget plan for 2021-2027, the government considers supporting member states with additional Cohesion Policy financing as important, which will help to support employment, businesses and the healthcare system fast and under flexible conditions if possible.

It is also important according to the government of Estonia to increase financing for businesses and the support of the rural development fund for rural areas and the agricultural sector for exiting the crisis.

Harmonizing the direct support in agriculture continues to be important for Estonia. The urgent activities necessary for restarting the economy should be started already this year, with additional funding in the current 2014-2020 budgetary period. The Estonian government is of the opinion that the plan for restarting Europe must be endorsed based on the principle of consensus. Also legal certainty that the plan for restarting Europe is consistent with the EU treaties is important.  

The government wants the decision on financing the plan for restarting Europe to be adopted  in Estonia by the plenary of the Riigikogu. The government believes that the plan for restarting the economy must mitigate the economic crisis. According to the European Commission, the EU economy is set to contract from 7-16 percent in 2020, while according to the European Central Bank the contraction in the euro area is about to be 5-12 percent. The estimate by the International Monetary Fund is a contraction of 7.1 percent for the EU and 7.5 percent for the euro area. The Commission's estimate on Estonia for 2020 is an economic decline of 6.9 percent.

EU heads of state and heads of government are set to discuss the plan for restarting the economy and the EU's next long-term budget for the period 2021-2027 at a video conference on Friday, June 19. Both need to be approved by consensus, and approval is required also from the European Parliament. Member states are hoping to reach an agreement by the end of July.

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