The European Central Bank is embarking on a so-called money printing plan and the Bank of Estonia must buy around three billion euros worth of bonds. As Estonia has not issued state bonds, we will have to purchase bonds of other nations and European institution, and perhaps a small quantity of debt from Estonian state-owned companies.
I agree with the current stance of Estonian leaders, who say loans are other people's money, and we should keep away from them if possible. This opinion, based on hardheaded common sense, does not seem to be very popular in Europe. We are obliged to purchase the bonds. If the Bank of Estonia buys bonds of other nations and if those nations go bankrupt, then that automatically becomes our problem.
Maybe we should soften the ideological standpoint due to the special circumstances and issue some bonds ourselves?
No one will stop us dreaming.
The bonds will help to make essential investments. For example, Estonia will need to find 500 million euros for its part in the high-speed railway Rail Baltic. That figure must be borrowed in any case and why not in the form of a bond issue – especially as the money is forced on us?
Besides Rail Baltic, the already existing railroads are also very important for Estonia. The new and cool trains that have been taking to the tracks have persuaded an inceasing number of people to enjoy the comfort and speed, not to mention the smaller environmental impact, of train travel. But these snazzy new trains are unable to reach full speed as not all Russian-era train tracks have yet been completely renovated.
The current transport development plans sees 436 million euros spent on building a comfortable and modern public transport network. That includes renovating the entire “old” tracks system so as to allow trains to travel at 120 kilometers per hour and even reach up to 140 on straight stretches. The figure also involves various investments into regional and local public transport, connecting every county center with Tallinn in the maximum of three hours. Even the train connections to Haapsalu could be restored with that money.
So 500 million euros for Rail Baltic and roughly the same for old railroads – we have found use for a whole billion. With that money we will become a nation with a first-rate railway network.
But we've still got two billion left. The economy and infrastructure minister, Urve Palo, said in front of the Parliament in June that we should consider speeding up the construction of the Tallinn-Tartu highway and complete its Tallinn-Paide section by 2020. She put the cost at 200 million euros, of which 70 million could come from the European Union funds.
Rebuilding the entire Tallinn-Tartu road to four lanes would cost over 500 million euros. But if the Tallinn-Narva road would also be turned into a four-lane highway, that would add up to a billion euros.
Postimees chief Mart Luik said in his paper that the reconstructed roads could be a gift to Estonia for its 100th birthday. “Some construction workers would return from Finland making their families happy,” Luik said. “We can find more positives, but the biggest argument is road safety. Fifteen to 20 people die each year on both those roads and most of the accidents would not happen on a fully-built-out highway.”
We have successfully used up two billion, with which we can finally upgrade Estonia's main transport arteries.
But what to do with the last billion? The Saaremaa bridge would probably cost less than half a billion euros. Besides that we can build a modern state secondary school in each county – rough cost between 3-5 million euros.
Over half a billion is still left. To protect all the above assets we could buy modern air-defense systems, which would protect our people during difficult times, and also our land forces from enemy air attacks.
Three billion euros. Plenty of food for thought.
Alo Lõhmus is a journalist. The original piece appeared in Estonian on ERR radio.
Editor: J.M. Laats, M. Oll