European Commission to decrease amount of structural funds to Estonia

Interchange at the crossing point of Tallinn-Tartu and Pärnu-Rakvere Highways in Mäo, one of many projects in Estonia paid for with EU structural funds. (Liis Treimann/Postimees/Scanpix)
12/1/2016 9:43 AM
Category: News

Following a midterm review of the current budget period, the European Commission has decided to decrease the amount of funds earmarked for Estonia by 35.4 million euros as Estonia’s economy has improved better than expected and more slowly developing regions are in greater need of the support.

Regulations on the EU’s 2014-2020 period provide for the Commission’s review this year of 2012 projections as well as real terms for member states’ gross domestic product (GDP), gross national product (GNP) and employment indicators from 2012-2014.

If these figures indicate that a member state has performed better than projected, the total volume of their structural funds (European Social Fund, European Regional Development Fund, Cohesion Fund) will be decreased. As this proved to be the case for Estonia, the country’s total funding for the 2014-2020 period was reduced by 35.4 million euros.

"The idea behind the EU funds is to help less well-off countries catch up to wealthier ones," explained Ministry of Finance spokesperson Ott Heinapuu. "Our goal should be to become wealthy enough that the EU would no longer support us. This difference is also monitored on an ongoing basis and statistics show that Estonia has generally gotten wealthier and the gap between us and the European average has shrunk. This means that our total funding for the 2014-2020 period will be decreased by 35.4 million euros, which is approximately one percent of the total subsidies."

The money freed up in the process of reducing the funding for countries whose economies have grown faster than projected will be redirected to other regions. As a small country, Estonia makes up one whole region, however larger countries may include multiple regions.

"Money is currently being relocated mainly to the EU’s southern countries, as their economies have grown more slowly than projected," noted Heinapuu.

The total amount of structural funds designated for Estonia for the 2014-2020 period, together with co-financing, comes in at approximately 3.5 billion euros, 44 percent of which has been taken on in obligations by now.

At the expense of which the cuts will come has yet to be decided, however. "The [state] government will make a decision regarding changes arising from the adjustment," Heinapuu said. "The government has not yet made this decision."

Just two months prior, the Estonian Ministry of Finance claimed that the amount of subsidies Estonia was to receive would not be reduced.

Editor: Aili Vahtla

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