Rõivas: Extensive borrowing not possible in 2017

Taavi Rõivas before the no confidence vote in the Riigikogu, Nov. 9, 2016. (Siim Lõvi/ ERR)
11/16/2016 4:23 PM
Source: BNS, ERR
Category: News

It wouldn’t be possible for the new coalition to push the 2017 state budget into deficit, and if it wished to resort to borrowing, it could do so only in the year after next, outgoing Prime Minister Taavi Rõivas said on Wednesday.

Since the budget for 2017 had reached parliament and the Riigikogu was forbidden by law from undermining the balance of the budget, it would not be possible to borrow money in significant amounts next year, the prime minister told lawmakers in the Riigikogu on Wednesday.

It would be possible to borrow extensively in 2018, yet this would require changing the State Budget Act, which calls for a structural balance of the budget, Rõivas added.

He also pointed out that European Union rules did not allow budgeting a very large deficit, and even though some countries were doing it, this was not well regarded.

Center Party policymaker Kadri Simson told Eesti Päevaleht in an interview published on Monday that the government coalition to be established by Center, Pro Patria and Res Publica Union (IRL), and the Social Democratic Party could borrow up to €100m or about 0.5 percent of GDP.

Rõivas’ reminder comes after representatives of the negotiating parties said as early as last week that no major policy shifts were to be expected before 2017. According to comments made by the three parties in the likely new coalition up to this point, the most drastic change to the budget would be to drop the 0.5% social tax cut included in it by the outgoing Reform Party government.

The Estonian parliament expressed no confidence in Prime Minister Taavi Roivas last Wednesday. The motion initiated by the opposition Center Party, Free Party and Conservative People's Party (EKRE) was backed by 63 MPs, while 28 voted against it and there were no abstentions.

Editor: Dario Cavegn

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