Prime Minister Concedes Tax Break Amid Strikes
Amidst a week of union strikes, the prime minister has signaled a concession - proposing to lower the unemployment insurance premium to 3 percent next year.
Prime Minister Andrus Ansip made the proposal for the tax break at a Cabinet meeting on Monday, reported Eesti Päevaleht.
Currently, the unemployment insurance premium is 4.2 percent of the gross salary - 1.4 percent from the employer and 2.8 percent from the employee.
The new proposed cut is four times higher than what the government has previously put forward. The Finance Ministry's most recent economic forecast said the premium could be lowered by just 0.3 percent in 2013.
The concession comes after Ansip - internationally applauded for his fiscal responsibility policies - said at a Cabinet press conference that the government had "lacked empathy" and concern for the individual. "It must be admitted that neither the government nor I have been able to explain things to the people sufficiently, there has been too little empathy [...] I have considered my duty to the republic supreme, but apparently underestimated another very important feeling - empathy toward every person who is in need," he said.
This week, Estonia faces the largest series of strikes in its postwar history.
A refusal to lower the unemployment insurance premium was one of the reasons that both the Trade Union Confederation and the Employers' Confederation left the board of the Unemployment Insurance Fund in protest late last year - a move that froze the board's activities and forced the government to recreate legislation governing the agency to give itself more emergency power.
Ott Tammik