European Commission Recommends Strict Budget Discipline for Estonia (2)
The European Commission (EC) recommends a strict budget strategy for Estonia and called on dealing with the 0.3 percent budget gap.
The EC assessment also does not rule out the possibility that Estonia cannot meet its budget targets. However, according to the Ministry of Finance, the Bank of Estonia, the International Monetary Fund and the Organization for Economic Co-operation and Development, the GDP of Estonia has not met its full potential yet, ETV reported on Monday.
According to the EC’s forecast, the structural deficit will deteriorate by 0.1 percent of the GDP this year, leading to a 0.3% of GDP gap compared to the required adjustment and a significant deviation when assessed over two years.
The Estonian Ministry of Finance, Jürgen Ligi, says that there are enough finances to meet the targets.
Ligi said the assessments by the ministry and the EC are similar, but the Commission’s assessment does not take into account the budgetary strategy approved recently.
The Commission also recommended improving energy sufficiency, fulfilling the potential of the transport sector, and ensuring stimuli for low-paid workers also stressing the necessity of a labor reform.
ERR’s Brussels correspondend Johannes Tralla told ETV on Mondany evening that in general, the EC is pleased with Estonia when it comes to meeting budget targets, while long time employment does have to be dealt with. According to Tralla, the budget issue is technical and not comparable to the budget deficits of countries like France that struggles to bring its budget deficit down to the required 3 percent of GDP.
The EC recommendations are available here.