Finance Minister Presents Revised EFSF
Today, Finance Minister Jürgen Ligi will present the Cabinet with the revised draft of the European Financial Stability Facility (EFSF) agreement and draft legislation stating Estonia's membership obligations.
The EFSF was created in 2010, but revised this past July 21 amid financial collapse in Ireland, Portugal and Greece, as well as possible collapse in Spain and Italy. The agreement among Eurozone member states promises loans and outlines economic policy conditions for fellow members in economic trouble.
Estonia's signing on to the revised agreement hinges on a parliamentary vote this month. If passed, Estonia would join the Fund in October.
In less wealthy Eurozone states like Estonia and Slovakia, the notion of bailing out overspending members like Greece is distasteful for some politicians who say that the emphasis should fall on tougher economic conditions, not more bail-out money.
Recent amendments to the Facility's framework agreement propose a lending capacity of 440 billion euros, and expand the possibilities for intervention in cases of instability.
Membership in the Facility obligates Estonia to make a capital contribution of 48,000 euros, which makes up 0.26 percent of the stock capital, and also guarantee the Facility's debt obligations to a maximum amount of 1.9 billion euros.
Andres Kahar