Government reaches agreement ahead of EU budget talks starting Thursday

Stenbock House, seat of the Estonian government, in Tallinn.
Stenbock House, seat of the Estonian government, in Tallinn. Source: Siim Lõvi /ERR

Estonia sees greater contribution to achieving the goals of the EU's cohesion policy, the Common Agricultural Policy (CAP) and infrastructure projects like Rail Baltic and electricity grid synchronization as key areas in European Union negotiations for the 2021-2027 period, soon to commence.

Prime Minister Jüri Ratas (Center) is set to represent Estonia at an extraordinary meeting of the Council of the European Union in Brussels from February 20, the government's communication office said Tuesday.

"It continues to be in Estonia's interests to support the necessary, meaning the biggest possible size of the budget for attaining the EU's common goals," Ratas said via a government press release, following a cabinet meeting Tuesday.

"It is in our interests that there be greater flexibility in the use of EU cohesion fund monies, an increase in direct support for farmers, and continuation in financing of the Rail Baltic project. The combined effect of these investments will help us implement a green turnaround, become more innovative and continue advancing both the economy as well as the social environment," he continued.

Estonia has committed to the EU's goal of being climate-neutral by 2050. Estonia itself holds the portfolio for energy at the commission. Kadri Simson (Center) is the European Commissioner for Estonia.

Estonia a growing economy

Whereas Estonia, which joined the EU in 2004, had been a low purchasing power member state in the past, its economy has been growing rapidly since then, crossing the 75 percent threshold of average EU purchasing power per resident, Ratas said.

This means Estonia has to start contributing more financially towards EU common goals itself, now the country falls among the so-called transition regions in the EU, and cohesion policy funds available will concomitantly fall, with significantly higher co-financing ratios applying in the use of EU monies.

In order for development to continue, Ratas said it is vital for Estonia to be able to use EU funds as effectively as possible going forward, and for the ratio of own financing to grow not too steeply, but instead step by step. 

Areas where these effects have already been seen include road building; whereas Reidi road, which cost €43 million and was 85 percent EU-funded when completed last year, road building in Tallinn in 2020 is likely to continue in a much more modest volume.

Agricultural policy – the  implementation of rural development measures, direct agricultural support, and fishery and maritime activities – are also key to Estonia.

Estonia considers faster a more rapid raising of the level of direct support for farmers to a level closer to the EU average is key within the EU's CAP Ratas said.

Key meeting

Support for the high-speed Rail Baltic project, scheduled for completion in 2026, is also an important area, as is completion of the synchronization of the Baltic electricity networks with the Central European frequency area, the government says.

EU national leaders gathering in Brussels on Thursday are also keen to discuss a proposal by the President of the European Commission, Charles Michel, to agree on a budget of approximately €1.1 trillion for the 2021-2027 budgetary position.

Charles Michel has offered more flexibility within the Common Agriculture Policy (CAP) and more money to less developed regions in lieu of a larger budget, but has still met with opposition.

The 2018 European Commission proposed a budget worth 1.11 percent of of EU Gross National Income (GNI); the European Parliament asked for 1.3 per cent, but the net contributors are were not willing to go beyond 1 percent. Michel's figure currently stands at 1.074 percent.

Unanimous support by all member states as well as endorsement by the European Parliament are necessary for the adoption of the budgetary plan, BNS reports.

Following Brexit, around €15 billion must be found to make up the hole left by the departure of the second-largest net contributor to the budget, for the long term period.

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Editor: Andrew Whyte

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