Estonia to get €295 million from EU to combat coronavirus ({{contentCtrl.commentsTotal}})

European Commission representation in Estonia economics advisor Katrin Höövelson.
European Commission representation in Estonia economics advisor Katrin Höövelson. Source: ERR

Estonia could get nearly €300 million in European Union funds aimed at the fight against coronavirus. The money comes as a combination of release liquidity from unused structural funds, and funds released from the EU's budget.

Relief measures introduced by the European Commission pm Friday come as part of a €37-billion package aimed at combating the virus and initiated by the EU, European Commission representation in Estonia spokesperson Katrin Höövelson said Monday. €295 million of this will go to Estonia.

Of that total, €75 million is money that Estonia has not used from the structural funds allocated this year; while this was due to be returned to the commission under normal circumstances, the emergency situation allows Estonia to quickly mobilize it to cover coronavirus-related measures, Höövelson explained.

In addition, the European Commission, in relaxing the rules, allows this amount to be provisionally considered as national co-financing, rather than pure EU money even though it is technically that, which helps with Estonia's situation under the new long-term EU budget for 2021-2027, in which Estonia was facing a significant increase in the co-financing percentage – the amount which the country must put in towards EU-funded projects – from the 15 percent of the last period.

Amounts proposed by the European Commission for accelerated mobilization by country. Source: European Commission

The largest sum to be released as liquidity across the EU comes with Spain, which is getting €1.161 billion "back" from the EU to fight the spread of the coronavirus. The largest total corresponding EU budget sum for any member state is the €6.31 billion being granted to Poland. The largest total sum going to any member state also goes to Poland at €7.435 billion. By contrast, Luxembourg is having €1 million released as liquidity, plus another million corresponding from the EU budget, totaling €2 million. See table above for more information.

According to the European Commission proposal, money can be channelled into the priority areas including:

  • Ensuring the functioning of the member state's health care system, including the purchase of protective equipment, tests and equipment, e-health solutions, etc .;
  • Maintaining corporate liquidity and tackling short-term insolvency, especially in the most affected sectors of the economy;
  • Various measures to safeguard the population's income and jobs.

In addition, the European Commission is applying maximum flexibility in its state aid and budget balance rules, which helps countries better implement aid measures, Höövelson said.

The EU is also facilitating easier loans to the private sector, from the European Commission's Guarantee Fund, as an additional measure.

"In addition to the accelerated mobilization of EU budget money as a grant, it is noteable that there are plans to accelerate the use of loans to businesses by the EU Guarantee Fund, as proposed by the Commission on Friday," said Höövelson. 

"To this end, a quicker mobilization of loan and surety facilities through the European Investment Fund (the EIF – an EU agency for the provision of finance to SMEs-ed.) for businesses, primarily small and medium-sized enterprises, has been proposed, to respond to the situation caused by the coronavirus," Höövelson went on.

EU finance ministers are to discuss the European Commission proposals via a tele link up on Monday evening, ERR's online news in Estonian reports.

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Editor: Andrew Whyte

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