Reform leader stresses need to conserve public funds in lengthy crisis

Reform leader Kaja Kallas. Source: ERR

Reform Party leader Kaja Kallas said the ongoing economic fallout from the coronavirus pandemic will not be over quickly, meaning the coalition government and the state must not squander its reserves in just two months. At the same time, financial self-discipline, something Kallas said Estonia is noted for, should not be let slip in any case.

"This crisis will likely be a marathon, not a sprint, and we must not use up all our financial resources in the first two months," Kallas said on Thursday, BNS reports.

The supplementary budget, aimed at alleviating the economic effects of the COVID-19 coronavirus and set to cost €1.15 billion, saw its first reading at the Riigikogu Thursday.

"In the next phase of the crisis, support measures must be targeted, such as the temporary acquisition of a stake in a major company or infrastructure investments," Kallas said in the parliament on Thursday.

Tallink CEO Paavo Nõgene had said Wednesday evening that a government stake – the figure touted by finance minister Martin Helme was X – in Tallink on a temporary basis was perfectly possible.

Kaja Kallas also noted that Estonia's creditworthiness need not be damaged by spending during the crisis.

"We have been the country with the best finances in Europe, which is why the current government can issue short-term bonds for €200 million and the next day take out a loan of €750 million. We must maintain this capability for the future," Kallas said.

At the same time, the Reform leader said that measures aimed at helping those affected adversely by the crisis should not be held up due to bureaucracy.

"Offering loan guarantees and working capital to companies via KredEx, plus support measures aimed at ensuring people's income through the Unemployment Insurance Fund (Töötukassa) and Health Insurance Funds (Haigekassa) are absolutely correct. It is important that these measures are made without excessive bureaucracy, and reach people and businesses quickly," Kallas said.

The Unemployment Insurance Fund is being used via a government scheme whereby 70 percent of staff salaries at companies which are in trouble can be paid for by the state, up to a maximum of €1,000 per person and for a maximum time period of two months, as things stand at present.

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Editor: Andrew Whyte

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