Estonia does not support a proposal by several euro area countries to issue euro area bonds to help manage the coronavirus crisis, but should certainly take out a loan once the EU launches opportunities to do so, Minister of Finance Martin Helme (EKRE).
"Our fundamental position is of course a no," Helme told ERR ahead of Tuesday evening's online meeting of euro area finance ministers. "We do not agree to combining euro area debts, as we, who have Europe's lowest debt burden, would see our debt burden increase without us having spent any of this money."
That does not mean that Estonia would be against specific aid measures for those countries currently facing the largest crises, he added on "Uudis+."
Helme explained that while there has been talk of "coronabonds," this is a general term without any specific meaning, as no details have been agreed upon. "What gets detailed under it or what each person considers it to be is very different," he said.
He also recalled that when aid measures were drawn up during the last crisis, whether the European Stability Mechanism (ESM) or others, these were always based on the idea that it was a specific country or group of countries that was facing difficulties. "But we are now in a situation in which essentially all of Europe is facing the same difficulty — economies are at a standstill, and taxes are not being received. In such a situation, typical schemes — help from the wealthier to the poorer — in such form are irrelevant."
Asked what Estonia's responsibilities would be in the event that bonds were issued, Helme responded that it is too soon yet to discuss this.
"Regarding all of the schemes proposed by the European Central Bank (ECB) or Commission, I must say that they are first and foremost talking about loan schemes, which in the case of some countries may also be necessary, as we have states whose debt burdens are so great that their ability to secure loans has been substantially reduced," he said.
While struggling member states want an injection of money from the EU, the European Commission is offering it with states' own money, Helme noted.
"In other words, send the EU money and then we will distribute it among states," he said. "Which is very understandable, because that is how the EU has always worked. But that is not what member states expect or want right now or what would help them at all."
On the subject of possible amounts, the finance minister said that the most specific measure which has been discussed and gotten anywhere at all is the launching of the ESM and the opening of lines of credit equal to 2 percent of each country's GDP.
"For Estonia that means an estimated €450 million, but at the same time, we have committed there in the amount of €1.2 billion," he said. "So we could loan back one third of money we have loaned there. This ilustrates what kind of schemes we're even talking about. Most of them are fairly similar."
Estonia must loan money
Helme also explained why he deemed it necessary for Estonia to definitely take out a loan once EU aid schemes are launched.
"What we can be sure of is that all central banks worldwide are desperately printing more money, which is being directed into the economy via loans, invigorating the economy," he said. "Which means that if we passed on the opportunity to utilize this additional printed money via loans and advance our economy with it, then we will not see any benefits from it. It is clear, however, that if loans are written off via inflation or some other means, then we would still be negatively impacted, because we are also in the euro area."
He added that he did not consider it a realistic approach to be the only smart country to avoid using this money and later think that we are in a better position than others.
Editor: Aili Vahtla