Opposition leaders on EU common fund: Supportive but cautious

Reform Party chair Kaja Kallas
Reform Party chair Kaja Kallas Source: Siim Lõvi /ERR

While the opposition Reform Party has not formulated an opinion on the European Union's proposed €750-billion coronavirus recovery common fund, leader Kaja Kallas says she sees risks in it. Indrek Saar, leader of the other opposition party, the social democrats (SDE) says Estonia has a lot to gain from it.

"In general, common debt carries with it a number of risks. It depends a lot on the details of how it is still to be put together. And according to current information, there are still a lot of unclear points," Kallas told ERR Thursday.

"On the one hand, it is not right that countries that had already been more economically irresponsible before this crisis want to pass their debts on to more responsible ones. But on the other hand, in a global world, it is in our interests for Europe to be strong, for the eurozone to be strong," she went on.

The European Commission announced Wednesday evening a plan to borrow €750 billion to kickstart a European economy reeling from the COVID-19 pandemic. The bulk of this, €500 billion, would come as grants, with €250 billion in addition as loans.

The entire €750 billion would be borrowed over a 30-year term, according to media reports.

The common loan fund could complement the EU's €1.1 trillion budget set for the next seven years.

The coalition government itself lacks a single position on the issue as well, with Prime Minister Jüri Ratas (Center) calling it a step in the right direction, but coalition partner leaders Mart Helme (EKRE) Helir-Valdor Seeder (Isamaa) broadly opposing it.

SDE leader: Party generally in favor

Indrek Saar, SDE chair, told ERR that his party generally supports common lending.

"If the principle is to do what we have hitherto thought was important and useful to us, and which tends towards a stronger and better-off Europe in principle, including one much better prepared for crises, then it would be nonsense to fight against it," said Saar.

"There seem to be a lot of positive things in it for Estonia right now. First of all, if the fund increases, we will have more to obtain from it," he added.

SDE leader Indrek Saar. Source: ERR

"Second, the emphasis will continue to be on development and to ensure that it promotes a green economy and a fair transition. Estonia, for example, could receive four times more money for its fair transition [towards EU climate objectives] in Ida-Virumaa than previously planned, and more than half a billion towards solving problems associated with the disappearance of the oil shale industry in Ida-Virumaa," he went on, adding that the package would also promote digital development.

Kallas: Common taxation system less appealing

Kaja Kallas noted the Reform Party was more skeptical about the introduction of common taxation, also proposed at EU level.

Kallas said that keeping Europe strong comes at a price, but the details of the package should be thoroughly studied, and debated at the Riigikogu and given a mandate there, as the European Stability Mechanism (ESM) had been.

Indrek Saar cited President of the European Commission Ursula von der Leyen. "She has said that her proposal is to talk about a one-off agreement, which will not change any basic principles for a long time, and which has even brought positive feedback from this skeptical quartet (meaning  the Netherlands, Austria, Sweden and Denmark who have opposed the plan, initially proposed in part by French President Emmanuel Macron and German Chancellor Angela Merkel ten days ago -ed.)."

Going forward, the package is still at debate stage at the European Council level, Kaja Kallas added.

"Based on the current information we have from international sources about this package, it is only to be discussed. On June 19, the [European] Council will meet for the first time in a long time. We do not know in what form or how this package will reach us on the table at tpresent, she continued, noting that at least three of the EU's main organs – the commission, the council and the parliament - needed to be brought in.

"This is a proposal from the European Commission, but it also requires the consent of the European Council, a position from the European Parliament, and having been in this system myself (Kallas is a former MEP-ed.), I know that these packages can change a lot during the process."

"When this comes to us for discussion at the Riigikogu, then we will form a position very clearly," Kallas added, noting the party itself is to meet on the issue next week.

Indrek Saar said a Riigikogu madnate was sufficient for the joint loan package.

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Editor: Andrew Whyte

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