Estonia borrows €200 million to support local governments

The Estonian state has signed a contract with the Council of Europe Development Bank (CEB) for a €200 million loan which will be used to finance local governments' crisis mitigation measures as well as measures aimed at micro-, small and medium-sized enterprises.

"We want to cover unexpected expenses caused by the coronavirus crisis and bolster entrepreneurship and the labor market in the economic and health crisis," Minister of Finance Martin Helme (EKRE) said.

"Thus far, the CEB has given its approval to nearly €3 billion in extraordinary measures," CEB Governor Rolf Wenzel said. "By supporting inclusive and sustainable investments, we are devoted to the rapid recovery of our member states from the crisis."

Among other things, the resources to be involved will help local governments cover the cost of preventing the spread of the coronavirus and mitigating its influence as well as ensure the continuity of vital services. The loan to be taken from the CEB will likewise support important investments into local infrastructure, such as local road maintenance and the expansion of access to broadband internet in rural areas.

In addition, the loan to be taken will also support Enterprise Estonia and Rural Development Foundation (MES) support and working capital measures aimed at Estonian micro-, small and medium-sized enterprises impacted by the crisis.

To a lesser extent, research and development activity related to the coronavirus will be funded as well.

Estonia has been a member of the CEB since 1998. The CEB has 41 member states, all of whom are also the bank's shareholders. First established in 1956 as an international development bank, the CEB bore the name Council of Europe Social Development Fund from 1994-1999. The CEB provides its member states with long-term loans at low interest rates in support of social development projects.


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Editor: Aili Vahtla

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