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Estonia to support EU economic recovery plan

the cabinet meeting on Saturday.
the cabinet meeting on Saturday. Source: Valitsuse kommunikatsioonibüroo

In a cabinet meeting on Thursday, the government decided on Estonia's stances on the European Union's plan for economic recovery and on the long-term EU budget for 2021-2027. The government wants the decision on financing economic recovery to be made by the Riigikogu.

Investments made for economic recovery must be directed towards the future and help carry out EU's digital strategy, finance the achievement of EU's climate targets, and strengthen the internal market.

The Estonian government is ready to consider a one-time, temporary emergency loan to finance economic recovery through the EU's budget, the government Communications Office announced.

The government does not support the covering of running expenditures from the budget for economic recovery. Additionally, a requirement for a transparent and predictable repayment schedule will be insisted upon.

Estonia prefers a repayment plan leaning on GNI-based contributions.

The government will also not support additional sources of income to finance EU's budget and the recovery plan, and will prefer to finance it the way it is done now, through contributions based on the wealth of member states.

Estonia's stance is that a consensus must be reached in taxing issues. In addition, the debt burden of countries with below-average standards of living should not raise higher than of wealthier states.

The recovery plan must be confirmed via member state consensus, a legal certainty that the plan is in accordance with previous EU treaties, is also critical. The government wishes for the decision on recovery plan financing to be made at a Riigikogu plenary sitting.

EU heads of state will discuss the economic recovery plan and long-term budget for 2021-2027 on June 19.

Along with unanimous support from EU member states, an agreement must be reached in the European Parliament. Member states hope for an agreement by the end of July.

The recovery plan must alleviate a possible economic crisis. According to the European Commission, a 7-16 percent recession is expected in Europe in 2020. The European Central Bank predicts a 5-12 percent recession for the European Union.

As of the initial plan, the European Commission would borrow €750 billion to restart the economy, of which €500 billion would be given to member states as support and €250 billion as loans. The fund based on the joint loan also would complement the European Union's seven-year €1.1 trillion budget.


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Editor: Kristjan Kallaste

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