Prime minister: Estonia's share of EU joint loan debt to be €1 billion ({{contentCtrl.commentsTotal}})

Prime Minister Jüri Ratas addressing the Riigikogu.
Prime Minister Jüri Ratas addressing the Riigikogu. Source: ERR

Prime Minister Jüri Ratas said in a political announcement in front of the Riigikogu on Monday that Estonia's debt share in the European Union's joint loan will be €1 billion.

Last week Ratas (Center) said the government is ready to support and participate in a one-off and time-limited support measure totalling €750 billion, which has been proposed by the European Commission to be shared by EU members. Of this, €500 billion is earmarked for grants and €250 billion for loans to countries. 

"According to the current calculations, Estonia's share in repaying the €750 billion loan of the European Union should be about €1 billion between 2028-2058. It totals about €35 million a year," Ratas said.

"Of course, this will become clear only during the negotiations, which will start already this Friday (June 19). Therefore, the government will submit the financing decision of the restart plan, i.e. the EU's own resources decision, to the Riigikogu for approval in the second half of the year," Ratas added.

Ratas said the share allocated to Estonia would increase by €3.3 billion in the next budget period of the EU of which €1.85 billion would be in grants and the rest a loan on favorable terms. 

"This is more than half of the amount we have available in the current budget period," Ratas said.

He also pointed out the loan burden is very different among the member states. "There is Estonia's 8 percent and on the other hand, Greece's 177 percent," Ratas noted.

"As a result, the countries have different capabilities in reacting to the crisis. According to the estimation of the European Committee, the debts of the governments can increase up to 95 percent of GDP and it can even increase as the recession deepens," the prime minister added.

Ratas said in order to implement the European Economic Recovery Plan, the resources ceiling must be temporarily raised from 1.2 percent to 2 percent for the financing period of the plan. "Of this, 0.2 percentage points is due to the fall in GDP to maintain the size of the Union budget and 0.6 percentage points for the recovery plan. The sole purpose of raising the funds ceiling must be to maintain a favorable AAA rating for borrowing."

He said: "The proposal does not change the nature of the EU and does not create new competences. Rather, the plan can be seen as a supplementary budget to the funds of the union's long-term budget."

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Editor: Roberta Vaino

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