Minister of Finance Martin Helme (EKRE) said at a government press conference on Thursday that Estonia has a deficit budget this year and will likely have one in several years to come. An extension of wage support for the tourism industry is not on the cards.
Helme added that if the wish was to balance the state budget next year, it would mean a task of cutting in the extent of a little less than a billion.
According to the finance minister, this would mean looking very seriously at pensions, the Health Insurance Fund and all public sector salaries.
"I think that we will not be going down that road," Helme said.
However, he emphasized that the extra money borrowed must be spent reasonably and in anticipation of future profits.
"This means that we will probably be talking a lot about different public investments," the minister said.
Wage support of Unemployment Insurance Fund has exhausted itself
Helme also said the Unemployment Insurance Fund's wage support measure was a shock buffering measure and has exhausted itself by now.
Last week, almost all the professional associations of the Estonian tourism industry sent a letter to the government asking them to restore the wage support scheme of the Unemployment Insurance Fund for companies operating in the field of tourism until the spring of 2021.
In their statement, the professional associations pointed out that the drop in income in the sector has been 50-90 percent. According to them, the support measure would help to prevent the redundancies of around 15,000 people.
On Thursday, Prime Minister Jüri Ratas (Center) said the Unemployment Insurance Fund's wage support measure was effective, but also very costly, and the Unemployment Insurance Fund's reserve, from which the measure was financed, currently has 6.5 times less funds than in the spring before wage support was implemented.
"The Unemployment Insurance Fund definitely does not have such a reserve at the moment so as to implement the same measure that was in place in spring," Ratas said. "If we only talk about the tourism sector, it must, of course, be discussed, but I think that there will be more and more of these sectors in the coming months. So I think this view needs to be looked at a little more broadly," the prime minister added.
Commenting on support measures, Foreign minister Urmas Reinsalu (Isamaa) said that a long-term crisis must be taken into account when developing the next measures. "Short-term survival, so to speak, with this logic - in the perspective of a few months - this is definitely not sustainable," the minister said.
"Adaptation, unfortunately even in the sectors that have suffered the most, there is no escape from that," Reinsalu said.
Editor: Helen Wright