Reform MP: Main question around loans is how we use them

Reform MP Maris Lauri.
Reform MP Maris Lauri. Source: Kairit Leibold/ERR

Reform MP Maris Lauri says the main issue at stake in any potential increase in state debt burden is how much to borrow and what any loan would be used for.

Appearing on ETV political discussion show "Esimene stuudio", Lauri, whose party is in opposition said the government had made some right decisions during the crisis sparked by the coronavirus pandemic, noting the implementation of a wage subsidy measure. 

"The fact that we were able to keep our businesses running in terms of exports was definitely helpful," she said, referring to a scheme which provided 70 percent of employees wages, to a maximum of €1,000, at companies whose business had been demonstrably hit by the pandemic and its after effects.

However, borrowing and borrowing was not the right road to go down, but more pertinent is what borrowed money would actually be spent on.

"In my opinion, no one has argued that it is sensible to borrow in this crisis. Estonia can borrow and can borrow, at a reasonable price. The question is how much we take, and why and on what we use this loan money," she said.

Sven Sester, a former finance minister, also appearing on "Esimene stuudio", said that following the presentation of the summer economic forecast, a point has been reached where political and economic decisions can be made.

"At the moment, we know what the economic forecast is, what the current mapping is, its 'X-ray'," he said.

Maris Lauri said that the current deficit and debt burden projection of €10 billion may turn out to have been an underestimate, however.

She also pointed to a diversion of state measures from their intended purpose, with loan money, for instance, not all having been used.

"As a result, it seems that the loan money, which was intended to be injected into the economy via various measures with Kredex and Enterprise Estonia, seems to be used to cover running costs," she said.

Major KredEx loans include €100 million granted to strife-torn ferry line Tallink, and, somewhat controversially, the half-completed Porto Franco construction project, which received close to €40 million.

At the same time, the Ministry of Finance's recent forecast LINK shows that a somewhat rapid economic recovery is on the horizon.

"At present and according to this forecast, things seem to get to a stage where we were on the eve of the crisis, by the end of next year," she said.


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Editor: Andrew Whyte

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