Ratas: Expense cuts during last economic crisis created even bigger problem
The cabinet is meeting at Sagadi manor in Lääne-Viru County from Wednesday, to discuss state budget for next year, along with the budget strategy for the next four years (2021-2024). Prime Minister Jüri Ratas (Center) said that austerity measures during the last economic crisis starting in 2008 drew the economy into an even deeper problem and, this time, the government says it is trying to avoid this by utlitising loans.
"We are definitely in a difficult situation. We are undergoing an economic crisis, we have a health care crisis and in that crisis, there is a lot of uncertainties, actually, it is still not known what are the possibilities for the vaccine. Today it was announced that a vaccine that the EU was hoping for, has stopped its developments," Ratas told ERR.
Ratas said that the uncertainty arising from the crisis puts the government in a difficult position, but he is sure that by the end of September, the state budget and strategy will be presented, he says.
The state budget is traditionally finalized at government level in late September, then goes to the Riigikogu for debates and voting, with a view to it passing in December.
The prime minister noted that Estonia has chosen a different direction compared with the last crisis, and the loan money helps from the larger whole.
"The loan money is just a finance tool. The question is do we want to exit this crisis the same way as 12 years ago where austerity was chosen, and which took the EU to an even bigger decline. Or we choose another way - and Europe has chosen the other way - and I think it's the right way," Ratas said.
See gallery for images of the Sagadi cabinet meeting.
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Editor: Roberta Vaino, Andrew Whyte
