Finance minister: Fatal mistakes of last economic crisis can't be repeated

Martin Helme.
Martin Helme. Source: ERR

Minister of Finance, Martin Helme (EKRE), said that during this economic crisis deriving from the coronavirus crisis, mistakes that were done during the last crisis in 2008, can't be repeated. Setting a goal of a balanced budget by the year 2022 is utter barbarity in his opinion.

Helme repelled the claims in ETV current affairs show "Esimene stuudio" that the government taking a loan in the current stage will bring Estonia to debt bondage. He explained that the debt burden will be smaller than it is for other European countries.

"I really want to take care that during this crisis, we won't make fatal mistakes we did during the last crisis where the situation was the worst among European countries as a result of clearly wrong national policies, the recovery took the longest in Europe, and we lost 100 000 people to emigration, and today we are shouting about the need for Ukrainian workers to help. So this time we want the crisis to be as short as possible, the fall to be as small as possible, and the recovery to be as quick as possible. For this, we need to spend money on, "he added.

Eesti Pank's President Madis Müller wrote on Wednesday, that when according to the finance ministry's plan, the economy will recover during the year 2022, there is no longer any reason to continue with additional spending in times of crisis and to keep the budget in a large deficit.

Helme said that 2022 would be too early to bring the budget to balance.

"Setting a balanced budget target for 2022 is utterly barbaric. It will result in all the things that happened with the previous crisis - exacerbating the economic crisis, deepening it, rising unemployment, reducing tax revenues, slowing down the recovery. I do not agree with that. If the average electorate of the Reform Party said it, I would understand, but if the president of Eesti Pank says it, it is not due to his adequate assessment of the economy, he is ideologically motivated," Helme said.

The Minister of Finance stated that the impression that he only wants to spend is wrong. He said that, for example, in the previous budget, he suggested finding saving places. He acknowledged that, after the crisis, a balanced budget was indeed needed.

"Why is everyone trying to give the impression that I am such a money spender, is that I am very clearly aware that in the economic crisis, the economy needs to be stimulated and this can be done primarily with loan money. And when we get out of the crisis, we have to get back to a balanced budget. "

Helme pointed out that there is no longer a country in the world that necessarily demands a balanced budget.

"If we talk about the dogma of a balanced budget, then there are no real carriers of this dogma anywhere in the world. Germany, which has been the chaser of this so-called black zero and austerity policy for years, has officially announced that all the breaks are gone and we will start to stimulate the economy. Considering this background, we should be insane and irresponsible if we say that the free money that is printed, the money that is distributed from the funds and the money that we can raise from the market to our economy, to raise our standard of living or at least maintain, that we won't take it," Helme said.


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Editor: Roberta Vaino

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