Olukorrast riigis: Government moving toward state bank by lending to firms

Hosts of
Hosts of "Olukorrast riigis" Harry Tuul and Andrus Karnau Source: ERR

The government is going down the path of creating a state bank by lending to struggling companies and projects, while it would not be out of alignment with the ideologies of two government partners, hosts of the "Olukorrast riigis" talk show found.

Harry Tuul pointed out that the government has already given favorable loans through KredEx to the Porto Franco real estate development and Baltic Sea shipper Tallink and is planning to issue loans to aircraft care and asset management firm Magnetic MRO and Urmas Sõõrumaa's Patarei Sea Fortress renovation project.

"Is the government planning on turning KredEx into a state bank? There seems to be something to it as they've already started by issuing major loans. I would like to know where it is headed," Tuul said.

Co-host Andrus Karnau pointed out that a state bank would match the ideologies of at least two government partners. "Center has criticized major Swedish banks in the past and the program of the Conservative People's Party (EKRE) actually includes a state bank idea," Karnau said. "Looking at it this way, the voter has provided a mandate for these developments," he said.

Tuul said it has been suggested that it doesn't matter how money reaches the economy. "The problem here is that some are granted very favorable loans. I would like to hear questions regarding these conditions," Tuul stressed. He pointed out that Magnetic MRO borrowed €8 million from the market at an interest rate of 8 percent a year ago when there was no crisis, while it's now being granted a loan sporting an interest rate of just 2 percent. The same conditions will be extended to Urmas Sõõrumaa whose project did not manage to secure a loan from commercial banks.

Karnau said it could point to corruption when not all companies have access to such loans.

The hosts also discussed coronavirus measures at Tallinn schools, the finance ministry's economic forecast and borrowing, the Estonian Association of Media Enterprises' complaint of alleged state aid for public broadcaster ERR, the Riigikogu's report of the government's contract with Louis Freeh's law firm and new restrictions for foreign labor.


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Editor: Marcus Turovski

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