Government hopes to move on with EU-funded Tallinn Hospital

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A rendition of Tallinn Hospital. Source: Tallinn City Government

On Thursday, the government agreed on how the funds from the European Union's recovery fund and React-EU fund should be used. Estonia is set to receive up to €1.278 billion in funding and the government has not set aside the idea of the Tallinn Hospital complex.

Estonia should shortly present their ideas on how to use the EU's Recovery and Resilience Facility to the European Commission. The previous government agreed on an initial plan in December, but the new government in power thought it wise to go over the ideas once more.

Estonia could receive some €1 billion from the EU recovery fund, but the exact sums have not been announed yet. Last summer, the commission set Estonia's mark at €1.1 billion, but since Estonia's economy has done well in the time since, the commission reached a calculation of €970 million in January.

Minister of Finance Keit Pentus-Rosimannus (Reform) said the government decided to move forward by planning for €1.1 billion. "Since the current plan is our proposal, based on which we will head for discussions, it is also reasonable to ask for the maximum amount and not to look for filler or additions to the program," Pentus-Rosimannus said.

Estonia must then discuss the plan with the European Commission and the most complicated object of discussion was already added by the previous government. The new government intends to stick with their plan and hopes to allocate €380 million for the construction of Tallinn Hospital.

Pentus-Rosimannus said the commission has been skeptical of the hospital complex so far. "I myself had an hour-long discussion with European Commission representatives, the head of the recovery fund, to whom I had to explain the background of this project. It is true, the European Commission has been rather skeptical and critical of the Tallinn Hospital investment," the finance minister noted.

The commission has noted that Estonia's healthcare issues reside in other factors. Among many things, the commission has asked if Estonia has enough doctors-nurses and has emphasized that primary level healthcare services should be made more accessible.

Pentus-Rosimannus noted that there have been considerable investments into primary healthcare, as nearly 50 family phisician centers have been developed. "One of the most important parts of the Tallinn Hospital is that the development of the hospital allows for more quality and better services for each Euro," she said.

According to the finance minister, the European Commission could also be swayed by the fact that most of Estonia's healthcare infrastructure is more than 50 years old and the development of a new hospital could allocate healthcare workers more effectively. "The effects of the Tallinn Hospital would reach far beyond Tallinn. The region, where services could be used, is much wider and greater," Pentus-Rosimannus said.

In relation to the Tallinn Hospital, the government will not only have to answer to questions from the commission, but also domestically: Does the development fit the time frame? 70 percent of the recovery fund's resources must be covered by contracts by the end of 2022. By 2026, the money has to be used up. Those, who do not uphold the deadlines are facing the threat of losing EU funding entirely.

Tallinn Hospital has not reached the design process yet. How can the government ensure that a construction contract could be signed in less than two years?

According to Pentus-Rosimannus, the project's presenters have confirmed it is not unrealistic and the development expects fast and effective action. "Based on those plans and assessments, the government cabinet was able to decide today (Thursday - ed) that we can go forward with this plan. But certainly, it is a very intensive schedule," she noted.

Large allocations into tourism

While the government left the Tallinn Hospital idea untouched, they did make certain changes in other chapters of the previous government's plans, such as the Rail Baltic terminal in Ülemiste, for which the government hopes to allocate €31 million of the EU recovery fund.

Resources are also needed for the development of skills for the digital revolution and for so-called green jobs, Pentus-Rosimannus said.

For there to be anything added to Estonia's plans for EU funding, some things had to be taken out. The finance minister said the government decided on leaving all planned projects in, but funding could be redistributed to structural funds instead. "For example, the development of the population registry, that was planned for the recovery fund. Now the funding will be included in the structural fund resources," she said.

In addition to the EU's recovery fund, the government also agreed on the use of the React-EU fund, meant for rapid reaction to issues related to the coronavirus pandemic. "The largest change in the crisis fund comes in the support for tourism. We extended support for the tourism sector up to €17 million," Pentus-Rosimannus said.

As of December, the tourism sector was set to receive €5 million from the React-EU fund. Resources were allocated to support the sector through the Unemployment Insurance Fund (Töötukassa), which can be supplemented by leftover balance from the previous funding period, the finance minister said.

Estonia and the European Commission have also discussed the possibility of the React-EU fund going toward the purchase of COVID-19 vaccines. The commission has previously mulled the idea of only distributing the resources for vaccination organization. Things are clearer now.

"If there is a second wave of vaccinations, the commission does not deem it possible to fund that from the crisis fund. But as of the current plan, financing for vaccines and vaccination organization is possible for up to €25 million of the fund," Pentus-Rosimannus noted.

Coronavirus vaccination. Source: Ken Mürk/ERR

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Editor: Kristjan Kallaste

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