Coalition continues predecessor's coronavirus supplementary budget

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An extraordinary Riigikogu session last week, with some MP's wearing masks, discussed the supplementary budget, due for its first reading on April 6. Source: Priit Mürk/ERR

The Center/Reform coalition is to extend last year's supplementary budget drawn up by its predecessor in response to the coronavirus pandemic. The extension includes a continuation of loans from the KredEx foundation, a state-run credit agency which granted a controversial loan to a real estate project at the center of the collapse of the last coalition in January.

While Center was in the previous coalition with Isamaa and the Conservative People's Party of Estonia (EKRE), the latter held the finance minister post in Martin Helme, meaning the move is somewhat of a nod towards his work there.

The supplementary budget was issued in April 2020 and, as its name suggests added to the main state budget, which is drawn up in autumn of the previous year with a view to passing the Riigikogu vote before year end.

It was installed specifically to deal with the arrival of the pandemic and its economic effects, but was supposed to expire at year-end 2020. Now, it will run until June 30, ERR reports.

How much is left of the original €180 million is not reported, though any unused funds on June 30 will be transferred to state coffers.

The regulation extending the supplementary budget's term amends references to European Commission regulations on state aid in the coronavirus pandemic reflecting changes which have happened at EU level since the pandemic began.

The change applies retroactively to January 1 this year.

Other changes include extending support for apartment building reconstruction , and €14.3 million in agricultural support via the the Rural Development Foundation (MES).

A measure aimed at boosting the share capital of state owned companies – a measure used last year with airline Nordica – will also be continued, with a new budget of €10 million.

A €39-million KredEx loan to part-finished real estate development Porto Franco, in Tallinn's harbor area, hit controversy at the time over the fact that it was not generating revenue when the aid was issued. In January, news that the Internal Security Services (ISS) were investigating the project over suspicions of bribery and influence peddling engulfed the Center Party and also EKRE - a finance ministry adviser was one of the suspects - and led directly to Jüri Ratas' resignation as prime minister, though Center remain in office.

Other significant beneficiaries of KredEx aid during the pandemic include fuel company Alexela, which receied €37 million, while a real estate project aimed at rejuvenating a Tsarist-era prison complex, also in central Tallinn, was turned down in its aid application.

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Editor: Andrew Whyte

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