Culture sector proposes crisis exit strategy

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Minister of Culture Anneli Ott (Center). Source: Siim Lõvi/ERR

More than 320 members of the cultural sector – music, art, performing art, museums, folk art, literature, film and cinema – have suggested a crisis exit strategy and presented it to the minister of culture.

ERR News republishes the appeal below:

Honourable Government of the Republic

Cultural organisations have a clear understanding of the fact that COVID-19 infections are on the rise and that our healthcare system has been pushed to its limits. A year ago cultural institutions closed along with other sectors to curtail the spread of the virus, and just recently the situation repeated itself. Over the past year, we have learned how to cope with the crisis together with our government. In cooperation with the Health Board, the cultural sector has acquired the essential skills and knowledge needed to effectively implement measures that international research studies have recommended for limiting the spread of the virus.

We jointly find that following the example of other European states, restrictions must be accompanied by mitigating crisis measures, which would ensure the survival and development of the cultural sector. European states are finding additional resources to bring their sectors out of the crisis. In our opinion, this is the single most appropriate approach for Estonia as well. The wellbeing of our people, the resilience of culture and businesses will lay the path to future budgetary balance.

Culture is a driver of the Estonian economy, which is heavily reliant on tourism and the service sector. The looming bankruptcies and closures of businesses in the cultural sector will have a widespread negative effect on the whole economy. Closing cultural establishments and limiting the economic activity of businesses that offer them services must be coupled with solutions that take into account the needs of these fields of activities, so that the sector could remain resilient and recover.

Over 30,000 persons (approximately 5 percent of the labour force) work in the cultural and creative industry in Estonia; that includes approximately 10,000 companies, whose combined earnings constitute 3 percent of GDP (over €1.5 billion). At the same time, it is important to keep in mind that the impact of culture on the economy is much wider than the sector's own figures – for example, nearly 40 percent of all tourism is motivated by culture, and visitors of cultural events on average spend approximately 4 times the amount spent on tickets on other services. The cultural sector increases the country's international profile and fosters economic development, also attracting foreing investments. In addition, culture more generally creates value for various cities, regions and neighbourhoods by fostering regional development and integrating communities. In the context of the mentioned added value, it is worth noting that ca 90 percent of the creative economy has so far been self-reliant, independent of any state support or funding. In sum, the cultural sector impacts a very wide network of stakeholders and related services. Having been heavily hit during the crisis, the recovery and restoration of the cultural sector without aid would prove to be very difficult and costly. 

We also want to emphasise the role of culture in supporting mental health during a difficult time. When we look back at Estonian history, it has been culture that has provided our people with purpose and relief through uncertainty and challenges. Therefore, reopening cultural life at first opportunity is of a definitive importance to the population's general wellbeing, to the rebuilding of the sector, as well as to a fast restart of the economy. Our opportunity today is to act on the learnings from the past year as well as the knowledge collected by our international partners, in order for the opening to proceed faster and more smoothly than last year.

Necessary short-term measures:

● From February 2021 until October 2021, allocate a crisis aid package to the sector, which would allow

○ Covering part of the fixed costs of the cultural organisations (in addition to labour costs, also rental and administrative costs). The Estonian Unemployment Insurance Board salary measure does not cover all the needs of cultural establishments and businesses;

○ Create a risk fund for professional event organisers, to grant security and to finance ticket returns. This would give both organisers and ticket buyers the confidence that even in case of event cancellation, postponement or loss of income due to restrictions, costs will be covered. Similar risk funds have also been established elsewhere in Europe;   

● Allocate and target additional grants/support to creative persons through creative unions. In order to support the freelance creative persons active in the sector, the creative unions need additional resources. It is also important to create opportunities for those creative persons, who are not included within the scope of the Creative Persons and Artistic Associations Act. We are aware that this aid package has been offered by the Government, however, in light of the restrictions currently in place as well as the long-term exit strategy, the current offer is only a partial solution.

We emphasise that the need for short-term crisis aid is now more acute than a year ago, because the reserves have been exhausted, coping is inhibited, and recovery without aid is impossible.

Necessary long-term measures: 

●  Increase funds allocated for the recovery of culture and the creative economy from European Union funds – including the 2021-2021 European Structural Funds and the Just Transition Fund. Estonia has not allocated funds to the creative sector from REACT-EU. Additionally, the financing of the sector from other EU funds has been insufficient. At the same time, the European Commission has highlighted culture as the sector hardest hit by the crisis (European Commission 2020) and the European Parliament has called on the Commission and Member States to earmark at least 2 percent of the European Recovery and Resilience Facility for their support.

●  Consider a lower VAT rate that would support the sector's recovery as a temporary support measure.

In cooperation with the representatives of the cultural sector, it is important to develop both short- and long-term measures according to the specific needs of each field of culture, based on their individual propositions as well as this joint proposition. In addition, it is important to coordinate the communication of messaging that will support the gradual and responsible reopening of culture. In so doing, we can ensure the economic sustainability of the cultural organisations, businesses, creative persons and support service providers active in the sector. Without a recovery mechanism from the state, we are in serious danger, and our cultural diversity and continuity are in grave danger. 

Culture is our constitutional imperative, and its preservation is the basis of the continuity of our state. The main objective of the Constitution of the Republic of Estonia is to guarantee the preservation of the Estonian people, the Estonian language and the Estonian culture through the ages.

Representatives of the cultural sector request a meeting with the following ministers of the Republic of Estonia: Prime Minister Kaja Kallas, Minister of Finance Keit Pentus-Rosimannus, Minister of Entrepreneurship and Information Technology Andres Sutt, Minister of Economic Affairs and Infrastructure Taavi Aas and Minister of Culture Anneli Ott.

Translation: Tiia Falk

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Editor: Helen Wright

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