Finance minister: Economic growth gives us chance to mitigate cuts

Minister of Finance Keit Pentus-Rosimannus (Reform).
Minister of Finance Keit Pentus-Rosimannus (Reform).

Minister of Finance Keit Pentus-Rosimannus (Reform) said a strong economic growth forecast gives an opportunity to review €60 million in planned cuts but the public finance deficit must be overcome.

In an interview with ETV's current affairs show "Aktuaalne kaamera" on Thursday, Pentus-Rosimannus said one reason for the better than expected results is due to Estonia's loser coronavirus restrictions businesses have been able to continue their work.

"The other reason is definitely the government's decisions to direct targeted and short-term support to the right place and in advance," the minister said.

She said, although Estonia has recovered faster from the economic crisis than many other countries, the recovery has been multifaceted. This means that there are still sectors, such as accommodation, catering and culture, which have not recovered to pre-crisis levels.

"As a whole, it must be said that this crisis has not been wasted in this sense. Our economy, our business, our entrepreneurs have become much more productive," Pentus-Rosimannus added.

The opposition is now calling on the government to abandon austerity plans announced in the spring. Pentus-Rosimannus said that it is possible to withdraw relax the plan.

"Economic growth will certainly give us the opportunity to alleviate the austerity challenge in the most sensitive areas. It is primarily about internal security, but it is also about the social sphere, for example. I think it is sensible to do so if there is an opportunity," she said.

"But on the other hand, in the big picture, we need to move forward with state reform, and even now our state budget, despite the 9.5 percent growth, is still in deficit by a billion euros," she said.

Pentus-Rosimannus repeated that the state will definitely continue with public sector savings.

"We have been talking about state reform with this government since the spring. The fact that public spending must be under control - must be brought under control - should be a matter of course in all ministries and areas of government. It is no longer the most relevant in terms of the use of taxpayers' money, it must be done in all areas, and we will certainly move forward with that," she said.

The minister added all areas of government will have had to work hard to find places to reform and save.

Rescuer workers and teachers' salaries to rise

Pentus-Rosimannus said state budget negotiations are only just beginning, but the government is trying to find a way to increase the salaries of internal security workers, especially the emergency services, and teachers.

"We must look at the increase in the average wage, otherwise the difference will just become so big that it will be very difficult to make up for it later," she said.

Pentus-Rosimannus said the same thing in "Esimene stuudio" later the same evening but refused to say how much wages would increase.

The minister said one of the problems with teachers' wage for example, is that the previous government decided not to change their wages this year, and as a result, teachers' wages have fallen below average.

She added that due to the decision of the previous government, it is necessary for the current government to find more money for teachers' wages.


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Editor: Roberta Vaino, Helen Wright

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