Riigikogu burns midnight oil to pass €878-million supplementary budget

A Riigikogu sitting from May 18 2022.
A Riigikogu sitting from May 18 2022. Source: Priit Mürk/ERR

A supplementary budget worth close to €900 million and issued in response to Russia's invasion of Ukraine passed at the Riigikogu in the small hours of Thursday morning, by 54 votes in favor to 29 against.

The overnight sitting also passed three other pieces of legislation, effectively as a quid pro quo between the two coalition partners, Reform and Center, while the supplementary budget bill was tied to a vote of confidence in the same administration.

The supplementary budget, worth €878 million in total and roughly divided into three parts to be spent on defense and security, energy security and hosting refugees fleeing the war in Ukraine, passed its first reading on May 4, but following a government rift last week, was tied to a vote of confidence in the coalition.

Government ministers were also quizzed by the house on all the items on the agenda.

The supplementary budget was not even addressed until last on Wednesday evening, and the vote approving it was held just before 3 a.m.

Amendments to the Family Benefits Act tabled by Center last week passed with 60 votes in favor at the 101-seat chamber.

Nine Isamaa MPs opposed the bill, while the opposition Conservative People's Party of Estonia (EKRE) MPs did not vote on the bill at all.

An amendment was added which will grant a one-off allowance of €50 to children and pensioners in November this year, while home loan repayments will now be taken into account in calculating benefits, as will the situation of any pensioners who live alone sub-letting or renting out their home to Ukrainian refugees – in this case they would not lose the status of living alone and the benefits pertaining to that.

Another act, the Alcohol, Tobacco, Fuel and Electricity Excise Duty Act, was also amended, and the latter was also tied to the vote of confidence. It passed with 57 votes in favor.

The amendments will cut excise duty on special purpose diesel from June 1 to December 31 to the minimum level allowed in the EU.

Excise on special purpose diesel will be drastically cut from €100 per 1,000 liters, to €21 per 1,000 liters – the minimum level permitted by the EU between June 1 and the end of the year

One more bill, which amended the VAT act and was also tied to the confidence vote, passed with 58 votes in favor – 22 Isamaa and EKRE MPs voted against.

This will cut the VAT rate applicable to press publications from 9 percent to 5 percent as of August 1, with the express aim of supporting the availability of an independent and professional quality media in Estonia as a counter to Kremlin misinformation and propaganda.

Center MP: The government will survive

Following last week's speculation of a coalition collapse, Center MP and chair of the Riigikogu's finance committee, Andrei Korobeinik, told ERR that while tensions remained with the party's relationship with Reform, the partnership will go on: "And we will support the government and vote in favor of these four bills, including the supplementary budget."

EKRE MP Mart Helme concurred that the Reform-Center coalition would remain intact, telling ERR that: "I have no doubt that the government will survive."

At the same time, splits were an attritional process, he said.

"I can also say from the previous government's experience that every time there is such a storm, the connection gets weaker. It's like a tree that the storm is pushing and pushing and at some critical point, a fracture will come. I do not rule out this fracture arriving in the coming months, but not now," he went on.

EKRE was in office with Center and Isamaa April 2019-January 2021.

The supplementary budget provides for €247.6 million on defense and security, €257.3 million on energy security and €242.7 million towards support for refugees fleeing the Ukraine war.

The overall budget figure of €878 million remained unchanged across the two Riigikogu readings; the impact of the supplementary budget on the nominal budget position of the general government will stand at €626 million, or 1.9 percent of GDP, for 2022, ERR reports.

After Center tabled the bill amending the Family Benefits Act which will boost monthly child allowance to €100 per child plus €700 a month for those raising three to six kids and €900 for people raising seven kids or more, Reform objected, saying that the agreement had been to factor in these hikes into the 2023 state budget, due for Riigikogu debate in the fall.

Ultimately President Alar Karis stepped in and noted the dangers of a governmental split given the current security situation.


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Editor: Andrew Whyte

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