In 2021, the Estonian government and the European Union contributed a total of €637,8 million to businesses in Estonia. The ministry of finance reported the government on Friday that 83 percent of this money was allocated as state aid, with the remaining distributed as guarantees, loans and tax benefits.
There are two categories of financial support: state aid and de minimis aid.
"State aid accounts for €561 million of the entire amount, and it is gratifying to see that environmental protection received the largest aid this time, with €151 million, and that, for instance, about €80 million went to cultural operators," Minister of Public Administration Riina Solman (Isamaa). "Last year, de minimis help grew to about €77 million, almost all of which was distributed in the form of grants," she added.
In 2021, AS Elering (16 percent of total funding), Enterprise Estonia (15 percent), and the Ministry of Culture (13 percent) were the major providers of state support. The proportion of state aid to GDP fell by 1.22 percentage points.
State aid is defined as any selective advantage granted by a state, city or municipality to an economic operator which could, potentially, distort competition and trade within the European Union.
A government institution or publicly funded organization, such as EAS Enterprise Estonia (recently merged KredEx and Enterprise Estonia), Environmental Investment Center, etc., submits a notification of state support to the European Commission, and the funding is provided after Commission approval.
State funding is an element of EU competition policy, and its laws are critical for avoiding competition distortions caused by member states' actions to support specific businesses. This ensures that competition between businesses is fair and that large and small countries are on an equal footing.
De minimis aid is smaller governmental funding that does not constitute state aid because it does not affect competition and trade and so does not need to be reported to the European Commission.
Editor: Kristina Kersa