Minister: Government to press EU funds into kick-starting Estonian economy

Kristjan Järvan appearing on
Kristjan Järvan appearing on "Otse uudistemajast", December 21, 2022. Source: Ken Mürk/ERR

The government has made a political decision to implement counter-cyclical economic policy measures, with European Union subsidies to be brought to bear on this as early as possible, IT and Foreign Trade Minister Kristjan Järvan (Isamaa) said Wednesday.

These funds could be used, for instance, in government procurement projects.

Appearing on ERR political webcast "Otse uudistemajast" Wednesday, Järvan said: "Decisions have been made at political level, so officials can now start to prepare technical decisions based on that."

"The trump card in this lies in the fact that all these measures had already been agreed upon during the state budget negotiations. The funding is already there, and we will use it at a more rapid pace, to balance the [economic] cycle," the minister continued.

As to the question of where this funding will come from and whether a loan is planned, the minister answered: "No, it is not - the money is already there. Essentially, the money is available for a five year period, and will be available from 2023."

We then have to decide for ourselves how much we spend every year, then we can increase spending for the next four years, by a half. As a result, we can make [the economic cycle] smoother. This is the 'golden key.'"

Järvan also stressed that EU funds for road construction were, in the meantime, falling. "Perhaps the summa summārum would be this: How much money the state directs towards construction; this is not a rosy picture. All the more reason why these investments must be increased by half, in advance," he added.

When on what sums we are talking about, the minister answered that it was in the ballpark of hundreds of millions.

"We have €400 million for reconstruction, we have energy support measures, we already have €40 million for digital issues [allocations] towards the engineering academy, mad €25 million for the 'last mile,'" he enumerated.

"In actual fact these EU 'money pots' are around and about and are planned for the long term, but we can as things stand bring half of them forward, and our team is working on doing that," Järvan said.

Information on these options is being gathered from all the government ministries, he added.

On concrete example of how state procurements could kick-start the economy which Järvan gave concerns the Ministry of Defense, which he says can bring forward uniform procurements, which will benefit the textiles and other relevant sectors.

Järvan also criticized the decision agreed at EU level last week to extend carbon emissions trading to the transport and buildings sector (ETS2), and said that he hopes to win enough votes at the Riigikogu elections in March, where he is running in the Haabersti, Põhja Tallinn and Kristiine electoral district, to win a seat in his own right.

Government ministers do not sit at the Riigikogu but are permitted to run in elections and generally do, since parties see them as potential "vote magnets" whose votes can then be distributed to other candidates lower down on the electoral list.


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Editor: Andrew Whyte, Mait Ots

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