Government bill would reduce Riigikogu say over emergency cash reserve
Finance Minister Mart Võrklaev (Reform) on Tuesday sent for a three-day coordination round a draft bill which, were it to pass into law, will temporarily find extra sources of funding for the state, but at the expense of the legislature's options in having a say on making payments towards unexpected expenses.
Daily Postimees reports (link in Estonian) that the minister's desire is to add on to the liquidity reserve – the state's expenses current account in essence – a cash reserve which hitherto had been prohibited for use on day-to-day spending, namely the stability reserve (Stabiilsusreservi), which as of June 30 totaled €430 million.
Until now, the state has kept this money in order to be ready to pay salaries, pensions and allowances even during unforeseen crises.
This fund had up until now been kept in reserve for the payment of wages, pensions and allowances, including in the event of unforeseen crises.
The argument put forward in favor of the bill to pool reserves is that it allows savings on the interest costs paid on loans, Postimees report.
Auditor General Janar Holm in his evaluation of the bill brought out two changes it will bring: One is that it will reduce the scope the Riigikogu has in input on solving emergency situations and crises in future, given that the Riigikogu had before decided on the use of the stability reserve whereas under the terms of the bill the funds are the government's to dispose of, as with the current liquidity reserve, and the other, government management of money flows become more flexible if the state no longer has to keep one component of funds separate.
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Editor: Mirjam Mäekivi, Andrew Whyte
Source: Postimees
