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Comment by Prime Minister Jüri Ratas on the European Commission’s EU budget proposal 2021-2027

2. May 2018 - 19:49

Stenbock House, Tallinn, 2 May 2018 – “Estonia stands for a strong and stable European Union and its budget for 2021-2027 must support these aims, and be future oriented.


The EU budget, to which taxpayers of all Member States contribute, is meant to boost development and new initiatives. The most important is what we spend on: how investments affect the economy, whether they will create growth in the future, and whether the well-being of people and the security of the countries will increase.


It is important for Estonia to invest European funds in areas where they provide a significant added value to our development and connect us with Europe better than today. This way, our development will gradually become less bound up with European funds in the future and we can handle things on our own. Estonia must be economically self-sufficient in the future.


Therefore, Estonia has three larger objectives in the upcoming EU budget discussions:
1. building Rail Baltic and synchronizing electricity systems with Europe;
2. balancing the direct payments of the Common Agricultural Policy, i.e. fairer competition conditions for our farmers;
3. ensuring that structural support for regions is phased-out gradually as they converge.


I am glad to see that cross-border connectivity is clearly prioritized. Rail Baltic will allow transportation of goods from Northern Scandinavia to the Mediterranean countries and to the North Sea. It will also connect the Baltic countries to the ports of Rotterdam and Northern Germany.


In addition to infrastructure projects connecting different areas of Europe, Estonia also values new digital connections and services, such as the high-speed 5G Internet connection, supercomputers, digital identity, the e-invoicing system, etc. The European Commission proposes substantially increased funding for research and innovation.


Payments of the Common Agricultural Policy to Estonia from the EU budget have increased by more than 2.5 times over the years. While in 2004, 83 million euros were allocated to Estonian agriculture, 220 million euros were allocated in 2016. However, direct payments to the Baltics are among the lowest in the European Union. For example, in 2020, the EU’s average level of direct payments per hectare will be 242 euros. In Estonia, this sum is only 177 euros.


Estonia is a good example of how EU membership has significantly supported the development of the country. Since joining the EU, Estonia has been among those benefitting the most from the shared budget. Estonia is one of the fastest-growing areas in the EU. Our gross domestic product per capita, taking into consideration our purchasing power, has increased from 54 per cent of the EU average in 2004 to 75 per cent in 2017.


Rapid development means that the amount of European funds to Estonia will not remain at the current level. Although, during the next budget period, Estonia will still receive more than it contributes to the EU budget. However, it is selfish to think that the taxpayers of other countries and the EU will have to keep supporting our development. We understand that areas poorer than ours must benefit more from the shared budget and new major challenges such as migration, strengthening the external borders and defence cooperation need more resources.


Therefore, the EU budget should not decrease by more than the direct contribution of the United Kingdom after the Brexit. The larger the EU budget is, the better the possibilities for funding to reach our joint goals. Estonia is willing to increase our contribution to the EU budget.


Today, the European Commission presented their vision of the size and priorities of the EU budget 2021-2027. In late May and early June, proposals for the new terms and conditions of the funds will follow. Complex discussions with the Member States and the European Parliament will provide clarity on the priorities and conditions for the EU budget. The proposal that the European Commission made today will undoubtedly change somewhat during this time.


The amount of funds allocated to Estonia during the next budget period and the funds from which Estonian entrepreneurs, researchers, non-profit organisations, and state authorities can apply for support will hopefully be agreed upon next year.”