Stenbock House, 19 June 2020 – Prime Minister Jüri Ratas discussed the economic recovery plan and the next multiannual budget proposed by the European Commission for the first time with his counterparts from EU Member States at the European Council video conference. The leaders of EU Member States will meet for negotiations in Brussels, in the middle of July.
According to Prime Minister Jüri Ratas, the goal of all member states is the same: to reach the best agreement about the next seven-year budget and economic recovery plan for the EU as quickly as possible. ‘I am glad that, in principle, we have the necessary support for the economic recovery plan. All that remains is to work out the details, so that we arrive at results as quickly as possible. A quick agreement is needed for kick-starting the economy’, said Prime Minister Ratas.
‘An emergency response is needed from the European Union to this unprecedented crisis, one that is on the same scale as the extent of the problems. The welfare of our people depends on the welfare of the European Union. In order for us to do well, Europe also has to do well. We have to avoid this health crisis turning into a long-term economic crisis’, said the Prime Minister.
According to Ratas, the investments made to stimulate the economy have to be forward-looking and support long-term economic growth. We believe that it is important that the European Commission’s economic recovery investments be directed into infrastructure, energy, and the digital economy’, said Ratas. ‘Estonia is ready to consider taking an exceptional one-time loan – one that is temporary and clearly time-bound – to fund the recovery plan through the EU budget’, said the Prime Minister.
When talking about the future long-term EU budget, Prime Minister Ratas noted that he appreciates the proposal of the European Commission to increase the funding of cross-border transport connections for connecting Europe, including Rail Baltica. ‘It is important for Estonia that this additional funding could be used for Rail Baltica at the current co-financing rate’, said the Prime Minister.
When speaking of the Common Agricultural Policy, Ratas emphasized the need to guarantee the farmers of the Baltic Republics equal competition conditions with the rest of the member states.
Ursula von der Leyen, President of the European Commission, and Charles Michel, President of the European Council, briefed the leaders of the EU countries about the state of the talks on the future relationship with the United Kingdom and the meeting that took place on Monday.
At the Council meeting, the leaders of the EU gave their approval for extending the economic sanctions against Russia for the next six months. The EU imposed economic restrictions on Russia in 2014 because of activity that is destabilising the situation in Ukraine.
According to the proposition of the European Commission, the total budget of the European Union’s economic recovery plan would be EUR 750 billion. EUR 500 billion of which would be distributed in grants and EUR 250 billion would be available in loans for member states. As a result, the sum allocated to Estonia would increase by EUR 3.3 billion during the next EU budget period. Grants would account for EUR 1.85 billion of this, and the rest would be a loan under favourable conditions.
The European Commission predicts that the economy of Estonia will decline by 6.9 percent, which is below the member state average. The latest assessment by Eesti Pank forecasts that Estonia’s economy might decline by 10 percent compared to the previous year and growth next year may reach 8.5 percent as a result of exiting the low point.