The Prime Minister Meets with IMF Delegation, 18.02.1999

PRESS RELEASE February 10, 1999

Prime Minister Meets with IMF Delegation.

Prime Minister Siimann met today at Toompea with the IMF delegation, led by Peter Keller. IMF and the Prime Minister discussed Estonia's macroeconomic situation, the possibilities of a new economic program, and the matter of terminating the annual economic consultations with IMF, conducted under article IV of IMF by-laws.

IMF representatives gave good marks to the international picture of Estonia's economic policies, but found that in the future the national budgets increases should be smaller than economic growth. IMF noted that expenditures in the national budget have increased and the rate of increase should be reduced.

Mart Siimann gave the IMF representatives an overview of Estonia's present economic situation and told them of the government's definite intention to transfer most of the money from the sale of Telekom to the stabilization fund. "I have spoken with the opposition politicians, and they are of the same opinion," Siimann added.

Mart Siimann said that the current government is ready to assist with the preparation of the new economic program, despite the fact that the next government will be signing it.

Regarding the negotiations under Article IV, the IMF executive council will deliberate that most likely on May 5.

IMF representatives commented on last year's bank mergers and said that the influx of foreign capital has strengthened banking in Estonia.

In the discussions, Siimann and Keller touched upon the report on Maapank. Keller said that the issuing of the report showed Estonia's desire to be transparent.

Peter Keller made special mention of the fact that Estonia's decision-makers have succeeded in leaving the stabilization fund untouched.

He emphasized that the reserve fund should be given legal basis. The Prime Minister stated that legislation to that effect is being prepared.

Given that this was, most likely, the last meeting between Siimann and the IMF delegation within the present government's context, Siimann expressed deep appreciation to the IMF delegation for their cooperation during the past two years which, in his opinion, has been exceptional.