European Union Member States made a deal on the budget framework

Brussels, 17 December –– According to Prime Minister Andrus Ansip, making a budget deal is a major achievement for the European Union. The deal proves that the enlarged Union is able to take crucial decisions for the future.

According to Prime Minister Ansip, the deal settled a number of important issues and opened the way for new reforms. The Prime Minister stressed that the next important step for Estonia was to use wisely the funds allocated in the framework of European solidarity. Estonia will receive 360 euros or 5634 kroons per capita from the new budget per year. Over the next seven years, we will receive 52.45 billion euros.

“Europe needed a positive result and this was materialised thanks to our joint effort”, said the Prime Minister. “A strong and unified European Union serves Estonia’s interests in every way,” he added.

“The budget proposals became gradually more favourable for Estonia over the past few days and we consider the current solution to be fair as a whole. The budget shows that solidarity is still a priority in the European Union,” said Ansip.

The budget for 2007–2013 is 862.4 billion euros, or 13.5 trillion kroons. This constitutes 1.045% of the combined gross national income of the EU 25 Member States and 2 candidate states. The volume of the new states’ cohesion financial instruments increased substantially. In total, Estonia’s position improved by 2.45 billion kroons compared to the UK’s initial offer.

Today, Estonia receives 3.7 kroons for each kroon paid into the EU budget; in the new budget period, Estonia will receive about 5.5 kroons.

The British rebate was reduced by the deal. It will be cut by 10.5 billion euros over the seven years. It was agreed to review the major issues in the middle of the new budget period; this would also cover the Common Agricultural Policy and the British rebate.

The deal implies that we can continue our preparations for using the Structural Funds and other European Union programmes from 2007 at full pace. Many current programmes in various regions of Estonia, the young and the old, people from all walks of life are awaiting these funds. According to the Prime Minister, we are leaving the negotiations knowing that we will have enough funds to speed up the process of catching up with the old European Union Member States in terms of economy and social affairs. “We need to be wise using this money,” said Ansip.

Local governments can still receive EU funds for VAT payments under the projects. This means that even small local governments can afford to participate in European projects.

It will also be easier in the future to obtain public sector co-financing, as Estonia will have to add 15% of own funds to the European support payments instead of the former 20%. The support funds can now be used over four years instead of three.