The government decided to speed up the use of EU funds

19.04.2021 | 12:20

Stenbock House, 16 April 2021 – The government continued discussions on the preparation of the state budget strategy and the state budget and decided that the ministries have to accelerate the introduction of the outstanding balance of structural funds for the period 2014–2020.
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“We must overcome the economic downturn caused by the pandemic and at the same time move towards the balance of public finances,” said Prime Minister Kaja Kallas. “Faster utilisation of both the outstanding balance of the previous period and the new European Union funds is essential for the development of the Estonian economy and for raising people’s incomes.”

“The budget deficit will put limits on the use of tax money in the coming years, but at the same time, we will be able to invest a record amount of EU funds, all of which must be used for new growth and major changes,” said Minister of Finance Keit Pentus-Rosimannus. “Today, we critically reviewed the state of the structural funds budget. Hundreds of millions are still waiting to be used in Estonia.  By the end of the year, the situation must be significantly better.”

The implementation of projects financed from foreign supports for the period 2014–2020 will continue until the end of 2023. According to the European Commission’s accounts, Estonia was in fourth place among the European Union Member States in terms of payments at the end of March, with 63.1 per cent. However, efforts can be made to mobilise the supports more quickly and on a larger scale.

“In the field of the Minister of Economic Affairs and Infrastructure, important projects are waiting for disbursements and agreements, and we will do everything we can to accelerate them. As one of the focuses, payments will continue for the reconstruction works to increase the energy efficiency of apartment buildings in various parts of Estonia to contribute to the achievement of climate goals and reduce the heating costs of buildings by almost half,” said Minister of Economic Affairs and Infrastructure Taavi Aas.

For measures with support disbursements below 75% of the budget, other ministries must submit a detailed action plan to the Ministry of Finance by 6 May on accelerating disbursements and covering support commitments. In total, Estonia received more than 3.5 billion euros in structural funds in 2014–2020, of which 279.3 million are currently uncovered. This year’s goal is for 97% of the funds to be earmarked and at least 75% to be disbursed.

In addition, the government discussed possible reforms and austerity measures today that would help improve the general government budget position in the budget strategy 2022–2025. “The tightness of the state budget is a good motivator for being more efficient and finding cost-saving opportunities,” said Keit Pentus-Rosimannus.

The aim of the budget strategy is to set out activities and funding in the longer term based on the priorities of the government, future forecasts, and global trends. The budget strategy links the government’s major objectives, the ministries’ plans and activities, and their funding for the next four years.

In making its decisions, the government is guided by its priorities – a rapid exit from the COVID-19 pandemic, support for people’s mental and physical health, financial sustainability, education and innovation, a green economy, foreign policy activism, national defence, and the reduction of regional disparities.

The government will confirm the budget strategy and approve the state budget for 2022 no later than on 30 April. The government will discuss the draft state budget in autumn before submitting it to the Riigikogu.

Discussions on the budget strategy will continue next week.

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