TALLINN – The Estonian government has endorsed the principles that the state bill base itself upon in the governance of the state's holdings in state companies and developing of relevant legislation.
"Defining the principles of participation policy is necessary for the thought-out governance of companies belonging to the state and sustainable and efficient management of the companies," Finance Minister Martin Helme said in a press release.
The general direction for the state is to have holdings only in businesses where that is necessary for a goal arising from public interest or due to another strategic consideration. Earning income through participation in business is not a goal in its own right for the state, but an additional goal accompanying acting in public interest.
In the future the state's participation policy will be updated regularly at least every five years.
Additionally, the principles endorsed by the government set out the possibility to establish for state companies strategic targets, sectoral targets and financial targets related the expectations of the owner. The expectations of the owner will be updated every three years, as part of which the need for maintaining the state's holding in the business will be assessed among other things.
To avoid state aid and undermining of the competition situation, comparability of the financial targets set for state businesses with the usual financial targets of a private investor has been set out as an important principle.
The Estonian state has holdings in 29 businesses, including in 24 businesses of which it is the sole owner and four businesses in which it is the majority owner. State invested companies have over seven billion euros in assets combined and they employ a workforce of 13,400 people. The total revenue of state invested companies in 2018 was 1.8 billion euros.