Estonia Bank: Surplus not for railroads

  • 2006-09-27
  • Staff and wire reports
TALLINN - The Bank of Estonia has reigned in on the use of budgetary surplus funds for the repurchase of Eesti Raudtee (Estonian Railway).

"Extra funds should be used in a way that fosters the economy's stable development," said Andres Saarniit, an adviser at the bank's central policy department. "This means that the surplus should not just boost short-term domestic demand. The government should ensure a balanced budget policy in the long and short term."

If the talks bring results, money will have to be set apart in a supplementary budget for the acquisition of Baltic Rail Service's (BRS) 66 percent holding, Prime Minister Andrus Ansip said earlier.
"However, the repurchase of Eesti Raudtee and its possible price should not depend on whether the state can use the surplus of budget revenues for this purpose," Saarniit advised.

Janno Toots, a spokesman for the central bank said the railway's repurchase was a decision of economic policy. "It cannot be made simply when there is money left over," he said on Sept. 20.
The government decided in favor of earmarking funds for the repurchase of the railway in the Ministry of Economy and Communications budget. government spokesman Martin Jasko told the Baltic News Service on Sept. 26

The Estonian government on Sept. 26 approved the supplementary budget draft and sent the bill to parliament.The size of the supplementary budget for 2006 is 5.519 billion kroons (353 million euros).