TALLINN - On March 7, Prime Minister Andrus Ansip met in Prague with the leader of the Czech government, Jan Fischer, to talk about matters relating to the European Union, the economic situation and Estonia’s adoption of the euro in 2011. The discussions at the meeting centered primarily on Estonia’s adoption of the euro.
During the discussions the prime minister explained to his Czech colleague why it is so important for Estonia to join the euro area as soon as possible. “The euro increases confidence in Estonia’s economic environment,” he stressed. “The adoption of the euro will encourage foreign investors and it will foster Estonia’s foreign trade, which will on the whole benefit Estonia’s new economic rise.”
The Czech prime minister was interested in how Estonia has managed to keep the government sector deficit under 3 percent of GDP during the recession.
Ansip explained that reserves were collected during good times, and that remarkable budget cuts and structural reforms have allowed for Estonia’s finances to be kept under control during the recession. “In Estonia, we have made decisions regarding finances and social policies that have influenced everyone,” he said. “I personally have lost 20 percent of my salary, the public sector almost 15 percent; nearly everyone has contributed, so we can get through these difficult times,” the prime minister added. “Without the support of the people, we could not have made these difficult decisions.”
“At the same time I consider it important that in these tough times the government did not cut pensions, but increased them instead,” Ansip said. He added that this was the only possible solution in a situation where Estonia’s pensioners face a very high risk of poverty. “Instead of cutting the pensions, we found other areas for saving, with the most cuts having been made in the public sector,” he explained.
“Naturally, we made these difficult decisions in the name of Estonia’s sustainability, not because of the euro. The euro is a bonus, which will benefit Estonia’s new economic rise,” he added.
Czech Prime Minister Jan Fischer commended the Estonian government’s actions in fulfilling the Maastricht criteria and gave assurance that he supports Estonia’s adoption of the euro.
When speaking about the economic situation, both prime ministers stated that the financial crisis has not had a lot of influence on the banking sector in either country. “During the crisis both Estonia and the Czech Republic have benefited from the fact that taxpayers’ money was not used to bail out the banking sector,” Ansip said.
He also explained Estonia’s interest in becoming the host country for the EU’s new IT-agency. The IT-services of Estonia’s public sector and the ID-card were also among the topics discussed.