Contribution cut

  • 2011-03-23
  • From wire reports

TALLINN - Estonia and the other less wealthy euro area states bargained at the March 21 euro group finance ministers’ meeting for a more affordable contribution into the euro area permanent crisis management mechanism, which will be created in 2013, reports Aripaev Online. “Practically an ideal compromise was reached on the basis of Estonia’s proposal,” said Estonian Finance Minister Jurgen Ligi after the meeting, adding that this is “The best we could have.”

An exception was made for countries whose GDP is below 75 percent of the eurozone average, said Ligi.
According to the compromise, the share of less wealthy states will now be calculated so that 25 percent of the total sum will be calculated on the basis of the European Central Bank model and 75 percent only on the basis of GDP. “This is practically what we proposed,” said Ligi. The exception is in force for up to 12 years.

The final result means that Estonia’s share in the 700 billion euros crisis fund will form around 9 percent of Estonia’s GDP (1.3 billion euros). According to initial plans, when the so-called European Central Bank model, or number of member states population and GDP, were the basis, Estonia’s share would have been 12.6 percent of GDP. “We have to stress that the 9 percent is as of now,” said Ligi referring to the fact that many issues are still undecided before the EU heads of government summit. Ligi said that real money will have to be paid to the fund by the middle of 2013. Estonia’s share in the real 80 billion euros that will be paid is 0.18 percent, or 144 million euros.