Estonia can't rely on EU subsidies and investments

TALLINN, (ETA) - Estonia can't rely on massive subsidies and investments on accession to the EU said Agu Remmelg, director of the Estonian Investments Agency said, according to business daily Aripaev.

According to Remmelg, the EU would probably allocate 1 billion ($100 million) to 3 billion kroons worth of support to Estonia annually, but Estonia would have to pay approximately 1 billion kroons to the union every year, while the expenses of meeting the EU's social and labor policy and environmental requirements would cost several billions more. All the expenses would mean a decline of investments, Remmelg warned. He explained that since all major investments in privatization and local markets would have been made by the time of accession, only investments in export-oriented and high-tech enterprises would remain.

Experts also point out that Estonia and the other new members can never expect as massive support from the structural funds as was allocated to Ireland.

Aripaev discussed also the costs of joining the EU for to various sectors. The expenses of the food industry would probably be the highest with an estimated four billion kroons. Fish processing firms are the best positioned at present with 21 firms out of 127 meeting the EU standards; nevertheless, the total expenses would be 1.3 billion in the sector.

Seven dairy firms out of 47 have also met the European standards, while only five bakery firms out of 194 are deemed adequate. None of the 225 meat processing firms meets the European requirements so far and specialists claim that only 7-8 can develop their facilities to the EU level. The rest, mainly small companies, would have to close down.

The situation in the chemical industry is also depressing as approximately a dozen main chemical products of the Estonian industry have not been included in European list of chemicals and their inclusion would cost two million kroons per product.

Expenses on environment would be especially high and Environment Ministry vicechancellor Allan Gromov admitted that the specialists have little idea about dealing with the oil shale ash mountains around Kohtla-Jarve. The problem should be solved by 2006.