OREANDA-NEWS. April 30, 2009. Prime Minister Andrus Ansip said, on the Reporteritund programme on Vikerraadio, that the euro would be a bonus if we made the required cuts with the aim of also preserving the financial stability of the country in the longer term, reported the Official website valitsus.ee.

“We have reserves, but once the reserves run out, where do get the money from?” asked Prime Minister Ansip, in whose opinion the government is not acting just for the sake of the euro by cutting the budget and looking for sources of additional revenue. “The euro is a corollary phenomenon,” said the head of government, according to whom the Government must act if the difference between the expenses and revenue of the State is not to exceed three per cent.

Prime Minister Ansip cited the assessments of the Estonian economy by two international rating agencies, Standard & Poor’s and Moody’s, published in recent days. Both agencies rated the actions by the Estonian Government highly. “It is precisely through our very swift action that we have earned this. Countries like this are difficult to find in Europe,” the Prime Minister said.

First, to Estonia’s advantage is the government sector’s low debt burden, 4.8 per cent of our gross domestic product. The European Union average is 62 per cent of GDP. The second strength includes our considerable reserves accumulated during the good times. The third strength of the Estonian economy is considered by the rating agencies to be our banking system.

“The Government has not had to spend the taxpayers’ money in Estonia on rescuing the banks. There are not many countries like that in Europe,” Ansip said. The rating agencies find that the Estonian economy has held up better in the crisis than many other countries in the European Union.

The rating agencies and international financial institutions find that Estonia’s budget and tax policy has served us well. “To abandon the budget and tax policy that has served Estonia well is not right,” Ansip said.

Speaking of unemployment insurance payments, the head of government said that raising the tax rates to three per cent alone would not solve the problems of the Estonian Unemployment Insurance Fund. According to Ansip, the Fund has to be financially sustainable to also continue disbursing funds to the unemployed in the years to come.

“The reserves of the Unemployment Insurance Fund will melt like a chunk of ice in a hot skillet; by the end of the year, the money will be gone. What to make the payments from next year, that requires consideration,” Ansip said. “The social partners have agreed on the principal points of the Employment Contracts Act and must now also agree on the benefit cuts,” the Prime Minister said.

The programme also discussed the Teeme Ara brainstorming session, sport funding and European Parliament elections. The Prime Minister is featured on the Reporteritund programme on Vikerraadio every Friday.