In his political statement in connection with the plan to restart the European Union economy, Prime Minister Jüri Ratas noted that the coronavirus had had a very serious impact on the functioning and prospects of the economy which had put many countries, sectors, businesses and people into a difficult situation. This has brought about the worst economic downturn in the history of the European Union which may turn out to be much deeper than the one seen during the crisis ten years ago.
In the estimation of the European Commission, the economic downturn will be 7.4 per cent in the European Union this year. Should the virus return in the autumn and bring about restrictive measures again, the downturn may amount to 16 per cent. As for Estonia, the Commission estimates a downturn of 6.9 per cent which remains below the countries’ average.
“In the estimation of the Bank of Estonia, our economy is the most affected by four factors currently, which are the following: a decrease in foreign demand and tourism, the restrictions in place, uncertainty about future, and national assistance measures,” Ratas said. He explained that, according to the bank’s latest estimation, this year the Estonian economy may decline by 10 per cent in comparison to the last year, and next year, when exiting the low point of the crisis, growth may temporarily amount to 8.5 per cent. All forecasts are of course highly uncertain at the moment which is due to the prevailing unpredictability and a potential new wave of the virus.
In his opinion, it is certain that the recovery is going to be slow. For us, this is of course affected by the external environment, the situation of our major trading partners in our neighbouring region and the European Union. The European economy is in its turn strongly affected by the global economy.
The goal of the short and long-term view of exiting from the crisis will indeed have to be to prevent the health crisis from becoming a longer-term economic crisis. Many sectors experienced a steep decline already at the beginning of the crisis while others are experiencing its impact with a delay. This is the context we must take into account and respond to.
In view of these circumstances, the European Commission has presented a proposal to support the restart of the European economy. “The Government is ready to participate in a one-off and temporally limited implementation of support measures which would total 750 billion euro according to the proposal of the Commission. Of this, 500 billion is planned for subsidies and 250 billion is planned for loan opportunities for countries,” Ratas said. He explained that, as a result of that, the share allocated to Estonia would increase by 3.3 billion euro in the following European Union budget period, 1.85 billion of which would account for subsidies and the rest would account for a loan on favourable terms. This is more than half of the amount that we have at our disposal in the current budget period.
“The final details will of course be clarified in the forthcoming discussions, but unanimous support of all the member states of the Union will be needed to launch the plan, and the European Parliament will also have to give its consent to it,” Ratas said.
In Prime Minister’s words, the legal aspects of the economic relaunch plan had also been analysed. “As a result of that, we found that the plan and the own resources decision of the European Union were in conformity with the founding treaties of the Union. Article 122 of the Treaty on the Functioning of the European Union which is the basis for the establishment of the restart plan allows for the implementation of temporary and exceptional measures at Union level in order to help member states to restart their economies after the coronavirus crisis,” Ratas said.
In Prime Minister’s words, upon the taking of the loan, adherence to the rule of a balance between the revenue and expenditure of the European Union budget will be ensured. Also, every member state will repay its loan obligation according to its share in the contributions to the Union budget and will not assume obligations of other countries. There will certainly be an interest in the funding offered on the market, and the loan will be favourable.
“This proposal will not change the essence of the European Union and will involve no new competences. Rather, the plan can be treated as a supplementary budget presented to supplement the funds of the Union’s long-term budget. The creation of new or harmonised European Union taxes, or the establishment of own resources, that is, budget revenue, has also been seen as one solution to fund it. This would be a political choice, but the Estonian Government does not support the establishment of new joint taxes, or changes to the voting procedure, and it considers the current agreements a good compromise,” Ratas noted.
Prime Minister said that the European Union’s long-term budget and the economic relaunch plan that were under discussion would help keep the focus on the future and the jointly agreed political priorities. Besides competitiveness, this also includes the transformation of the digital and green transition into a new economic growth strategy. These investments and reforms will be instrumental for the future economic growth. If growth is low, the loan burden also decreases more slowly. Investments, including the ones that we will implement everywhere in Europe with the help of the restart plan, can be viewed as an opportunity to reduce loan burdens more vigorously with the help of faster economic growth in the near future.
Ratas stressed that we wished to know as accurately as possible in advance what costs this would involve for the state budget in the future. According to the current proposal and the current calculations, Estonia’s share in the repayment of the 750-billion-euro loan of the European Union should total around a billion euro over the years 2028–2058. This means around 35 million euro a year.
In Ratas’s words, of course, this will only be clarified in the course of the negotiations that will start already this Friday.
During the debate, Kaja Kallas (Reform Party), Anneli Ott (Centre Party), Indrek Saar (Social Democratic Party), Siim Pohlak (Estonian Conservative People’s Party) and Helir-Valdor Seeder (Isamaa) took the floor.
The Riigikogu concluded the first reading of the draft Resolution concerning a European instrument for temporary support
Under the Draft Resolution of the Riigikogu “The Granting of a State Guarantee under Article 11 of the Council Regulation (EU) 2020/672 on the Establishment of a European Instrument for Temporary Support to Mitigate Unemployment Risks in an Emergency (SURE) following the COVID-19 Outbreak” (210 OE), initiated by the Government, the Riigikogu will grant the European Commission a state guarantee in an amount of 48 716 500 euro on the basis of Article 11 of the European Council Regulation on the establishment of a European instrument for temporary support to mitigate unemployment risks in an emergency (SURE) following the COVID-19 outbreak.
The guarantee agreement provides for the maximum amount of the financial assistance to be given for a guarantee, the conditions for calling on the guarantee, the reporting, the duration of the guarantee, and the connection of the agreement with the Council Regulation. The Regulation sets out the aim of the creation and the use of the instrument, the organisation of the guarantees from the member states, the duration of the validity of the guarantee, and the reporting. Articles 11 and 12 of the Regulation provide for the giving of the guarantee and the availability of the instrument. According to these provisions, the guarantee from the member states is expected to be 25% of the total amount of the instrument, that is, 25 billion euro. The guarantee will be divided on the basis of the shares of the gross national incomes of the member states in the gross national income of the EU. Estonia’s share in the guarantee is 0.194866%, and the divisions and the guarantee amounts are set out in the guarantee agreement.
The implementation of the Resolution will involve no direct immediate obligations for the Republic of Estonia. Obligations will arise if the guarantee is called on and Estonia has to pay the Commission the amounts requested under a guarantee demand or additional demand. At the same time, the Commission will be obligated to reimburse the member states the amounts paid under a guarantee demand or additional demand after the recipient of the loan will have paid the repayments or the countries who do not participate in the guarantee demand will have met the relevant claims.
Jürgen Ligi (Reform Party) took the floor during the debate.
The Riigikogu passed an Act and a Resolution
The Riigikogu passed the Act on Amendments to the Plant Protection Act, the Organic Farming Act, the State Fees Act and the Plant Propagation and Plant Variety Rights Act (142 SE), initiated by the Government. It brings the Acts into conformity with the EU Plant Health Regulation and the Regulation regulating the carrying out of official controls, which are applied from 14 December 2019. For that, several provisions of the Plant Protection Act, the Organic Farming Act, the State Fees Act and the Plant Propagation and Plant Variety Rights Act are updated or repealed. Besides that, the Plant Protection Act is amended due to the amendments to the relevant EU directive.
A significant amendment to the Plant Protection Act is the extension of the obligation to submit a notice of economic activities to almost all operators engaged in the sale of planting material. The requirement of activity licence is also extended to the operators who, for example, wish to engage in wooden packing material, and to operators who wish to issue plant passports.
The principles of financing follow-up plant health checks are changed. The state fees of the plant health field have also been updated to cover the costs of official controls.
In the Organic Farming Act, the general bases for carrying out official controls, and the requirements for sampling and analysis are provided. Pursuant to an amendment, the authorisations for placing imported organic products on the market will no longer be issued because the relevant EU import system has changed. The state fees for supervisory acts on organic farming are also updated in order to compensate the increase of the supervisory expenses due to the rapid development of the organic farming sector.
91 members of the Riigikogu voted for the passage of the Act.
The Riigikogu approved the Resolution of the Riigikogu “Appointment of Members of the Supervisory Board of Eesti Pank” (209 OE), submitted by the Finance Committee. 91 members of the Riigikogu voted for the passage of the Resolution.
The proposal to appoint the members of the Supervisory Board was occasioned by the fact that the mandate of the earlier members of the Supervisory Board of the Bank of Estonia has expired. Under the law, the members of the Supervisory Board of the Bank of Estonia are appointed by the Riigikogu at the proposal of the Finance Committee.
The factions of the Riigikogu proposed to appoint Jaanus Karilaid (Centre Party), Ivari Padar (Social Democratic Party), Sven Sester (Isamaa), Andres Sutt (Reform Party) and Jaak Valge (Estonian Conservative People’s Party) as members of the Supervisory Board of the Bank of Estonia. The Chairman of the Supervisory Board of the Bank of Estonia proposed to appoint specialists in the field Kaie Kerem, Enn Listra, Rein Minka and Urmas Varblane as members of the Supervisory Board.
Under the Bank of Estonia (Eesti Pank) Act, members of the Supervisory Board must be Estonian citizens who hold a higher education qualification and possess the knowledge and experience required to participate in the work of the Board and in relation to whom the grounds provided for in the Act are not applicable. This means that no judgment of conviction rendered in a criminal case has entered into effect in respect of the incumbent holder of the office, and no bankruptcy order, decision disqualifying the incumbent holder of the office from holding a directorship or other position of business responsibility or decision that is imposed under a statute and that disqualifies such a holder from tradership has entered into effect. Under the Bank of Estonia (Eesti Pank) Act, a member of the Supervisory Board must not be an employee of any asset management company, investment fund, investment company, credit institution, insurance company or other entity subject to financial supervision, or be a member of a governing body of any such entity.
Anti Poolamets (Estonian Conservative People’s Party Faction) took the floor during the debate.
The Riigikogu concluded the second reading of five Bills
The Riigikogu had deliberated the Bill on Amendments to the Rescue Act and the Weapons Act (128 UA), initiated by the Government, again on 21 May 2020 and had decided not to pass the Act again without amendments. The Riigikogu had considered it necessary to amend the Act, and therefore the proceedings on the Bill had been relaunched from the stage of the conclusion of the first reading,
The Rescue Act will be amended by adding provisions that regulate how the processing of the personal data of supposed victims is organised upon the provision of the crisis information service. In the course of the provision of the crisis information service, the personal data of persons who call the Emergency Response Centre (callers), as well as the personal data of supposed victims of crisis situations will be processed once the availability of the relevant queries will have been decided. The specific elements of the data to be processed will be regulated by the statutes of the database for processing emergency notifications (the name and personal identification code or date of birth of both the caller and the supposed victim, their connection to each other, as well as the caller’s telephone number).
A decision to provide information about supposed victims of a crisis situation can be made only by four authorities within their competence: the Health Board, the Rescue Board, the Police and Border Guard Board, and the Internal Security Service. When making a relevant decision, it will have to be assessed whether it is proportionate to process data upon the provision of the crisis information service in the event of the exceptional event that necessitates the issue of the data, and whether other notification channels are not sufficiently efficient for that.
The Bill expressly establishes the extent of the processing of the data that the database for processing emergency notifications requests from the health information system, and the restriction that the health data of supposed victims is not to be processed. It also provides that everyone has the right to prohibit (via the patient portal) the issue of data about themselves from the health information system upon the provision of the crisis information service.
During the debate, Toomas Kivimägi (Reform Party), Jevgeni Ossinovski (Social Democratic Party) and Taavi Rõivas (Reform Party) took the floor.
The Estonian Reform Party Faction and the Social Democratic Party Faction moved to suspend the second reading of the Bill. The result of voting: 40 votes in favour and 49 against. The motion was not supported. The second reading of the Bill was concluded.
The Bill on Amendments to the Building Code and Other Acts (173 SE), initiated by the Government. Three major amendments concern the requirements for the long-term renovation strategy for residential and non-residential buildings and the support measures, the installation of electric car charging infrastructure, and the assessment of the energy efficiency of existing technical systems and the energy efficiency of the systems. The requirements transposed from the EU directive will contribute to achieving the end goals of the directive. The relevant EU directive has been drafted as a part of the European Commission’s Clean Energy Package which focuses on energy efficiency, renewable energy and a fair energy price for consumers. The European Union has committed to reduce greenhouse gas emissions further by at least 40 per cent by 2030 as compared with 1990. The European Union seeks to increase the proportion of renewable energy consumed, energy security, competitiveness and sustainability. The use of the existing building stock is responsible for 40 per cent of the final energy consumption and 36 per cent of the greenhouse gas emissions in the European Union. With these indicators, the building stock makes up the largest share of the European Union’s energy demand. In Estonia, the relevant indicators are even higher, because buildings account for as much as 50 per cent of final energy consumption in Estonia. In view of the great impact of buildings on final energy consumption, it is extremely important to improve the energy performance of buildings.
According to the directive, in the future, the requirements for technical systems will also apply to local renewable energy systems, that is, systems producing energy. The Act provides for the requirement that, when a new building is erected, its heating system will be equipped with self-regulating devices where technically feasible and economically justified. The requirements will apply to new buildings which will have to meet the minimum energy performance requirements.
During the second reading, a direct reference to a block exemption regulation reiterating that the state aid support scheme has been legalised and is covered by a block exemption was included in the Bill.
Under the Bill on Amendments to the Government of the Republic Act (187 SE), initiated by the Government, the field of earth’s crust resources will be included in the description of the area of government of the Ministry of Economic Affairs and Communications, and geological mapping and the ensuring of national geological competence will also be defined as its activities.
The field will cover the main activities of the Geological Survey of Estonia, which is administered by the Ministry of Economic Affairs and Communications, as well as the existing posts in the Ministry that are in charge of coordinating these activities. Under the current Act, the issues relating to the activities related to the earth’s crust fall within the area of government of the Ministry of the Environment. The task of the area of government of the Ministry of Economic Affairs and Communications is to forecast the mineral resource need, to assess the socio-economic impacts related to mineral resources, to coordinate the research and development activities necessary for the use and development of the economic potential of the earth’s crust, to coordinate and finance the earth’s crust research, and to conduct and fund geological mapping. The area of government of the Ministry of the Environment includes strategic planning (resource efficiency, pollution charges, reduction of waste generation), and the grant of permits for geological investigation, geological exploration permits and permits for extracting mineral resources, and other approvals and permits regarding the earth’s crust and the use and protection of mineral resources.
Under the Bill on Amendments to the Fiscal Marking of Liquid Fuel Act and Amendments to the Taxation Act in connection with that (203 SE), initiated by the Government, oil shale mining undertakings will be permitted to temporarily use diesel fuel for specific purposes on the territories of oil shale mines and open cast mines, in open cast mine technology and equipment, including in mining machinery, and the machinery used for transporting oil shale and ash. It will not be permitted to use fuel marked with a fiscal marker in transport on public roads. It will be possible to use diesel fuel marked with a fiscal marker in the period from 1 July 2020 to 30 April 2022.
Under the current Act, in the period from 1 May 2020 to 30 April 2022, the rate of excise duty on diesel fuel is 372 euro, and the rate of excise duty on diesel fuel marked with a fiscal marker is 100 euro per 1000 litres. Starting from 1 May 2022, the rate of excise duty on diesel fuel will be 493 euro, and the rate of excise duty on diesel fuel marked with a fiscal marker will be 133 euro per 1000 litres.
The Bill on Amendments to the Environmental Charges Act (204 SE), initiated by the Government, provides for a reduction in the expenses of oil shale mining enterprises, allowing them to temporarily pay a lower pollution charge upon dumping oil shale fly ash and oil shale bottom ash. The purpose of the amendment of the Act is to provide that, in connection with the crisis of the SARS-CoV-2 coronavirus that causes the COVID-19 disease, by way of exception, a pollution charge rate of 1.31 euro per ton, instead of the current 2.98 euro, will be applied to oil shale fly ash and oil shale bottom ash in 2020.
During the debate, Jevgeni Ossinovski (Social Democratic Party) and Heiki Kranich (Reform Party) took the floor.
The Social Democratic Party Faction moved to suspend the second reading of the Bill. The result of voting: 39 votes in favour and 47 against. The motion was not supported. The second reading of the Bill was concluded.
The Riigikogu concluded the first reading of four other Bills
The Bill on Amendments to the Alcohol, Tobacco, Fuel and Electricity Excise Duty Act (207 SE), initiated by the Faction Isamaa, the Estonian Conservative People’s Party Faction and the Estonian Centre Party Faction, provides for a suspension of the collection of the excise duty on tobacco liquid with the aim of curbing border trade and the black market. The amendments are planned to enter into force on 1 December 2020. The suspension of the collection of the excise duty will give undertakings an opportunity to reduce the price of tobacco liquid and thereby to create a stimulus for users to acquire products from Estonian places of sale instead of acquiring them from border trade or the black market.
With the Bill on Amendments to the Traffic Act (191 SE), initiated by the Government, in the interests of the safety of the use of electric scooters and other light electric vehicles and the safety of road users, the relevant rules of the road and the requirements for the use of such vehicles will be established.
A new category of vehicles will be implemented, personal transporter, which covers various vehicles intended for carrying one person and powered by electricity, for example, electric kick scooters, electric skateboards, self-balancing transporters and other similar vehicles without seating.
The Bill provides that personal transporters will be permitted to drive in particular in the environment intended for pedestrians and cyclists, and in exceptional cases on the carriageway. The requirements for crossing the carriageway and the obligations to give way, and the obligations of the driver of personal transporter in ensuring safety will also be regulated. The maximum speed for personal transporter will be established at 25 km/h, and in close proximity to pedestrians, it will have to drive at a speed not endangering pedestrians.
In order to ride a personal transporter on the carriageway, 10–15 year old drivers of personal transporter will be required to have the right to ride a bicycle, and drivers aged under 16 will have to wear a fastened helmet when driving on a road. Also, requirements for the power of personal transporters and for the use of reflectors and lights will be established, the maximum permitted width of personal transporters and the requirements for stopping and parking will be provided for, and the fine rates for the violation of traffic regulations will be provided for.
The requirements concerning cyclists and drivers of mini mopeds and mopeds, in particular the issues relating to their location on the road and their obligation to give way will be additionally specified.
The Railways Bill (201 SE), initiated by the Government, will organise the current Railways Act. Besides the changing of the text and structure of the current Act, the Railways Act will be amended by including provisions arising from directives, and, to a lesser extent, by specification of domestic provisions.
The Railways Act in force since 2003 has been amended for more than 30 times since it was adopted, which has made the text of the Act difficult to read, and therefore it is reasonable to issue a new consolidated text of the Act. The Bill provides for a reduction in the state fee if an application for an act in the railway traffic register is submitted through the electronic service information system of the Consumer Protection and Technical Regulatory Authority. At the same time, the Act is also amended by including additional fees for example for reviewing applications for changes to the operating licences for the technical maintenance and repair of railway vehicles and the construction of railway vehicles.
The EU directives transposed by the Bill are legal acts of the technical pillar of the Fourth Railway Package which aims to complete the creation of a single European railway market. The goal of this package is to revitalise the rail sector and make it more competitive vis-à-vis other modes of transport. The technical pillar is designed to boost the competitiveness of the railway sector by significantly reducing costs and administrative burden for railway undertakings wishing to operate across Europe. For that, it will be possible to apply for licences through the EU Agency for Railways in the future.
The Bill on Amendments to the Energy Sector Organisation Act and the Natural Gas Act (202 SE), initiated by the Government, will obligate the state to improve energy efficiency so as to aim to decrease energy consumption regardless of levels of economic growth.
The Bill will transpose new obligations arising from the relevant EU directive that will help achieve the EU’s long-term targets in the reduction of energy use. The directive provides for progress towards the Energy Union, under which energy efficiency is to be treated as an energy source in its own right.
The Bill will specify that the national energy efficiency target will be set at Government level together with policy measures supporting it and the energy efficiency obligation distribution plan. It is intended to regulate the metering of the consumption of heating, cooling and domestic hot water by final customers in buildings, and the billing relating thereto. The energy supplier will have to install a general meter, but the installation of apartment-based final users’ meters in multi-apartment buildings is necessary where this is cost-effective and technically feasible. Starting from 25 October 2020, final users will have to be given extensive comparative information upon billing with the aim that consumers will be able to change their behaviour.
The Riigikogu heard the reply to an interpellation
Prime Minister Jüri Ratas replied to the interpellation concerning the situation of the labour market (No 34).
The reply to the interpellation concerning the monitoring of the budget expenditure (No. 35) submitted to Prime Minister Jüri Ratas was adjourned due to the end of the working hours of Monday’s sitting. It will continue at Tuesday’s sitting. The reply to the interpellation concerning the Road Management Plan for 2020–2030 (No. 25) by the Minister of Economic Affairs and Infrastructure Taavi Aas that had been scheduled for Monday was also postponed to the agenda for Tuesday’s sitting.
Verbatim record of the sitting (in Estonian):
The sitting ended on 16 June at 00.01 a.m.
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