TALLINN — The Estonian government plans to borrow 13 billion krooni (€823 million) within next three years to keep its fiscal deficit within Maastricht criteria.
Although the Estonian national government criticized the Tallinn municipality for its plans to take a 357 million krooni (€22.8 million) loan, Minister of Finance Jürgen Ligi said at a press conference Thursday that the grand loan which will cover the budget deficit along with 4.7 billion krooni (€300.9 million) from the reserve fund. The loan will be disbursed over the upcoming three years, five billion krooni (€319.5 million) taken out in 2010.
Ligi said Estonia’s planned 2011 eurozone entry will not be affected, as the 2010 budget deficit is 2.6 percent and the Estonian government’s debt is one of the smallest in Europe.
The Maastricht criteria settles that the country’s total debt can reach up to 60 percent from gross domestic product, Estonia’s is only 4.8 percent from GDP.
“We need to cover the expenses with something, partly it will be covered by the loans and partly by reserves,” Piret Seeman, the Ministry of Finance press spokeswoman told Baltic Reports.