Euro changeover plan

On 1 September 2005 the Estonian Government approved the first draft of the National Changeover Plan. The plan has been supplemented and the fifth version is now available to the general public.

5th version see here: http://euro.eesti.ee/EU/Prod/Euroveeb/Main_Page/download/eplan5.pdf

Estonia records one of the biggest budgetary surpluses among EU Member States

On 23 October Eurostat published specified data concerning the government debt and the budgetary deficit of EU Member States for the year 2005. According to the Eurostat report, Estonia holds the third position after Denmark and Finland in terms of its budgetary surplus. The average budgetary deficit of the government sectors of 25 Member States accounts for 2.3 percent of the GDP and the average debt burden forms 63.2 of the GDP. In 2005, Estonia had the lowest government debt.Aivar Sõerd, the Minister of Finance, observed that the surplus was necessary for securing long-term economic and political sustainability, considering the rapid economic growth and the aging and decreasing population of the country. “Until now, Estonia has been highlighted as an EU Member State with a sustainable and strong financial position,” Sõerd added. In 2005 the average budgetary deficit decreased by 0.4 percentage points in the European Union when compared to 2004; the surplus of Estonia remained on the level of the year 2004.

Seven EU Member States recorded a government surplus ranging between 0.1 and 4 percent of the GDP. The government surplus of Estonia for 2005 accounted for 2.3 percent of the GDP, remaining short of that of Denmark (4.0% of the GDP) and Finland (2.7% of the GDP). Hungary recorded the biggest budgetary deficit (-7.8% of the GDP). In addition to Hungary, the following countries failed to meet the Maastricht criterion (i.e. their budgetary deficit increased 3% of the GDP): Portugal (-6.0%), Greece (-5.2%), Poland (-4.4%), Italy (-4.1%), the Czech Republic (-3.6%), Great Britain (-3.3%), Malta (-3.2%), Germany (-3.2%) and Slovakia (-3.1%).

It should be noted that some Member States classify the savings of the defined-contribution funded pension scheme within the government sector. That entitlement will end in spring 2007 upon the end of the corresponding transitional period. However, for the sake of comparability of the Member States’ budgetary positions, the savings of pension funds must be deducted from the balance of the government sector, as has been done in this Press Release.

Estimates concerning the balance of the Estonian government sector for 2000-2005 have been amended in the data of Eurostat when compared to previously published information as a result of an enhancement of the methodology applied, the introduction of better sources of information and a review of the GDP-related time-series data.

As a result of the decrease of Estonia’s government debt to 4.5 percent of the GDP last year, Estonia now has the lowest debt burden in the European Union. Luxembourg (6.0% of the GDP), Latvia (12.1%) and Lithuania (18.7%) also have a relatively low debt burden. According to the Maastricht criterion, the debt burden must not exceed 60 percent of the GDP. Ten countries failed to meet that criterion, with Greece (107.5% of the GDP), Italy (106.6%) and Belgium (93.2%) being the countries having the highest debt burdens.

The Statistical Office has published more detailed information about the government surplus and debt level in a statistical database on its website at http://www.stat.ee.

The Eurostat press release is available at http://epp.eurostat.ec.europa.eu/.
Source: Ministry of Finance

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