The European Union Structural Funds 2014-2020

Since Estonia became a member of the European Union in 2004, thousands of projects all over Estonia have been implemented with the support allocated to the country. 

The aim of the supports and subsidies is to harmonise the development of all the member states and enhance the competitiveness as the European Union as an integrated economic area all over the world. In other words, the success of the member states contributes to the general success of the European Union.

Financing available from the Structural Funds or the European financing are allocated in Estonia via three funds: European Regional Development Fund, European Social Fund and Cohesion Fund. 

In 2014-2020 budget period, in total, 3.5 billion euros will be channelled to Estonia from the EU Structural Funds; the administrative area of the Ministry of Economic Affairs and Communications will be responsible for the use of 1.3 billion euros, spent on transport, information society, economic development and energy sectors.

Source: Estonian Ministry of Economic Affairs and Communications

Government plans to nominate ex-PM as candidate for European commissioner

At May 29, 2014 Cabinet meeting, members approved Prime Minister Taavi Rõivas’s plan to nominate Estonia’s most popular politician as a candidate for European commissioner.

Andrus Ansip, just elected to the European Parliment with the largest number of votes received during Sunday’s election, told ETV that he was geared toward dealing with finances, energy and regional affairs – the fields where Estonia gets most of its EU funding – if he was selected for the executive post.

Read more from ERR

Enterprise Estonia may reclaim funding for Kultuurikatel

Estonian state-owned business support agency Enterprise Estonia suspects that Tallinn Creative Hub Kultuurikatel may have forged documentation in applying for renovation funding and has not entered into contracts which have stopped works with the project, writes Eesti Päevaleht.

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Without EU membership, Estonia would be 20% poorer – survey

Estonia, Latvia and Poland are the three countries that have benefited most from accession to the EU, according to a new survey by economists Nauro Campos, Fabrizio Coricelli and Luigi Moretti.

The survey showed that Estonia’s real GDP per capita in a ten-year period between 1998 and 2008 was 20% higher than the comparison group of countries that did not join EU.

Read more in BBN

Estonia’s labor costs among the lowest in EU

Average labor costs in Estonia were 9 euros per person per hour in 2013, up from 8.4 euros in 2012, according to Statistics Estonia.

In member states of the European Union a more than tenfold difference was recorded in hourly labor costs last year, from 3.7 euros in Bulgaria to 40.1 euros in Sweden.

Read more from BBN

Estonia’s government deficit among lowest in EU

The general government deficit of Estonia in 2013, measuring 2 percent of GDP, was lower than in any other EU member state save for Luxembourg and Germany, which boasted a surplus of 0.1 and 0 percent of GDP.

Read more from BBN

New conference centre may become part of Tallinn Airport

The new multifunctional conference centre that the state wants to complete by 2018 when Estonia holds EU Presidency could be located in Ülemiste City and be made part of Tallinn Airport which is close by, writes Eesti Päevaleht.

Read more from BBN

Ansip replaces Kaja Kallas as Europarliament’s No. 1 candidate

The general convention of the Reform Party decided over the weekend that the party’s Europarliament candidate list will be topped by former Prime Minister Andrus Ansip, writes Eesti Päevaleht.

In the initial list of candidates that was submitted to the convention on February 26 the list was topped by MP Kaja Kallas, daughter of European Commissioner Siim Kallas.

Read more from BBN

Euro area countries need to react flexibly to economic changes

Governor of Eesti Pank Ardo Hansson said on Saturday at the high-level Ambrosetti Financial Markets Workshop in Italy that the experience of the euro area shows that countries in a monetary union need to have a responsible economic policy and should be ready to react flexibly to economic changes.

Mr Hansson used his presentation to compare the advantages and disadvantages of a sharp adjustment for countries suffering an economic crisis.

He said that one advantage of a sharp adjustment is that the rapid reaction of economic policy makers means there is a shorter period of high uncertainty weighing on economic activity, especially on investment decisions. Another advantage is that a rapid adjustment frees up resources for new businesses and activities. Mr Hansson emphasised that a sharp adjustment can help avoid reform fatigue in a society and prevents debts from building up too far in both the public and private sectors.

At the same time, economic policy makers need to be careful that the speed of rapid changes does not create problems by forcing viable firms out of business. It is also important for governments to explain clearly to society why the changes are needed and what effect they will have. He showed a comparison of Estonia’s adjustment during the economic crisis with the reactions of four other euro area countries, namely Greece, Ireland, Spain and Portugal. The comparison makes it clear that the faster adjustment in Estonia helped the country exit the crisis more successfully in terms of economic growth, employment, fiscal balance and debt.

The relatively rapid long-term growth in the Estonian economy and its ability to adjust have been based on a strong fiscal policy, a flexible labour market and relatively low debt levels, particularly in the public sector, explained Mr Hansson. The ability of the Estonian economy to escape from difficulties was aided by well-capitalised banks, consistent structural reforms and the desire to adapt economic policy quickly to changes in the economy. Unlike Estonia, several countries in the euro area were hindered in their reaction to the crisis by an excessively large financial sector.

Mr Hansson said that Estonia’s experience in the economic boom showed that a strong external anchor in the form of a credible fixed exchange rate arrangement might lead to policy complacency. The experience of the euro area during the economic crisis has proved that the economic policy of countries in a monetary union needs to be responsible and ready to react flexibly to economic changes.

The Ambrosetti Financial Markets Workshop on Friday and Saturday in Cernobbio, Italy, was attended by leading decision-makers from the world of financial and monetary policy. Ardo Hansson gave a presentation in the Saturday morning session on the Agenda for Europe.

For more information on the conference, see http://www.ambrosetti.eu/en/news/2014/financial-markets-workshop

See the presentation here

Source: Bank of Estonia

Cabinet divides €6 billion EU funds

The government agreed on Feb 25, 2014 how to spend the 5.9 billion euros of EU funds the nation is set to receive during the 2014 to 2020 budget period.

“The (EU) budget negotiations were very successful for Estonia and the whole of Europe. Estonia will receive 5.9 billion euros, while contributing 1.4 billion euros,” Estonian Prime Minister Andrus Ansip said at a press conference.

Ansip said that in addition to the 5.9 billion euros, the EU will also subsidize the Rail Baltic project, which will receive one billion euros, and a prospective high-voltage link with Latvia.

Compared to the previous 7-year budget period of 2007 to 2013, Estonia will receive 1.3 billion euros more.

Rural development will see its budget increase slightly from 726 to 766 million euros, while funds for agricultural subsidies will double from 503 to 1,007 million euros. The Social Fund will increase by 198 million euros to 588 million.

The Regional Development Fund will increase by only 13 million to 1,873 million euros, while the Cohesion Fund will decrease to 1,073 million from 1,150 million euros of the previous period.

Another 629 million euros will be available for other projects.

The budget will have to be approved by the European Commission.

Source: Estonian Review / ERR

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