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The President of Eesti Pank Ardo Hansson made a report to the Riigikogu in connection with presentation of the 2012 Annual Report of Eesti Pank. Hansson underlined the answering to the questions from the Members of the Riigikogu as a necessary part of parliamentary scrutiny over the independent and open central bank. He added that much effort had been made in the previous year for increasing the openness of Eesti Pank. “The conducting of the VEB fund audit was a very important process in view of this openness,” the speaker stressed, noting that openness also lies in attitudes and body language, the emphatic ability which cannot be pretended.

In his report, the President of Eesti Pank discussed mainly three issues: the situation of our economic policy in the eurozone, the activities of the central bank and the independence and efficiency of the central bank. In Hansson’s words, Eesti Pank had fulfilled its main function, which is to ensure price stability in the eurozone, also in the previous year. He believed that in a medium-term perspective it would be possible to keep inflation slightly below 2%. In the middle of the year, inflation had been ca 2.5; it had reached to 2% by the end of the year while now it is slightly less than 2%. “The Estonian economy has been developing in a very balanced way at present as compared with the ‘boom-time’ period with large current account deficits, budget deficits and imbalanced development of banks – all these things have changed. At present we have a small budget deficit and a small current account deficit. However, we have always emphasised that this balance is relatively fragile. Great risks are still looming in the world and it may change this way or that way so we have to be on our guard,” Hansson said.

When speaking of the activities of the bank, the President of the bank stated that, in the shaping of monetary policy and other decisions in Frankfurt, they had tried to be a constructive and influential partner, had increasingly voiced their opinion and had tried to help find better trans-European solutions. He also attached importance to counselling the Government in economic policy issues and informing the Estonian people and enterprises as to what may happen in the economy. “I think that our macro-analyses and analyses of financial stability, labour market and competitiveness have very high authority and we hope that they have a wider benefit,” Hansson stressed.

Hansson believed that the bank had been successful in its main tasks: “We have increased our credibility, our openness, our independence, our efficiency and, I think, also our effectiveness.”

Comments were presented by Members of the Riigikogu Aivar Sõerd, Kalev Kallo and Rannar Vassiljev.

The Chairman of the Management Board of the Financial Supervision Authority Raul Malmstein presented the 2012 Annual Report of the Financial Supervision Authority. He gave an overview of the activities of the Supervision Authority in the previous year but also introduced the tasks and challenges to be faced. Malmstein spoke of the intention to establish the Single Supervisory Mechanism at the European Central Bank which should be launched in summer 2014 that had been proposed at the European Council. In the speaker’s words, Swedbank and SEB who operate in Estonia and the Norwegian DNB who owns an affiliate bank in Estonia will also go under the Single Supervisory Mechanism. It is impossible to say yet what the division of work will be like between the European Central Bank’s banking supervision and the Financial Supervision Authority.

Malmstein also spoke about the work capacity of the Financial Supervision Authority, its contribution to the implementation of the SSM, and the situation and risks in the domestic market. He also touched upon the supervision of paying authorities and services supervision in connection with pension funds. Malmstein promised that the Financial Supervision Authority would continue efficient work in maintaining financial stability in the domestic market which would be done hand in hand with new tasks at the European level.

On the motion of the Social Affairs Committee, the second reading of the Bill on Amendments to the Act on Organisation of Local Government of Paldiski (382 SE), initiated by the Pro Patria and Res Publica Union Faction and the Estonian Reform Party Faction, was concluded. The aim of the Bill is to regulate the legal gap relating to the assets of Paldiski district of the city of Keila and Paldiski becoming an independent city. So far, the city of Keila has been the owner of the assets of Paldiski district, and Keila has also had to bear the obligations related to Paldiski district. The Bill provides for an opportunity to apply for a single aid from the state for servicing the debt obligations related to the facilities located in the area of the city of Keila which has become the administrative territory of the city of Paldiski. The Bill was sent to the third reading.

On the motion of the Social Affairs Committee, the first reading of the Bill on Amendments to § 20 of the Medicinal Products Act (400 SE), initiated by the same Committee, was concluded. The purpose of the Bill is to ensure consistent, uninterrupted and sufficient availability of medicinal products in Estonia at a price level which has been recognised as acceptable for Estonian health insurance. Another purpose of the Bill is to ensure storage of the most possibly adequate supply of a medicinal product or alternative medicinal product in Estonia in a situation where the emergence of the deficit of the medicinal product can be anticipated or has already occurred. The provisions that are added concern the export of medicinal products; the amendments grant the State Agency of Medicines the right to suspend the export of a medicinal product in the interests of public health. The Bill was sent to the second reading.

For more details, read the verbatim record of the sitting (in Estonian).

The Riigikogu Press Service