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At today’s sitting of the Riigikogu, Governor of the Bank of Estonia Ardo Hansson made a report on the 2016 Annual Report of the Bank of Estonia. The Chairman of the Management Board of the Financial Supervision Authority Kilvar Kessler gave an overview of the 2016 Report of the Financial Supervision Authority.

Governor of the Bank of Estonia Ardo Hansson said that, as regarded Estonian economy, the year as a whole and the last quarter of the year had to be viewed separately when looking at the previous year. “According to the preliminary data, economic growth was only 1.6% in a year, which was unusually low,” he said. In Hansson’s words, the reasons for that lie more in certain branches and foreign markets than in problems with the economic structure. Hansson said that economic growth had accelerated in the second half of the year. “In the fourth quarter we already saw that growth was relatively fast, 2.7% in a year, and that growth was increasingly broad-based,” Hansson added.

Hansson pointed out that, for a long while, a controversial situation had prevailed where, on the one hand, economic growth indicators had been relatively weak, and on the other hand, labour market indicators had all been very strong. “When we looked at employment, salary growth, unemployment rate and the rate of vacancies, they all indicated that our labour market seemed to be overheated,” Hansson said.

“If the Government begins to additionally stimulate the economy through deficit, the labour market will become even more overheated, we will complicate the situation with finding employees for enterprises even further, and eventually we may harm the long-term economic growth of Estonia,” Hansson noted.

Regarding the work of the Bank of Estonia last year, Hansson pointed out that the securities settlement platform TARGET2-Securities would be launched this year and the Estonian Securities Depository would also accede to that in September this year. He added that the Bank of Estonia had continuously put into circulation renewed and more secure second series banknotes. Hansson said that a field meeting of the Governing Council of the European Central Bank was going to take place in Estonia in June. He also pointed out that the Bank of Estonia had its role in the European Union Council presidency where they would work together with the Ministry of Finance. He said that there was a lot of activity in the European direction.

“In the field of financial stability, our biggest work has been the development of a macro-financial supervision toolbox through which we can reduce the risk of a real estate lending boom and ensure that banks can withstand problems,” Hansson noted.

Jürgen Ligi from the Reform Party Faction, Andres Ammas from the Free Party Faction and Mihhail Stalnuhhin from the Centre Party Faction took the floor during the debate.

Chairman of the Management Board of the Financial Supervision Authority Kilvar Kessler told that Estonia had a strong financial sector which created good preconditions for economic growth. “We cannot speak of weak balances in the case of important financial intermediaries of Estonia. Our financial sector indicators, especially in banking, indicate much higher than average quality compared to the European average,” Kessler said.

Kessler said that the Financial Supervision Authority was continuing, including in cooperation with the European Central Bank, to maintain financial stability, requiring that financial intermediaries have sufficient capital buffers and develop transparent and functioning liquidity solutions. “In addition to that, we continue to take care that our financial intermediaries would be governed by honest people, the internal control systems would function better, and the sustainability of business would be well-considered and tested,” Kessler said.

“We are integrated with the euro area banking supervision system SSM and the crisis resolution system SRM. The European deposit insurance scheme EDIS is being prepared. I think that the Financial Supervision Authority is the Estonia institution that is the most widely and deeply integrated with European Union authorities. For foreign colleagues, on the one hand, it represents a sound conservative attitude in the financial market and, on the other hand, it is open to controlled innovation and technological progress,” Kessler noted.

Urmas Kruuse from the Reform Party Faction took the floor during the debate.

The Riigikogu passed an Act:

68 members of the Riigikogu voted in favour of the Act on Amendments to the Railways Act and the Public Transport Act (398 SE), initiated by the Economic Affairs Committee, and 6 were against.

The amendment of the Railways Act is due to the need to specify the transposing provisions of the Directive of the European Parliament and of the Council on the certification of train drivers operating locomotives and trains on the railway system in the Community, and the Directive of the European Parliament and of the Council establishing a single European railway area. The European Commission has drawn attention to the failure to transpose the provisions immediately. In essence, the amendments have no particular impact and do not presume changing of the current conduct. In the Public Transport Act, the relevant Regulation of the European Parliament and of the Council concerning the rights of passengers in bus and coach transport are implemented.

The Riigikogu passed a Resolution:

57 members of the Riigikogu voted in favour of the Resolution of the Riigikogu “Appointment of Members of the Estonian Public Broadcasting Council from among the Acknowledged Experts in the Field of Activity of the Estonian Public Broadcasting” (437 OE), submitted by the Cultural Affairs Committee. 11 were against and there were 5 abstentions.

On 6 May 2017, the authority of three acknowledged experts in this field of activity who are members of the Estonian Public Broadcasting Council – Mart Luik, Rain Tamm and Agu Uudelepp – will terminate. Pille Pruulmann-Vengerfeldt’s authority lasts until 5 May 2020. Under the Estonian Public Broadcasting Act, the Riigikogu has to appoint three new members to the Council. The Resolution provides for the appointment of new members from among experts to the Estonian Public Broadcasting Council: Paavo Nõgene, Rein Veidemann and Agu Uudelepp.

The Estonian Public Broadcasting Council consists of members of the Riigikogu and acknowledged experts in the field of activity of the Public Broadcasting. On the proposal of the Cultural Affairs Committee, the Riigikogu appoints one representative from each faction until the date of termination of the authority of the composition of the Riigikogu, and four experts from among the acknowledged experts in the field of activity of the Public Broadcasting whose authority continues for five years. Members of the Riigikogu Krista Aru (Estonian Free Party Faction), Martin Helme (Estonian Conservative People’s Party Faction), Kalvi Kõva (Social Democratic Party Faction), Viktoria Ladõnskaja (Pro Patria and Res Publica Union Faction), Heidy Purga (Estonian Reform Party Faction) and Marika Tuus-Laul (Estonian Centre Party Faction) are members of the Estonian Public Broadcasting Council.

Martin Helme from the Estonian Conservative People’s Party Faction took the floor during the debate.

Three Bills passed the second reading in the Riigikogu:

The aim of the Bill on Amendments to the Foreign Service Act and the Civil Service Act (324 SE), initiated by the Government, is to increase the flexibility of the regulation of the establishment of the rate for the representation allowance paid for a family member accompanying an official.

The Bill will eliminate from the Act the percentage rates for increasing the representation allowance of an official for an accompanying child and a non-working accompanying spouse, and will provide for the establishment thereof at the level of a Regulation of the Government of the Republic. At present, these percentages are also established by a Regulation of the Government. The amendment is in accordance with the general salary policy where salaries are no longer regulated by Acts, but at the level of Regulations.

The Bill on Amendments to the General Part of the Environmental Code Act and Amendments to Other Associated Acts (397 SE), initiated by the Government. The amendments are necessary for the establishment of the environmental decisions information system (KOTKAS) that would integrate into a single information system all applications relating to environmental permits, the proceedings on the permits, and the permits issued. This will simplify the issue of environmental permits, the monitoring relating to permits, and annual reporting, and will also simplify the maintenance, use and availability of data. Application for an environmental permit will become cheaper, higher-quality and faster.

The explanatory memorandum notes that, in the first stage in 2015–2017, the functionality of conducting proceedings on integrated permits will be created, and in the second stage in 2017–2019, sectoral environmental permits will be added, and five different information systems will be replaced. The Minister of the Environment will establish the database.

The new database will help reduce bureaucracy and the administrative burden in communicating with the state, particularly through pre-completed yearly reports, consolidation of data into one database, and information exchange through KOTKAS.

Member of the Environment Committee Terje Trei, who made a report on behalf of the Committee, said that the Committee had received 14 motions to amend from the Ministry of the Environment, and the Committee itself had decided to adjust the title of the Bill. She pointed out that the main amendments to the general part arose from the completion and implementation of new special parts, and the majority of the motions concerned the processing of environmental permit.

The Bill on Amendments to the Competition Act and Amendments to Other Associated Acts (386 SE), initiated by the Government, will transpose into Estonian law the directive concerning private enforcement of competition law. Among other things, the provisions regulate claims arising from agreements harming competition, decisions by associations of undertakings, or abuses of a dominant position. This concerns in particular cartel agreements and abuses of a monopoly position. The deadline for the transposition of the directive was 27 December 2016.

According to the Bill, every injured party will have the possibility to obtain full compensation for the harm which means compensation of actual loss, loss of profit and default interests. Under the current law, injured parties can be identified only by way of interpretation and, as a general rule, compensation for loss of profit cannot be claimed. The Bill will amend the beginning of the calculation of default interest of the relevant claims, and according to it, payment of default interest will be due from the time when the harm occurred until the time when compensation is paid. Under the current law, it is calculated as of the time when the obligee informed the obligor of the claim or filed an action to collect the money or a petition for application of expedited procedure in the matter of payment order. The Bill will provide that the limitation period for a claim arisen from the commission of a prohibited act is 5 years. Under the current law, the limitation period for a claim is 3 years. In addition to the transposition of the directive, the Bill will again give the Competition Board the right to exercise administrative supervision, that is, to issue precepts to local governments, state authorities or other persons performing administrative duties.

Two drafts passed the first reading in the Riigikogu:

The Draft Resolution of the Riigikogu “Approval of “The National Security Concept of Estonia”” (395 OE), submitted by the Government.

The aim and principles of the national security concept create a framework for the assessment of the security environment and the determining of the objectives necessary to ensure security. The aim of security policy derives from the Constitution. The aim is to ensure the independence and sovereignty of Estonia, the preservation of the nation and the state, territorial integrity, constitutional order and the security of the population. The principles are understood as positions that must serve as the basis in the achievement of the aim and that make up a whole leading to the best result. The scope of issues covered by security policy is changeable in time. Based on the broad security concept, the document focuses on the activities of the state in the spheres that can contribute towards creating and securing security. Similarly to the earlier document, here too the starting point is the implementation of security policy in observance of the fundamental rights and freedoms and protecting constitutional values. In comparison to the earlier document, the wording of the principles has been specified.

At Tuesday’s sitting, Prime Minister Jüri Ratas introduced to the Riigikogu the updated National Security Concept of Estonia which was approved by the Government on 16 February this year.

Chairman of the National Defence Committee Hannes Hanso gave a brief overview of the work of the National Defence Committee and the Foreign Affairs Committee relating to the national security concept at Tuesday’s sitting.

Ants Laaneots from the Reform Party Faction, Tiit Terik from the Centre Party Faction, Artur Talvik from the Free Party Faction and Marianne Mikko from the Social Democratic Party Faction participated in the debate at Tuesday’s sitting.

At today’s sitting, Mart Helme from the Estonian Conservative People’s Party Faction took the floor during the debate. He said that the faction approved the presentation of the subject and there were not many objections to the document. Helme noted that practical opportunities for the implementation and the practical implementation of the national security concept should be looked with a critical eye.

The Bill on Amendments to the Traffic Act (399 SE), initiated by members of the Riigikogu Erki Savisaar, Viktor Vassiljev, Raivo Põldaru, Arno Sild, Jaanus Marrandi, Aivar Kokk, Einar Vallbaum, Kalle Palling, Kristen Michal, Artur Talvik, Kalvi Kõva, Krista Aru, Liisa Oviir and Märt Sults, will establish the definition of at least partially automatically moving vehicles moving at low speed mainly on pavement, and the requirements for such vehicles in traffic Act.

The new term in the legal language, “self-driving robot”, that is used in the Bill, means a partially of fully automatic or remotely controlled vehicle that moves on wheels or other chassis in contact with the ground and uses sensors, cameras or other devices to obtain information about the surrounding environment and, using the information obtained, is capable of moving partially or fully without the immediate control of the driver, with a maximum design speed not exceeding 6 km/h. The Economic Affairs Committee was appointed as the lead committee.

The explanatory memorandum notes that the aim of the Bill is to contribute to the activities of innovative enterprises in Estonia. The “last-kilometre delivery of parcels”, be it home delivery of parcels arriving from a long distance, or shopping that has become an everyday habit for all of us, accounts for ca 20–40 per cent of the total cost of parcel delivery. The trend is towards the use of robots in this sector to reduce this cost. According to estimates, in ten years today, up to 80 per cent of that last stage of parcel delivery could be performed by robots.

The Riigikogu did not pass a Bill:

The Public Procurement Bill (204 SE), initiated by the Government, will increase the flexibility of the conduct of public procurements, reduce the costs of procurement procedure, and transpose three European Union directives.

The Bill provides for raising the thresholds for public procurements which will allow for simplified procurement procedures to be used more extensively. The Bill will also create preconditions for small and medium-sized enterprises to have better access to procurements, because it will restrict the right of the contracting authority or entity to require a large economic turnover for participation in a competition, and will obligate the contracting authority or entity to give additional reasons as to why they do not wish to divide up a large procurement.

On the basis of the proposals of stakeholders, the simplified procurement threshold will be raised from 20 000 euro to 30 000 euro in the case of supplies and services, and the public procurement threshold for works will be lowered from 300 000 euro to 150 000 euro. The amendments are necessary to ensure in the Estonian public procurement landscape a reasonable balance between the administrative and workload of persons and authorities participating in public procurement procedure, and the general principles of public procurement, particularly equal treatment, transparency and the exercise of control.

National thresholds for social and specific services will be provided for. According to the Bill, the contracting body will conduct a specific procedure for social and specific services in the case when the estimated value of the social and specific services is equal to or greater than 750 000 euro, which is the international threshold provided for in a directive. In the case of contracts for social and specific services with a value equal to or greater than 60 000 euro, according to the Bill, the contracting body will send a contract award notice after the conclusion of the contract.

The raising of the international threshold in the directive as compared to the current threshold (207 000 euro) is due to the fact that, because of the specificities of these services, they are of no or little cross-border interest. A similar logic cannot however be applied in view of the national regulation as competition is present in these sectors (particularly in the case of specific services) nationally. It is ungrounded to exclude from regulation nearly 80 per cent of public procurements in these sectors. The establishment of national thresholds is important to ensure competition and to ensure the possibility to challenge unlawful decisions of contracting bodies, insofar as publishing of the public procurement in the procurement register and application of a standstill period before the conclusion of the contract are basic elements of the specific procedure for social and specific services.

The Bill provides for a new type of procurement procedure – innovation partnership, which can be used for the development and subsequent purchase of an innovative product, service or works not yet on the market. The amendments also provide that, in the future, small-scale (10 per cent of the initial value of the supply and service contract or 15 per cent of the initial value of the works contract) changes to a public contract will be allowed without additional obligation to give reasons. The Bill will create the bases for transition to paper-free organisation of e-public procurements. The obligation of full transition to e-public procurements will enter into force on 18 October 2018. During the transitional period, contracting bodies can adapt themselves to the new provisions and make the information technology developments necessary for a smooth transition.

Arto Aas from the Reform Party Faction, Krista Aru from the Free Party Faction and Aivar Kokk from the Pro Patria and Res Publica Union Faction took the floor during the debate.

49 members of the Riigikogu voted in favour of the Bill, 4 were against, and there was one abstention.

As a majority vote of the members of the Riigikogu was needed for the Bill to be passed, the Bill was not passed.

The first reading the Bill on Amendments to the Environmental Impact Assessment and Environmental Management System Act (415 SE) was cancelled at the sitting of the Riigikogu today.

Verbatim record of the sitting (in Estonian) http://stenogrammid.riigikogu.ee/en/201705031400.

Video recordings of the sittings of the Riigikogu can be viewed at https://www.youtube.com/riigikogu (NB! The recording will be uploaded with a delay.)

Riigikogu Press Service
Marie Kukk
631 6456; 58 213 309
Questions: press@riigikogu.ee