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In connection with the submission of the State Budget of 2009, Prime Minister Andrus Ansip made a political statement before the Riigikogu. The Prime Minister claimed in his speech that the preparation of the state budget with total volume of 98.7 billion kroons had been more public than ever. ““Balance” is the most appropriate word to describe the state budget of 2009,” asserted Ansip. He explained that balance had been achieved between revenue and expenditure as well as in the compromise between all three parties of the coalition. Ansip highlighted the fact that education is undisputedly a priority sphere in the coming year’s budget which will see one of the fastest growths of investments in the next year’s budget. Ansip also reassured peace of mind and security for pensioners and young families. Moreover, Ansip called to think already what would happen after the year 2009 and after five or ten years. In this regard, he underlined improvement of the flexibility of labour force market, support of export and adherence to the strict budget policy.

Ansip said that the draft budget was a result of joint work which had been completed in time and which was all in all satisfactory.

Deputy Chairman of the Estonian Centre Party Faction Ain Seppik, member of the Estonian People’s Union Faction Tarmo Mänd, member of the Estonian Reform Party Faction Jürgen Ligi, Chairman of the Pro Patria and Res Publica Union Faction Mart Laar, Chairman of the Social Democratic Party Faction Eiki Nestor and Chairman of the Estonian Centre Party Faction Valdur Lahtvee presented comments on behalf of their factions.

President of Eesti Pank Andres Lipstok presented the 2007 report of Eesti Pank to the Riigikogu. “The main objective of Eesti Pank which belongs to the European System of Central Banks is to ensure price stability in Estonia which can be achieved primarily by means of the fixed exchange rate of kroon to euro. Therefore, in discussing the last year’s results, I will first touch on the issues of price rise in Estonia,” stressed Lipstok. He explained that inflation, that is, the growth of consumer prices would remain stable in average perspective thanks to the monetary policy framework and stable exchange rate of Estonia. At the same time it should be stressed, however, that the so-to-say “natural inflation” is somewhat higher in Estonia than in the European Union. Lipstok claimed that inflation in Estonia would remain above EU average for as long as the economic growth of Estonia would remain faster the than the EU average. Lipstok: “The price rise in Estonia in 2007 was occasioned by several additional factors, among other things, the rapid increase of domestic demand in recent years and price rises in the world market. Starting from the second quarter this year, we have seen clear signs of slowdown of price rise. In the second half of 2008, we are expecting price rise to keep gradually slowing down in Estonia. The forecast for inflation fall in 2009 and 2010 is 5% and 3.5%, respectively.”

In addition, Lipstok gave an overview of the main areas of activities of the central bank and spoke about the activities of Eesti Pank towards enhancing the management of the organisation.     

Chairman of the Management Board of the Financial Supervision Authority Raul Malmstein presented a report on the situation in the world’s capital markets and the financial sector of Estonia. Malmstein asserted that the Estonian financial system was keeping stable at the moment and there were no systematic risks. He admitted that the unprecedented events in the world’s capital markets were having an indirect and yet fairly tangible impact on the Estonian economy. “The global financial crisis is affecting the Estonian people through a decrease in the value of investments as well as an increase in loan prices. Risks have increased for the financial sector as a whole,” said Malmstein.

Likewise, the report included an overview of supervision priorities of the Financial Supervision Authority. 

For more details, see verbatim record (in Estonian):

The Riigikogu Press Service