The function of the national nuclear regulator, along with all the rights and obligations associated with that role, will be established under the Consumer Protection and Technical Regulatory Authority. Among other things, the Act establishes a phased licensing system for the construction of a plant, consisting of a preliminary assessment, a construction license, a testing license, an operating license, and a decommissioning license. According to the Act, the nuclear regulator will begin operations on 1 January 2027.

The Act also establishes the principle that the developer and operator of a nuclear power plant will bear full responsibility for the safety of the facility and for the costs incurred at the end of its life cycle. A national decommissioning fund will be established for the decommissioning of the nuclear power plant; during the plant’s operational life, the operator will contribute funds to it for dismantling the plant and the final disposal of waste. The Act also provides for the principles of nuclear security, physical protection, emergency preparedness, and the implementation of international safeguards.

During the proceedings, the Riigikogu amended the Act by introducing an additional level of political decision-making to the procedure for constructing a nuclear power plant – in addition to the nuclear regulator and the government, the Riigikogu will also have to give its approval when a decision on the construction of a nuclear power plant is made.

The Nuclear Energy and Safety Act (856 SE), initiated by the Government, was passed with 63 votes in favour and 10 against, and there was one abstention.

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Among other things, the IMF delegation was interested in the development of Estonia’s tax system to assess how it could better support budget sustainability. Reforms to improve competitiveness were also discussed, including strengthening the investment environment, opportunities for using of artificial intelligence, and labour market policy. Special attention was given to energy policy and the impact of electricity price fluctuations on competitiveness.

Chair of the Finance Committee Annely Akkermann explained the situation regarding the sustainability of Estonia’s state budget.

“Due to the rapid growth in defence spending and changes in income tax, the general government deficit has risen to 4.5 percent, which will decrease gradually in the coming years and reach 2.8 percent of GDP by 2029. The goal for the coming years is to reduce the budget deficit,” Akkermann said. She pointed out that after the cancellation of a two-percentage-point income tax increase, Estonia’s tax burden fell from 36.6 percent to 35.2 percent. The national debt burden grew by EUR 1.7 billion, to 25.9 percent of GDP. The national debt burden will increase because of all the additional costs, and is predicted to reach 31.4 percent of GDP in 2029, and the interest costs will amount to 0.8 percent of the GDP, or EUR 417 million. High inflation has slowed down and currently stands at 4 percent.

According to Chairman of the Economic Affairs Committee Marek Reinaas, the meeting provided a useful comparative overview of the economic situation in neighbouring countries. He noted that the Estonian economy was on the rise, which was evidenced by 2.4 percent economic growth. “To support a technology-intensive growth cycle in Estonia’s economy, we are creating an attractive investment environment, a supply of clean energy, and diverse access to capital for businesses that meet the economy’s changing needs,” Reinaas explained. To resolve energy-related challenges and achieve more affordable electricity prices, it is necessary to invest in the construction of wind farms to ensure that 70 percent of the energy portfolio consists of non-dispatchable green energy.

Chair Annely Akkermann, Deputy Chair Andrei Korobeinik, and members Aivar Sõerd, Mart Võrklaev and Riina Sikkut from the Finance Committee, and Chairman Marek Reinaas and member Urve Tiidus from the Economic Affairs Committee participated in the meeting with the IMF delegation.

During its visit, the IMF delegation will get an overview of the current state and prospects of Estonia’s financial sector, as well as changes in anti-money laundering policy and practices. As in previous years, the focus is on the readiness of Estonia’s financial supervisory authorities to take additional steps to ensure financial stability if it should prove to be necessary.

The delegation of the International Monetary Fund (IMF), which is visiting Estonia until 9 June, will discuss Estonia’s economic situation and necessary economic policy measures with representatives of the public and private sectors. The visit takes place in the framework of the IMF’s annual economic policy consultations.

The IMF delegation will meet with members of the Government and the Riigikogu, as well as with leaders and analysts from Eesti Pank (Bank of Estonia), and representatives of ministries, local governments, government agencies, and the Financial Supervision Authority. They have also planned to have meetings with the representatives of commercial banks, professional organisations and private businesses.

Head of the IMF delegation Vincenzo Guzzo will present the conclusions of the visit at the press conference on Tuesday, 9 June at 11 a.m. The Minister of Finance and the Governor of the Bank of Estonia will also give comments at the press conference.

The IMF discusses important economic policy issues with all member states. The outcome of the consultation is a public report reflecting the IMF experts’ assessment of Estonia’s economic policy.

Photos (Erik Peinar, Chancellery of the Riigikogu)

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“We have only just embarked on the road to introducing nuclear energy and many questions are still to be answered; we look forward to great public interest and wide participation in discussions in the society. When deciding to build a nuclear power station, we must be sure that the society agrees and that it actually reduces the price of energy,” Jevgrafov said.

Member of the Committee and the Chairman of the Nuclear Power Support Group Mario Kadastik called it possibly the most important Bill of this Riigikogu. “Nuclear energy must form part of our security of supply. Considering the current events in the Strait of Hormuz, we cannot count on gas,” he warned.

The Minister of Energy and the Environment Andres Sutt also took part in the sitting, stating that the function of the national nuclear regulator with all the rights and obligations this entails would be created at the Consumer Protection and Technical Regulatory Authority (CPTRA). The Bill provides a gradual permit system for the construction of the power station, with steps such as preliminary assessment, building permit, testing permit, operating permit, and decommissioning permit. The nuclear regulator is to begin its work on 1 January 2027.

Member of the Committee Rene Kokk advocated for the establishment of a separate institution of nuclear regulator. “I am not opposed to the nuclear regulator operating under the CPTRA at first; however, seeing how the CPTRA is constantly being burdened with new tasks, the state should be prepared to establish a separate regulator,” he stressed.

The Bill also sets out the principle that the founder and operator of the power station is fully responsible for the safety of the object and for the expenses incurred at the end of its life cycle. A national decommissioning fund is to be established for this eventuality; the operator is to collect funds there during the operational period of the power station for its future decommissioning costs and the final storage of waste. The Bill also sets out the principles of nuclear safety, physical protection, emergency readiness, and implementation of international control measures.

The Economic Affairs Committee proposed to the Board that the Nuclear Energy and Safety Bill (856 SE) be entered on the agenda of the plenary sitting on April 8 and to conclude the first reading of the Bill.

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Deputy Chairman of the Economic Affairs Committee Aleksei Jevgrafov asked at the Committee sitting whether the geographical indication could also be used by a producer whose products were manufactured in several different locations. “Often, a product is not manufactured entirely on-site, but raw materials come from one place, the product is assembled in another place, packaged in a third place, and so on,” he explained. According to Minister of Justice and Digital Affairs Liisa Pakosta, who attended the sitting, this is not an obstacle—in order to obtain a geographical indication, it is sufficient if at least one stage of production takes place in the region.

Under the new regulations, the protected designation may be used by all producers who operate in the designated region and meet the established requirements. The application to obtain a geographical indication must be submitted to the Patent Office. The Consumer Protection and Technical Regulatory Authority will be responsible for monitoring whether the products meet the specifications—for example, whether a specific Haapsalu shawl is authentic.

At its yesterday’s sitting, the Economic Affairs Committee made a proposal to the Board of the Riigikogu to include the Bill on Amendments to the Geographical Indication Protection Act, Trade Marks Act and State Fees Act (813 SE) in the agenda of the plenary sitting of 7 April and to conclude the first reading of the Bill.

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The Chairman of the Finance Committee Annely Akkermann, members of the Committee Maris Lauri and Mart Võrklaev, and the Chairman of the Economic Affairs Committee Marek Reinaas outlined the factors affecting the state budget, the planned changes in taxation, the state of the economy, and the measures to ensure energy security. The high volume of defence investments is temporarily increasing the deficit of the current account. Next year, the state defence expenditure will increase to 5.3% of the GDP.

“This year, the budget deficit will decrease to 1.0% of the GDP thanks to increased taxes; however, the rapid increase in defence expenditure and changes in the income tax next year will take it to 4.0% of the GDP,” Akkermann admitted. She added that the deficit would be reduced step by step each year, reaching 2.8% of the GDP by 2029. State revenue is predicted to decrease by EUR 780 million due to the introduction of the uniform EUR 700 income tax exemption and the cancellation of the planned 2 % increase in income tax. The tax burden in Estonia will fall from 36.6% to 35.2%.

According to the State Budget Bill, the planned general government deficit will be 4.5% of the GDP next year, which will remain within the limits of the exemption granted by the European Union for rapid increases in defence spending. Next year’s debt burden will grow by EUR 1.7 billion to 25.9% of the GDP.

The Ministry predicts a 5.4% increase in prices this year. Akkermann referred to an analysis by the Ministry of Finance, which said that the inflation would slow down to 3.5% annually in 2026, when the increase in the prices of food and services slows down and the impact of the tax measures diminishes. 

Due to the significant increase in the budget deficit, next year’s debt burden will grow by EUR 1.7 billion to 25.9% of the GDP.

The national debt burden will increase because of all the additional costs and is predicted to reach 31.4% of the GDP in 2029, and the interest costs to 0.8% of the GDP, or EUR 417 million.

The Chairman of the Economic Affairs Committee Marek Reinaas pointed out that the economy was slowly recovering according to the forecast. “Economic growth is an inevitable requirement in tidying up the budget. I am happy to know that the economy is on its way up,” Reinaas said. “The upward curve of the economy promises a 1% increase in the GDP for this year and 2.5% for the next.”

“The Estonian economy has all it takes for a new technology intensive growth cycle. Keeping the investment environment attractive, offering clean energy, making capital accessible to businesses and changed needs in a flexible way all ensure that Estonia has a successful economy,” Reinaas explained. “To solve challenges related to energy and achieve a more affordable price of electricity we are investing into building wind farms because the Expert Panel on Competitiveness created at the Economic Affairs Committee sees this as unavoidable to ensure that uncontrollable green energy makes up 70% in our energy portfolio,” Reinaas explained.

The IMF monitors the economies of its member countries, including Estonia, in the context of the economic policy consultations that generally take place once a year. The common name “Article IV consultations” derives from Article IV of the IMF’s Articles of Agreement. IMF’s national cooperation partner in Estonia is Eesti Pank (Bank of Estonia), which publishes summaries of the missions on its website.

The mission team specifies the objectives, scope, details, timing, and expected results of the Article IV cycle. It engages in discussions on recent macroeconomic, fiscal and financial developments, prospects, risks, and policies. The mission team is interested in feedback from the Riigikogu committees on their analytical and policy agenda before the Article IV consultations.

As this is an interim mission of the IMF, the team will not prepare a summary statement and there will be no press conference at the end of the mission. However, the interim mission is important because it usually prepares the first version of the Article IV report, which is supplemented with additional topics and economic policy messages during the mission. The outcome of the consultation is a report reflecting the IMF experts’ assessment of Estonia’s economic policy. The IMF discusses important economic policy issues with all member states.

The IMF mission is headed by Vincenzo Guzzo; he is accompanied by Bingjie Hu and Carlos de Resende, and energy expert Hugo Rojas-Romagosa.

Photos (Erik Peinar / Chancellery of the Riigikogu)

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The Act on Amendments to the Competition Act (466 SE), initiated by the Government, was passed. It creates a solution that will enable European Union block exemptions to also be applied in national competition law.

Block exemptions are one of the most used tools of EU competition law. Block exemptions cover a large number of types of contracts common in commercial activities which, despite anti-competitive provisions, have a positive impact on consumers and the economy. The block exemptions established by the European Commission apply to Estonian undertakings if their agreements have an impact on trade between member states.

The proposed solution is a “hybrid solution”, where, on the one hand, EU block exemptions become essentially directly applicable in national competition law but, on the other hand, the country is left with the possibility to review such block exemptions in advance and to provide a confirmation by a national Regulation that such block exemptions are appropriate and necessary for the Estonian legal order as well as to provide for derogations for national law where necessary. The possibility of establishing national block exemptions by Government regulation has also been retained.

This solution will allow ensure legal certainty and effective competition oversight while at the same time reducing administrative and bureaucratic burdens. It will also help to increase legal certainty for undertakings and save costs related to legal counselling.

The amended regulation will not affect the current competitive situation. There is currently one block exemption on vertical agreements, established by a Government regulation, in force in Estonia. As a result of the amendment, six block exemptions will apply in national competition law. Two of them are block exemptions concerning rail, road and inland waterway transport and technology transfer agreements that have not yet been transposed.

The amendments made in the second reading specified the wording of a provision delegating authority in the Bill and were intended to stick to the current procedure according to which the Government establishes a national regulation on the proposal of the minister in charge of the policy sector. The rights of the Competition Authority arising from the EU block exemption regulations were also specified and it was provided that the amendments relating to block exemptions would enter into force on 1 January next year.

The Act on Amendments to the Response to Memoranda and Requests for Explanations and Submission of Collective Proposals Act (475 SE), initiated by the Government, was passed. According to it, public authorities will have to provide responses to the memoranda and requests for explanations within 15 days instead of the current 30 days.

The Act maintains the principle that a response to a memorandum or request for explanation must be provided without undue delay but shortens the maximum time within which this must be done. At present, the question of a person must be answered within 30 calendar days after the date of registration thereof, but it will be no later than within 15 calendar days once the new Act enters into force. In the case of more complex addresses that require additional time to respond, the possibility remains to extend the term for response to up to two months to ensure thoroughness and quality of the responses. The person who has submitted the memorandum or request for explanation must be informed of extension of the term and of the reason therefor.

The Act is intended to speed up the response to people’s memoranda and requests for explanation, which discuss, for example, the organisation of the work of institutions, the shaping of the development of a field, information related to public life or state governance, as well as legislation and drafts developed by an agency. The amendment mainly concerns state and local government authorities, but a non-profit association, foundation, sole proprietor or company may also be an addressee of a memorandum or request for explanation if the information concerns the use of the budget funds of the state or a local government.

In the course of the second reading, the Bill was amended by adding a provision allowing for refusal to respond to a memorandum or request for explanation if a person’s address with the same content has already been answered within the last year and the need to receive information again is not justified. The provision will also allow not to respond to an address if a person is manifestly abusing the right of address.

The Act on Amendments to the Maritime Safety Act (526 SE), initiated by the Economic Affairs Committee, was passed. It reduces the rate of fairway dues in 2025 in order to maintain the international carriage of goods and passengers by sea.

Under the Act, the fairway dues for all ships entering Estonian ports and the roadstead of Estonian ports will be reduced by 14 per cent from 1 January to 31 December next year. The purpose of the amendment is to continue supporting international maritime transport and to motivate consignors to direct their trade flows through Estonian ports where possible. Fairway dues have been reduced by 15 per cent this year.

According to the explanatory memorandum, the maritime and logistics sector has not fully recovered from the COVID-19 pandemic which has caused a significant drop in passenger and freight traffic on waterways and in Estonian ports since the beginning of 2020. In addition, the freight volumes of Estonian maritime transport and ports decreased in 2023, primarily in connection with the war against Ukraine and, as a result, the sanctions imposed by the European Union on the transport of goods from Russia. The decrease in freight volumes has continued this year as well.

Jaak Aab (Social Democratic Party) took the floor during the debate.

A Bill passed the second reading

The purpose of the Bill on Amendments to the Child Protection Act and Other Acts (427 SE), initiated by the Government, is to improve the identification of and assistance to children in need and to increase the number of foster families.

Although everyone has a duty to report a child in need to the local government, many cases come to the attention of child protection too late. The role of people working with children in identifying children in need will therefore be increased. The Bill lists specialists, such as teachers, coaches and doctors, who have a special duty of care to recognise a child’s need for help and to inform the child protection worker of the municipality thereof. The Bill will also specify the right of municipalities and the Social Insurance Board to process personal data in the performance of child protection tasks.

The Bill will increase support for foster, guardianship and adoptive families who have taken a child from another family to be raised in their family and will establish the content, organisation, volume and funding of the support services for family-based alternative care.

The Bill will also create the possibility for information on children in need of permanent support due to their health condition to be automatically transmitted to municipalities via information systems early on. A list of such health conditions will be set out in a regulation. However, according to a provisional agreement they will be blindness in both eyes, cancer diagnosis, rare disease, cerebral palsy, and intellectual disabilities. The aim of the amendment is to integrate the health and social services offered to children and families in order to ease the burden on parents. Once the information about a child is received, the municipality and the Social Insurance Board will have an obligation to offer support measures to the family without the parent or guardian having to apply for assistance themselves.

The Riigikogu had suspended the second reading of the bill on 10 October as confusion had arisen in the plenary on the issue of whether granting an application to reassess the restriction on working with children could lead to a situation where those who pose an immediate threat to the safety of children could also work with children when the information concerning their punishment had been deleted from the criminal records database. As the Social Affairs Committee had received confirmation after the suspension of the second reading that the bill would not, however, create any new grounds for reassessing the restriction on working with children, no motions to amend the Bill had been submitted for the resumption of the second reading.

Aleksandr Tšaplõgin (Centre Party), Kert Kingo (Estonian Conservative People’s Party), Helle-Moonika Helme (Estonian Conservative People’s Party), Arvo Aller (Estonian Conservative People’s Party), Kalle Grünthal (Estonian Conservative People’s Party), Züleyxa Izmailova (Estonia 200), Martin Helme (Estonian Conservative People’s Party), Varro Vooglaid (Estonian Conservative People’s Party), Evelin Poolamets (Estonian Conservative People’s Party), Madis Timpson (Reform Party), Mart Helme (Estonian Conservative People’s Party) and Riina Solman (Isamaa) took the floor during the debate.

The Estonian Centre Party Group and the Estonian Conservative People’s Party Parliamentary Group moved to reject the Bill. 24 members of the Riigikogu voted in favour of the motion and 42 were against. The motion was not supported and thus the Bill passed the second reading.

A draft Resolution passed the first reading

The Draft Resolution of the Riigikogu “Increasing the Holding of the Republic of Estonia in the  European Bank for Reconstruction and Development” (542 OE),  submitted by the Government, passed the first reading. According to it, the Riigikogu gives its consent to increase Estonia’s shareholding in the European Bank for Reconstruction and Development by 403 paid-in shares with a total value of 4,030,000 euro, to be paid to the bank within five years.

Implementation of the Resolution will involve an obligation for Estonia to pay for the subscribed shares in an amount of 4,030,000 euro in equal instalments in 2025–2029. In total, the bank will issue 400,000 paid-in shares with a nominal value of four billion euro.

The purpose of increasing the bank’s paid-in capital is to strengthen the bank’s support for Ukraine both during the Russian aggression and later during the country’s recovery. According to the Bank’s estimates, the volume of these investments in Ukraine may grow to three billion euro a year in 2027–2032. The bank has invested more than 4.5 billion euro in Ukraine since the beginning of the war.

Martin Helme (Estonian Conservative People’s Party) took the floor during the debate.

The Estonian Conservative People’s Party Group moved to reject the draft Resolution. 17 members of the Riigikogu voted in favour of the motion and 41 were against. Thus, the motion was not supported, and the draft Resolution passed the first reading.

Verbatim record of the sitting (in Estonian)

Video recording will be available to watch later on the Riigikogu YouTube channel.

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Members of the press, You are welcome to attend the press conference where Chairman of the Economic Affairs Committee of the Riigikogu Jaak Aab and members of the Expert Panel on Competitiveness Ülo Kaasik, Priit Vahter, Kadri Männasoo and Uku Varblane will give an overview of the contents of the report and its recommendations.

The press conference will be held today at 12 noon in the Conference Hall of the Riigikogu. The press conference will be webcast live.

The report shows that changes in business models multiply the positive impact of digitalisation, and artificial intelligence also has a great potential in increasing productivity. The report also focuses on energy, highlighting new incentives to invest in Estonia brought about by the green transition, underlining the need to think about energy efficiency when valorising green electricity, and setting out that 60–80% share of renewable energy will ensure the lowest price of electricity. At the same time, Estonia’s productivity is held back by education drop-outs, mismatches between jobs and skills and excessive labour turnover.

The members of the Expert Panel on Competitiveness are Deputy Governor of the Bank of Estonia Ülo Kaasik, Professor of Applied Economics of the University of Tartu Priit Vahter, Tenured Professor of Applied Econometrics at Tallinn University of Technology Kadri Männasoo and Head of Research at the Foresight Centre Uku Varblane. Numerous experts and stakeholders, like other universities and research institutes, representatives of employers and employees as well as public authorities were also involved in the work of the Expert Panel.

The video recording can be viewed later on the YouTube channel of the Riigikogu.
Photos can later be found in the Riigikogu photo archive (author: Erik Peinar / Chancellery of the Riigikogu).

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Members of the press,

You are welcome to attend the press conference where Chairman of the Economic Affairs Committee of the Riigikogu Jaak Aab and members of the Expert Panel on Competitiveness Ülo Kaasik, Priit Vahter, Kadri Männasoo and Uku Varblane will give an overview of the contents of the report and its recommendations.

The press conference will be held on Tuesday, 25 June, at 12 noon in the Conference Hall of the Riigikogu. The press conference will be public, and it will be webcast live.

The report shows that changes in business models multiply the positive impact of digitalisation, and artificial intelligence also has a great potential in increasing productivity. The report also focuses on energy, highlighting new incentives to invest in Estonia brought about by the green transition, underlining the need to think about energy efficiency when valorising green electricity, and setting out that 60–80% share of renewable energy will ensure the lowest price of electricity. At the same time, Estonia’s productivity is held back by education drop-outs, mismatches between jobs and skills and excessive labour turnover.

The members of the Expert Panel on Competitiveness are Deputy Governor of the Bank of Estonia Ülo Kaasik, Professor of Applied Economics of the University of Tartu Priit Vahter, Tenured Professor of Applied Econometrics at Tallinn University of Technology Kadri Männasoo and Head of Research at the Foresight Centre Uku Varblane. Numerous experts and stakeholders, like other universities and research institutes, representatives of employers and employees as well as public authorities were also involved in the work of the Expert Panel.

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Priit Lomp, member of the Economic Affairs Committee, and Chairman of the Committee until this week, explained that his motivation in convening the Expert Panel had been a concern for the wellbeing of the economy, but also his wish to enhance the role of the Riigikogu in leading the processes in real life. “On behalf of the Economic Affairs Committee, but I also hope that on behalf of all the other members of the Riigikogu, I express my gratitude to the members of the Expert Panel – Kadri Männasoo from the Tallinn University of Technology, Priit Vahter from the University of Tartu, Uku Varblane from the Foresight Centre, and Ülo Kaasik from the Bank of Estonia, and also to all their colleagues in these institutions – for having provided the input for this massive collection of materials and having helped to illustrate it with examples, statistics, and recommendations. I would also like to thank other partners and associations of entrepreneurs who have provided their input and criticism, and have asked difficult questions,” he said.

Lomp emphasised that the end goal of economic policy was not to have the best economy but to achieve a broad improvement of general wellbeing. “As policy shapers, we need to have the skills and the courage to influence the business environment, physical infrastructure, specialisation, and know-how and talents much more than before, as all these have a huge impact on the competitiveness. The question of competitiveness has been brought even more to the forefront by the fact that several components of our success over the last decades, such as cheap labour and energy, access to affordable raw materials from Russia and Belarus, are now lost to us,” he said.

Lomp also gave a brief overview of the topics analysed by the Expert Panel, which include lack of qualified labour, level of digitalisation and automation in Estonian businesses, concerns for economy and resource productivity, excessive bureaucracy and ambiguity of priorities and policies, considerable disparity in the price of capital in comparison to other EU countries, and the additional possible increase in costs with the implementation of the green transition. “The report compiled by the Panel and its partners is being polished as we speak and will hopefully be ready to go to print next month. This document, but also the initial input by researchers of the University of Tartu, should serve as the foundational material for every decision maker to make sure we are moving in the right direction,” he stressed.

Member of the Expert Panel and Deputy Governor of the Bank of Estonia Ülo Kaasik reminded the listeners that when we talked about the long-term growth of Estonian economy, we should not expect a sprint race. “In sports terms, we are dealing with quite a lengthy marathon where we should not sprint off immediately, especially in the wrong direction; instead, we need to choose the right pace and make sure it is within our abilities,” he said.

Estonia has many advantages that we should keep. “We have enjoyed an excellent business environment; studies show that our taxation system is the best in the world, we have flexible labour market, very agile and fast-growing ICT industry. ICT and the whole digital governance have definitely been an Estonian success story.” He added that our problem was the lack of transport connections to other countries – our geographical position and size being something Estonia could not change. 

Despite our innovative ICT, we continue to have problems with the low application of automation and digitalisation in business and industries on average. “We have come to realise that the level of digitalisation remains too low. Just like the application of AI is still in relatively early stages or applied in real life by relatively few people,” he stated. 

Kaasik referred to the study of the University of Tartu, which showed that increased automation in businesses has increased the productivity by an average of 22 percent. “What’s more – if this automation goes hand in hand with organisational renewal, it has been twice as effective and businesses have experienced a nearly 40 percent increase in productivity. Indeed, our suggestion when aiming to support businesses in giving more attention to the digitalisation-automation side is not to focus on whether they have implemented digitalisation or some technical application software in their manufacturing process, and instead look at the leadership quality in general: how to best use the data, implement AI, carry out innovation in the organisation more broadly,”  he explained.

The Deputy Governor of the Bank of Estonia also touched on the lack of qualified labour, costs related to the green transition, scientific innovation, need to ensure affordable power, excessive bureaucracy, and high price of funding entrepreneurship. 

The third speaker was the founder and CEO of defence industry company DefSecIntel Solutions Jaanus Tamm, who also serves on the councils of the Estonian Defence and Aerospace Industry Association and the Defence Estonia Cluster. He thanked the authors of the report on competitiveness and felt assured that it would serve as a basis for useful discussions. “Last year we were also the Defence Business of the Year, so I know a thing or two about this industry. I will share my experiences and perspectives, talk about this report and what is going on in the economy,” he began. 

“We have over 120 companies in our Association, ranging widely from manufacturing plants to food producers and other service providers for the Defence Forces. But we also have quite a large group of companies, numbering several dozens, who are working with smart solutions today. And it is solutions like these, as the report says, that are lacking in Estonia”. The builder of drones and tracking devices explained that with the deterioration of the global security situation, demand for smart solutions had increased very rapidly. “Today, we can insert ourselves into supply chains and decision-making processes because we move faster. And we have our own products. If we remain in wait for product development in large defence companies, we would probably never reach the production stage. Then we would come here and whine a bit. Instead, today we come here and share our experiences,” he said.

Tamm lingered on several topics discussed in the report, including the bureaucratic burden. If anyone wished to build plants linked to the defence industry or an industrial park, the bureaucracy would probably take three years. “However, today we need these things immediately. What we do is to produce these abroad. We are producing in Ukraine, which is okay because we make contributions there,” Tamm said, adding that it was easier to build plants both in Finland and Latvia.

Tamm highlighted that our defence industry was part of our defence capability and Estonia’s defence industry could become the next stage in our IT success story. For the industry to receive a new impetus, however, we would need to produce more here. “After all, it is a big difference whether you produce a module for builders of asphalt factories, or whether you produce a whole factory. Whether you produce a track for a tank or an engine for an airplane, or whether you produce a whole plane or a drone,” he said. “As an entrepreneur, I am optimistic and positive, or I would not be an entrepreneur, I would not be doing this. And I believe that together we would be able to launch the next chapter in the IT success story of Estonia and give a new impetus to the economy through the smart solutions of Estonia’s defence industry.”

During the debate, Maris Lauri (Reform Party), Jaak Aab (Social Democratic Party), Liisa-Ly Pakosta (Estonia 200), Urmas Reinsalu (Isamaa), and Mario Kadastik (Reform Party) took the floor.

Verbatim record of the sitting (in Estonian), presentation by Ülo Kaasik, summary of recommendations by the Expert Panel.

Photos (Author: (Erik Peinar / Chancellery of the Riigikogu)

Video recording will be available to watch later on the Riigikogu YouTube channel.

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Deputy Chairman of the Committee Lauri Laats added that not only must it be safe to live in Estonia, but the people’s freedom of speech had to be protected as well and web hosts should not be forced to conduct surveillance activities. “People must be able to express their views even when they do not agree with the opinion of the majority. Therefore, it is necessary to be very careful in defining the terrorist content, and at the same time sufficiently strict so that Estonia would be protected from provocations coming from any regime,” Laats pointed out.

The Bill on Amendments to the Information Society Services Act and the Penal Code will bring the Estonian national law into conformity with the European Union Regulation that has the main aim of improving cooperation with web content mediators, incl. web companies, NGOs, associations and news portals to enhance the removal of terrorist content online. The content of a post is considered terrorist if it incites or glorifies the commission of terrorist acts. It also includes promoting the activities of groups or the dissemination of detailed instructions to commit terrorist acts. The regulation only applies to public websites. Web hosting service providers are obliged to remove terrorist content or block access to it. The rules have been agreed upon by the European Union, and they are supported by hosting service providers, like Google, Facebook, Twitter and YouTube. Cooperation between states is organised by the Europol.

The Penal Code will also be amended to ensure that persons can be prosecuted not only for incitements made in public but also, for example, in moderated forums and groups.

The Economic Affairs Committee decided to send the Bill on Amendments to the Information Society Services Act and the Penal Code (224 SE) to the first reading at the plenary sitting of the Riigikogu on 18 October with the motion to conclude the first reading.

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