Bank of Estonia 2023 Report
Session: Fifteenth Riigikogu, Third Session, Plenary Session
Date: 2024-06-13 13:02
Total Speeches: 53
Membership: 15
Agenda Duration: 1h 11m
AI Summaries: 53/53 Speeches (100.0%)
Analysis: Structured Analysis
Politicians Speaking Time
Politicians
Analysis
Summary
The first item on the agenda was the consideration of the Bank of Estonia's 2023 annual report. Madis Müller, the President of the Bank of Estonia, responsible for the presentation, provided an overview of the current status and considerations regarding inflation, monetary policy, and the euro area economy, including recent interest rate changes and their impact on the Estonian economy and financial sector. Following the presentation, questions were posed by Riigikogu members, and negotiations ensued between faction representatives. These discussions highlighted both economic issues and questions concerning the macro-supportive role, confirming that the debate would remain focused on sustainable economic growth, price stability, and financial stability.
The second part of the agenda item covered broader themes: the Bank of Estonia's contribution to strengthening crisis resilience and financial supervision (including payment services, cash circulation, crisis prevention, and the expected functionality of independent information systems), the development of the digital euro, and the analysis of environmental and climate change impacts. Discussion also covered the implementation of the rounding rule (coin rounding) and the launch of coin collection in a more environmentally friendly manner, as well as other sustainability initiatives and the green office certificate awarded to the Bank of Estonia. Furthermore, issues concerning the IMF, public finance, the state debt balance, and the balancing of budgetary rules were addressed. These topics were central to everyone's attention, and maintaining the country's competitiveness and long-term economic growth held a significant place. Finally, the speakers noted that the first item on the agenda had been concluded and that discussions would continue in their future work.
Decisions Made 1
No decisions have been made regarding this agenda item.
Most Active Speaker
The most active speaker was pid=63JvL6tKBQE, who corresponds to Tanel Kiik; his involvement was primarily limited to posing the first question, yet the discussion connected to his name remained notable throughout the entire experience. Position: other.
Aseesimees Jüri Ratas
AI Summary
The first item on the agenda is the 2023 annual report of the Bank of Estonia, which will be presented by the Governor of the Bank of Estonia, Madis Müller. This will be followed by questions and discussions involving representatives of the parliamentary factions.
Eesti Panga president Madis Müller
AI Summary
Madis Müller stated that inflation in the euro area has slowed and the European Central Bank has begun cutting interest rates, but achieving full price stability requires continued effort and monitoring of the economy and the financial sector. Eesti Pank (the Bank of Estonia) is focusing on crisis preparedness and promoting competition in the home loan market, discussing the necessity related to the digital euro and the rounding rule, even as the Estonian economy contracted for the second consecutive year and consumption and the labor market remained strong. Bank profits, however, grew, and it is necessary to keep public finances and the debt burden at a reasonable level.
Aseesimees Jüri Ratas
AI Summary
Deputy Speaker Jüri Ratas thanked the President of the Bank of Estonia for the presentation, called for questions, and began the discussion alongside Tanel Kiik.
Tanel Kiik
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
Tanel Kiik is asking the prime ministerial candidate how much of their time they are willing to dedicate to the health sector, including the development of a sustainable funding model and the Tallinn Hospital project.
Eesti Panga president Madis Müller
AI Summary
We haven't conducted an in-depth study on the macroeconomic impact of inequality, but we have assessed Estonia's wealth and income inequality—incomes are slightly above the European average and wealth inequality is somewhat greater. In recent years, the incomes of lower-income individuals have grown slightly due to the rise in the minimum wage, and these indicators have a two-way impact on the economy. This is a good suggestion for us to assess more deeply in our future analyses.
Aseesimees Jüri Ratas
AI Summary
Deputy Speaker Jüri Ratas invites Kristo Enn Vaga to speak.
Kristo Enn Vaga
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
The Deputy Speaker of the Riigikogu asked the President of the Bank of Estonia whether the state could next issue a government bond targeted at retail investors, and what potential that would hold for financing national defense and securing better loan conditions compared to the international capital market.
Eesti Panga president Madis Müller
AI Summary
Madis Müller emphasizes that the issuance of Estonian government bonds to local retail investors could be beneficial, as the interest payments would remain in Estonia and support the economy. Furthermore, this could be combined with a targeted use for covering defense investments, along with the consideration of additional incentives.
Urmas Kruuse
Profiling Eesti Reformierakonna fraktsioonAI Summary
Urmas Kruuse asked how often, during crises that caused inflation, the opportunity for price increases was utilized without a direct cost justification, and how significant the psychological impact is that truly prevents consumers from choosing a different product or company.
Aseesimees Jüri Ratas
AI Summary
Vice-Speaker Jüri Ratas invites Urmas Kruuse to the stage.
Eesti Panga president Madis Müller
AI Summary
Currently, the situation has clearly shifted: exporters are finding it harder to successfully sell at high prices, and Estonians have become a little more cautious again due to increased saving. This means the period when it was very easy to hike prices is now behind us.
Aseesimees Jüri Ratas
AI Summary
The Deputy Chairman invites Kristina Šmigun-Vähi to speak.
Kristina Šmigun-Vähi
Profiling Eesti Reformierakonna fraktsioonAI Summary
Kristina Šmigun-Vähi said that opening bank accounts for foreign companies in Estonia is difficult, even though the e-state promises a simple and fast process. She went on to ask what needs to be changed so that these processes could be accelerated and doing business here would become easier.
Eesti Panga president Madis Müller
AI Summary
Madis Müller said that over the past year, there has been very little discussion of the problem that foreign companies cannot open accounts in Estonian banks, because banks have different risk profiles and may choose not to offer services to certain companies, while another bank might do so, and banks are not obligated to open accounts for all companies. Next, the Chairman of the Management Board of the Financial Supervision Authority will take the floor and may be able to provide a more precise answer.
Aseesimees Jüri Ratas
AI Summary
Deputy Chairman Jüri Ratas invites Urve Tiidu to speak.
Urve Tiidus
Profiling Eesti Reformierakonna fraktsioonAI Summary
Urve Tiidus asked the President of the Bank of Estonia whether the soon-to-be-published economic forecast offers optimism for the summer or rather the opposite outlook.
Eesti Panga president Madis Müller
AI Summary
Madis Müller expressed optimism about the near term and the second quarter, stating that the Estonian economy could see a slight improvement in the second half of the year, driven by the recovery of the European economy, better export opportunities, and improved purchasing power among consumers. He added that if incomes rise and interest rates drop, consumption and investments could pick up pace again, allowing the economy to slowly recover.
Aseesimees Jüri Ratas
AI Summary
We would like to invite Maria Jufereva-Skuratovski to the stage to speak.
Maria Jufereva-Skuratovski
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
The speaker highlights the concern regarding the cost of living and asks what other factors point to short-term economic growth, even though it has been mentioned that the prerequisites exist and exports within the European Union are improving.
Eesti Panga president Madis Müller
AI Summary
The presentation emphasizes that the economic recovery is primarily driven by domestic demand and improved purchasing power; corporate investments are strong, and Eurozone growth is generating optimism, although exports and the real estate and construction sectors remain weak.
Aseesimees Jüri Ratas
AI Summary
This is a brief invitation to welcome Signe Kivi to the stage.
Signe Kivi
Profiling Eesti Reformierakonna fraktsioonAI Summary
In the Bank of Estonia report, Signe Kivi highlighted the organization's values, public communication, cultural activities, and the museum. She also noted that some former presidents have an interest in art, and she inquired about the fate of the art collection: whether it is being supplemented and where it is being exhibited.
Eesti Panga president Madis Müller
AI Summary
Müller noted that the art collection is well-maintained and primarily displayed on the walls. Although it is not located in an open public space, sufficient events are organized, and there are plans to renovate the museum, making it a more contemporary and open center to attract more visitors.
Aseesimees Jüri Ratas
AI Summary
This address is simply a request to invite Igor Taro to speak.
Igor Taro
AI Summary
Igor Taro emphasized the implementation of the rounding rule and its connection to environmental issues, noting that climate goals and sustainability are important at Eesti Pank, and requested a more detailed explanation regarding the environmental impact of circulating coins and the Bank of Estonia’s sustainability topics.
Eesti Panga president Madis Müller
AI Summary
The Bank of Estonia emphasizes that the circulation of small denomination coins is ineffective, and that by withdrawing them and supporting the rounding rule, the environmental footprint will be reduced. Simultaneously, investments and the organization’s sustainability are being promoted, and the impact of climate change on the economy and the financial sector is being taken into account.
Aseesimees Jüri Ratas
AI Summary
Deputy Chairman Jüri Ratas invites Peeter Tali to the rostrum to speak.
Peeter Tali
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
Peeter Tali asks where to find billions of euros for national defense to cover the capability shortfalls that have emerged due to the proximity of an aggressor state. He also asks what the government's best economic advisor recommends—a tax hike or expenditure cuts—and whether defense costs should be excluded from the fiscal balance calculations, and what the legislature ought to do in this situation.
Eesti Panga president Madis Müller
AI Summary
Madis Müller said that while the exact size of defense spending is complex and the need is acute, requiring experts to decide, it is not suitable for the central bank to determine the volume of state expenditures or the structure of taxes. Moreover, permanent expenditures require sustainable revenue streams to avoid the annual growth of the debt burden and the problems that come with it.
Aseesimees Jüri Ratas
AI Summary
The Deputy Chairman called upon Maido Ruusmann to speak.
Maido Ruusmann
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
Maido Ruusmann, the representative of Southeast Estonia, thanked the director and the Bank of Estonia for the positive message regarding future optimism, and asked whether the economic recovery would reach all regions, whether regional policy would affect the rebound uniformly, and whether the government would be given recommendations for reducing inequality.
Eesti Panga president Madis Müller
AI Summary
The President of the Bank of Estonia, Madis Müller, stated that Estonia’s economic development has not been regionally uniform. In recent years, industrial production has faced challenges, while the service sector has been more successful, often driven by the IT and telecom fields and concentrated in larger cities. He added that although specific attention has not yet been paid to recommendations concerning regional policy, analyses should place greater emphasis on evaluating different regions.
Aseesimees Jüri Ratas
AI Summary
Deputy Speaker Jüri Ratas invites Andre Hanimägi to the stage to make his presentation.
Andre Hanimägi
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
The presentation will discuss the bank tax issue—whether to cut or raise taxes—compare the Lithuanian experience, and examine what this would mean for consumers and the Estonian economy, including how banks might show solidarity. Simultaneously, the question will be raised whether the Bank of Estonia has started addressing the issue of high interest margins.
Eesti Panga president Madis Müller
AI Summary
Madis Müller stated that the special taxation of banks is dangerous, and for the sake of fairness and competition, economic policy must be maintained as a unified principle, allowing clients to benefit from more favorable loan and deposit terms. Furthermore, specific proposals have been submitted in cooperation with the Financial Supervision Authority to enhance competition within the regulatory framework. Simultaneously, clients themselves should actively compare offers and, if necessary, source loans differently, and we also require assistance from your side for this endeavor.
Aseesimees Jüri Ratas
AI Summary
Deputy Speaker Jüri Ratas addresses Toomas Kivimägi and asks him to come forward to speak.
Toomas Kivimägi
Profiling Eesti Reformierakonna fraktsioonAI Summary
Toomas Kivimägi discussed the rise of Euribor and the potential lowering of European Central Bank interest rates, and asked whether the priority, if he were Prime Minister, would be implementing additional taxes or cutting expenditures to cover the state budget.
Eesti Panga president Madis Müller
AI Summary
Madis Müller stated that while Eurozone inflation is on a downward trend, and last week’s interest rate cut provided assurance that inflation will hit 2%, he is unable to provide exact forecasts. It is widely expected that the European Central Bank may cut interest rates a couple more times this year. However, if price growth continues, maintaining high rates indefinitely won't be reasonable. The debate over whether to cut expenditures or find additional revenue streams demands both actions, despite the limited scope for cost savings within the state apparatus.
Aseesimees Jüri Ratas
AI Summary
Deputy Speaker Jüri Ratas calls upon Andres Sutt to speak.
Andres Sutt
AI Summary
Andres Sutt points out that while nominal GDP in euros is higher post-COVID, real indicators suggest an economic contraction, and he questions our ability to accurately measure the relationship between the real and nominal growth rates of the economy.
Eesti Panga president Madis Müller
AI Summary
Madis Müller stated that the rapid rise in prices has led to a divergence between nominal and real economic indicators, and although Statistics Estonia and the Bank of Estonia are doing their utmost, he is not convinced that everything is measured with complete accuracy, particularly concerning the methodology for prices, such as the electricity price within the consumer price index.
Aseesimees Jüri Ratas
AI Summary
Deputy Speaker Jüri Ratas called upon Kalle Laanet to speak.
Kalle Laanet
Profiling Eesti Reformierakonna fraktsioonAI Summary
Kalle Laanet pointed out that there is a vigorous debate ongoing regarding the financing of national defense, and he shares that view, aiming to add approximately 1.6 billion euros in the coming years. He simultaneously questioned how such an increase would be feasible and whether society is prepared to accept this additional contribution.
Eesti Panga president Madis Müller
AI Summary
Madis Müller said that in order to strengthen defense capabilities, permanent sources of revenue must be found, and if necessary, consideration should be given to borrowing or issuing bonds targeted at Estonian investors, but without allowing the national debt burden to increase permanently.
Aseesimees Jüri Ratas
AI Summary
Deputy Chairman Jüri Ratas addresses Ester Karuse and asks her.
Ester Karuse
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
Ester Karuse, hailing from Valgamaa, points out the regional differences in the economy and suggests that financial literacy programs delivered through schools could aid regional development. She also inquires whether the Bank of Estonia has already started or plans to start such initiatives.
Eesti Panga president Madis Müller
AI Summary
Madis Müller stated that the Bank of Estonia is promoting economic education in schools in cooperation with the Ministry of Finance and the Financial Supervision Authority. It is also updating its museum and directing content toward young people, particularly basic school students, and recognizing teachers to ensure that knowledge reaches the youth.
Aseesimees Jüri Ratas
AI Summary
This is a brief request to invite Tarmo Tamm to speak.
Tarmo Tamm
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
He asks the manager and the presenter whether the government's plan to double the economy is achievable by 2035, and what specific recommendations should be emphasized to properly implement the plan.
Eesti Panga president Madis Müller
AI Summary
Madis Müller said that the ambitious plan is based on the conclusions of the expert council and input from the Bank of Estonia. It focuses on the long-term competitiveness of the economy, including the availability of a qualified workforce, the promotion of digitalization and automation, well-considered regulations, and better support for businesses through the cost of capital and targeted collateral/guarantees.
Aseesimees Jüri Ratas
AI Summary
The Deputy Speaker thanked the President of the Bank of Estonia, opened the debate, and invited Andres Sutt, the representative of the Reform Party faction, to the podium, asking him to approach calmly so as not to injure his ankles.
Andres Sutt
AI Summary
Andres Sutt praised the Bank of Estonia, emphasizing that in the age of disruptive technologies and AI, it is crucial to assess Estonia's competitiveness, focus on measuring cyber resilience and sustainability, develop financial literacy and education, and strengthen the independence of the Fiscal Council and the formulation of economic policy for both the state and the euro area.
Aseesimees Jüri Ratas
AI Summary
Ratas concluded the discussion, thanked the President of the Bank of Estonia and the Bank of Estonia for the overview, and all members of the Riigikogu who took part in the debate, announcing that the processing of the first item on the agenda had been completed.