Overview by the Government of the Republic of Estonia on the stability support provided by the European Stability Mechanism and the Republic of Estonia's participation in the European Stability Mechanism
Session: 15th Riigikogu, 4th session, plenary session
Date: 2024-12-17 12:19
Participating Politicians:
Total Speeches: 12
Membership: 15
Agenda Duration: 13m
AI Summaries: 12/12 Speeches (100.0%)
Analysis: Structured Analysis
Politicians Speaking Time
Politicians
Analysis
Summary
Finance Minister Jürgen Ligi presented an overview to the Riigikogu regarding the stability support provided by the European Stability Mechanism (ESM) and the Republic of Estonia’s participation in the mechanism. In his introduction, the Minister emphasized the importance of memory and continuity, recalling the heated debates 12 years ago following the global financial crisis regarding the creation of the ESM. He affirmed that the existence of the ESM has helped to calm financial markets and that it was a good investment for Estonia in ensuring market stability.
Ligi highlighted that the ESM currently has no active support programs. Previous support loans (both from the ESM and its predecessor, the EFSF) are in the monitoring phase and repayments have begun (Spain in 2022, Greece EFSF loan repayments in 2023). He emphasized Greece's successful economic reforms, noting that Greece's current budget is in better shape than Estonia’s. The Minister explained that the ESM reform, which would give the mechanism the role of a crisis resolution fund within the banking union, remains unratified due to Italy's non-ratification. Although the ESM has maintained high credit ratings and has a large lending capacity (€417.5 billion), the Minister does not currently see any country on the horizon that urgently needs assistance. He also cautioned against excessive expansion of the ESM's functions to avoid collective responsibility for the loose budgetary policies of other countries, stressing that budgetary responsibility must remain national.
Decisions Made 1
Decisions were not made.
Aseesimees Toomas Kivimägi
AI Summary
At the second item on the agenda, an overview will be given of the stability support provided by the European Stability Mechanism and Estonia's participation in the mechanism; the presenter will be Finance Minister Jürgen Ligi, who is already present.
Rahandusminister Jürgen Ligi
AI Summary
Jürgen Ligi notes that the ESM has ensured stability during euro area crises over the past 12 years, and its lending capacity is up to 500 billion euros (free funds 417.5 billion, reserves 3.3 billion), and through reform of the ESM it can temporarily come to the aid of the Banking Union in crisis resolution from SRF funds, but this requires ratification by all members (except Italy) and the ESM remains increasingly prepared to ensure market stability.
Aseesimees Toomas Kivimägi
AI Summary
Toomas Kivimägi thanks and informs that there are a few more questions and asks Urve Tiidust to answer.
Urve Tiidus
Profiling Eesti Reformierakonna fraktsioonAI Summary
Urve Tiidus thanked the chair and the minister, recalled the ESM and the Greece debate from 12 years ago, and asked whether there is any country on the horizon that could actually need this system.
Rahandusminister Jürgen Ligi
AI Summary
The existence of the ESM calmed markets and eased the servicing of states' loan obligations, but its deepest impact was the compulsion of states to undertake economic reforms, and Estonia benefited through market stability and GDP; although the ESM has been a good investment, its aim was not only to earn interest, and today there is no acute crisis on the horizon.
Aseesimees Toomas Kivimägi
AI Summary
The vice-chairman invites Jaanus Karilaid to speak.
Jaanus Karilaid
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
The question concerns the approximately 100 billion euros in loans to Greece provided through the ESM in 2015–2016, their duration, whether they were for investments or for current expenditures, and the loan interest.
Rahandusminister Jürgen Ligi
AI Summary
Finance Minister Jürgen Ligi said that Greece has been loaned through the ESM since the EFSF in 2010; the loans have been serviced and 14.7 billion euros have been repaid; repayments are planned for 2023–2070; and although the long repayment period may raise concerns, Greece has reformed seriously as a result, and the Greek finance minister recently praised these conditions.
Aseesimees Toomas Kivimägi
AI Summary
The vice-chairman Toomas Kivimägi invited Vadim Belobrovtsev to perform.
Vadim Belobrovtsev
Profiling Eesti Keskerakonna fraktsioonAI Summary
Belobrovtsev discussed reforming the ESM, wishing to expand its functions to promote economic growth and resilience, and to turn the euro area into a kind of protective fund against economic shocks, and asked the minister whether the current mechanism is sufficient or whether it should be reformed.
Rahandusminister Jürgen Ligi
AI Summary
Finance Minister Jürgen Ligi said that the reform of the ESM is unfinished and depends on the decision of one country, and it must be cautious and well-calibrated as an additional safeguard to address a banking crisis, because the state's budgetary responsibility is national, and with solidarity we would bear responsibility for the lax economic policies of other countries.
Aseesimees Toomas Kivimägi
AI Summary
Toomas Kivimägi thanked the participants, stated that there were no questions, opened and closed the negotiations, and ended the processing of this agenda item.