Economic competitiveness
Session: 15th Riigikogu, 3rd sitting, information briefing
Date: 2024-01-17 15:15
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
The Riigikogu debate centered on economic competitiveness, initiated by Andres Metsoja (Isamaa) who posed a question to Prime Minister Kaja Kallas. Metsoja voiced the concerns of business organizations regarding the lack of clear economic decisions, highlighting Estonia’s status as having the most expensive borrowing in the Euro area, an ambiguous industrial policy, and factors hindering investment (such as fixed-term permits and high energy prices). He demanded that the government present a clear economic recovery plan, which should be an agreement reached across parliamentary lines.
Prime Minister Kallas acknowledged the difficult state of the economy, attributing it to the slowdowns in the Nordic and German economies and the high dependence of Estonian businesses and individuals on the floating Euribor. Kallas stressed that Estonia must shift from a model based on cheap labor and resources toward innovation and structural changes, citing the timber sector’s reliance on inexpensive resources from Russia and Belarus as a key example. Kallas enumerated the government’s measures aimed at stimulating the economy, including investing 1.9 billion euros into the economy, implementing renewable energy reforms to reduce electricity prices, cutting bureaucracy, and supporting innovation. Responding to Aleksandr Tšaplõgin’s question about the impact of tax hikes, Kallas emphasized that the government plans to lower labor taxes in 2025 and that, even after the changes, Estonia’s overall tax burden will remain among the lowest in the European Union. She affirmed that the income tax exemption for reinvested profits will remain in effect, thereby safeguarding Estonia’s competitiveness.
Decisions Made 1
No decisions were made
Esimees Lauri Hussar
AI Summary
Riigikogu member Andres Metsoja is submitting a question to Prime Minister Kaja Kallas concerning the competitiveness of the economy.
Andres Metsoja
Profiling Isamaa fraktsioonAI Summary
The report emphasizes that the Estonian economy urgently requires clear economic policy decisions and an effective industrial policy in order to balance the budget, promote investment, streamline permitting processes and resource availability, and thereby strengthen competitiveness and relaunch the economy.
Peaminister Kaja Kallas
AI Summary
Prime Minister Kallas stated that the Estonian economy is currently struggling and relies heavily on the economies of the Nordic countries and Germany. However, the prospect of recovery hinges on falling energy prices and structural reforms. She noted that the economy must focus on three pillars: cheap labor, cheap resources, and innovation. Although Estonia is no longer a country defined by cheap labor or resources, the timber sector is being impacted by restrictions, and the direction of future growth will be determined by the Industrial Policy 2035 and the adaptability of businesses.
Esimees Lauri Hussar
AI Summary
Next up is a clarifying question, which will be asked by Andres Metsoja.
Andres Metsoja
Profiling Isamaa fraktsioonAI Summary
Andres Metsoja said that there is no easy solution for restarting the economy, and a cross-parliamentary agreement is necessary, involving both the opposition and the coalition, to address energy prices, capital outflow, and investments, and thereby restore the confidence of entrepreneurs in Estonia.
Peaminister Kaja Kallas
AI Summary
Prime Minister Kaja Kallas stressed that 1.9 billion euros will be channeled into the Estonian economy next week, and the money must quickly reach critical sectors so that support goes where the need is greatest, and that these measures are designed to ensure they reach their intended destination. At the same time, cooperation must be established with the opposition on the topics of renewable energy, energy networks, and electricity prices. Laws reducing bureaucracy will help companies focus their activities on increasing revenue. National export and business delegations open up new opportunities, and entrepreneurs are invited to participate. Investing in innovation constitutes the three key pathways for the economy, where the state and businesses are moving toward the two percent club and innovation phases are being developed.
Esimees Lauri Hussar
AI Summary
The speech emphasizes that now is your time.
Peaminister Kaja Kallas
AI Summary
Prime Minister Kaja Kallas emphasizes that raising it to the level of innovation is possible, and that it is something that could be done.
Esimees Lauri Hussar
AI Summary
Chairman Lauri Hussar thanks [the previous speaker] and asks Aleksandr Tšaplõgin to pose a follow-up question.
Aleksandr Tšaplõgin
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
Aleksandr Tšaplõgin asks whether the government realizes that the tax hike will further slow down economic growth.
Peaminister Kaja Kallas
AI Summary
Prime Minister Kaja Kallas stated that the income tax reform coming into effect in 2025 will reduce labor costs for businesses. Estonia's tax burden will remain among the lowest in the European Union, and companies will not face a separate corporate income tax, as the tax is only paid upon the distribution of dividends, which strengthens Estonia's competitiveness. However, the state cannot offer services at the Nordic level while simultaneously maintaining a significantly lower tax burden.
Esimees Lauri Hussar
AI Summary
He thanks everyone and announces that he is concluding the consideration of today's seventh question.