The European Commission judges Estonia's economic policy to be on the right track and the plans mapped out in the stability program and competitiveness plan, to be in agreement with the Commission's recommendations.
European Commission advises Estonia to stick to previous fiscal policy
29th May 2013, 19:30
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The Commission's view is that the macroeconomic scenario underpinning the budgetary projections in the stability program is realistic in 2013-2014 when real gross domestic product growth is expected to average around 3.3 percent.
The Commission notes Estonia's achieving a better than expected general government budgetary position, faster drop in unemployment, progress with the education reform, and considerable investments into energy efficiency. Nonetheless, it points at the necessity of further labor market, education and energy-related measures, the Finance Ministry said.
The EU executive recommends that Estonia take action in the 2013-2014 period to pursue a growth-friendly fiscal policy and preserve a sound fiscal position, ensuring compliance with the medium-term budgetary objective. It also recommends to improve incentives to work, the provision of social services and the existing social benefit systems.
Estonia is advised to continue efforts to improve its education and training systems to bring them into keeping with labor market needs. Another recommendation is to improve energy efficiency and strengthen environmental incentives by considering car taxation and higher excise duties on motor fuels.
The Commission also deems it necessary to better balance local governments' revenues against the responsibilities laid on them.
On the whole, Estonia is seen to have made progress during the past year in all fields brought to the country's attention last year.