Postimees Digest, Wednesday, August 21

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Photo: Toomas Huik

Central bank to adopt tasks of budget watchdog.

The Ministry of Finance is working on an amendment to the State Budget Act that aims add to the central bank's list of tasks responsibility for delivering impartial, regular and extensive analyses of macroeconomic and fiscal forecasts in line with a corresponding EU directive. According to the latter, analyses need to be carried out by a body that is independent of budgetary agencies of Member States and that the independent fiscal council must adhere to the fiscal balance rule. The finance ministry finds that as it is insensible for Estonia to create a new unit to handle the said tasks and because the European Commission agreed that Member States are not obligated to create separate institutions to handle them, the bill would propose the Bank of Estonia be put in charge. President of the Bank of Estonia Ardo Hansson said that the institution is willing to commit to the work and that in his mind it would offer its opinions in thee areas: 1) macro-forecasts fiscal policy is based on: 2) goals of the structural fiscal position of the government sector as reflected in the fiscal strategy and stability program, based on national budget rules; 3) compliance with fiscal policy goals in the previous fiscal year. The central bank would also be responsible for signalling the need for the adjusting mechanism to be implemented in case of deviation from set goals.

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