Non-euro area main issue for Estonia in EU banking union - finmin

Photo: Toomas Huik

 With regard to the European banking union, the biggest question mark for Estonia is the relation between the eurozone and the non-euro area, in particular Sweden, Finance Minister Jürgen Ligi says.

"There are disagreements between countries on the topic of the banking union, Germany for instance wants the underlying treaty changed," Ligi told reporters on Monday.

In Ligi's words, the German rhetoric on amending the underlying treaty is very strong whereas the European Commission sees no need to change the treaty. "The debates on the necessity of changing the treaty may drag out the process," he said.

In the finance minister's view there is no need for Estonia to get passionately involved in the banking union issue right now. Sweden with which Estonian banking is very closely connected also has softened its rhetoric on the theme, he said.

So, the main question for Estonia is, how will the non-euro area in general and first of all Sweden be related to the banking union, Ligi said. "The tiny Nordic-Baltic banking union has worked very well thus far," he observed.

At their weekend meeting eurozone finance ministers also approved the 10 billion euro economic adjustment program for Cyprus.

In Ligi's view, the 10 billion to be given to Cyprus is a "very big sum" for a small economy.

"The Cyprus aid package is of course designed so as to rule out the need for further assistance, but at the same time we're not clairvoyant. Cyprus is not poor, it has assets with which to sustain its economy," the minister said.

The finance ministers did not discuss Slovenia this time around, he said. "They've pledged to make it on their own. Their debt burden is not big in itself, what they seem to be short of is the courage to make decisions."