Estonian government announces €2 billion stimulus package

Due to the coronavirus crisis, the Estonian government on Thursday announced it will support the local economy with a package worth at least €2 billion.

“The spread of the coronavirus and its prevention measures will have a very significant impact on the economy. Taking this into account, the government today approved a package of economic measures to mitigate the situation for workers and businesses in Estonia,” the government said in a statement. The amount represents nearly 7% of Estonia’s GDP.

“The aim of the measures is to mitigate the most difficult initial stage of the crisis in order to support and protect Estonian working people and businesses,” the country’s prime minister, Jüri Ratas, said. “The state will do everything in its power to ensure the functioning of the Estonian economy in exceptional circumstances,” he added.

The state will support local companies through the KredEx Foundation and the Estonian Rural Development Foundation.

The package also includes labour market support of the Estonian Unemployment Insurance Fund, sickness benefits (from March to May, the government will compensate the first three days of sick leave for all incapacity leave applications) and tax incentives. “The package allows for deferral of tax debt for 18 months, temporary suspension of second pillar pension scheme payments, as well as partial compensation for direct costs of cancelled events,” the government said.

For the latest developments in Estonia, follow our special blog on coronavirus.

The cover image is illustrative (Shutterstock).

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