On Monday, 20 April, Head of the Economics Department of Eesti Pank ÜLO KAASIK gave a presentation at the press conference of the Organisation for Economic Co-operation and Development (OECD), where he said that in order to maintain its credibility, Estonia will have to gradually start improving its fiscal position and move towards restoring fiscal reserves.
"We agree with the OECD's report on Estonia's economy in that our main challenge is to return to a sustainable and efficient growth path. In this context, the country's fiscal policy, the reliability of the banking system, a flexible labour market, and Estonia's accession to the euro area are of vital importance. It is important to bring public finances in line with the changed economic environment, and the national budget strategy, which is to be reviewed this spring, is expected to answer the question when Estonia will regain balance between consolidated budget revenue and expenditure and start restoring its fiscal reserve."
Kaasik said that the clear perspective of adopting the euro increases markedly Estonia's credibility and serves as the main factor supporting our economy in the near future. "In order to join the euro area, our this year's and next years' consolidated budget deficit must definitely be below 3% of GDP. The objective of adopting the euro needs to be borne in mind when planning any economic policy measures," Kaasik added.
