Tanel Kiik, Chairman of the Riigikogu Center Party faction
No one knows what the Reform Party’s plan, promised in 2006, looked like to bring Estonia to the top five richest European countries in 15 years. I doubt that such an agenda ever existed, and at least I hope that the current situation was not part of their plan. Estonia’s economy has been in decline for the fifth quarter in a row, but the government is as silent as ever. In reality, we are in a multiple crisis, which would need strong government intervention long ago.
In an open letter on July 20, I asked the Prime Minister what the government’s action plan is for restoring Estonia’s economic growth and overcoming the population crisis. Unfortunately, the answer is silence, and it seems that the government’s plan is to simply wait until the crises pass by themselves, instead of developing the support package necessary to revive the economy and come to the aid of Estonian families. Until then, saving a drowning person is only a matter for the drowning person.
Several economic experts expressed concern about the decline in Estonian GDP already last year. At that time, however, the Riigikogu election campaign was gaining momentum, and everything had to appear to be in “safe hands”. The politico-technological behavior of the Reform Party at the time can be understood if you know them, but it remains unclear under what pretext the government is ignoring the crisis now. In the old days, we at least pretended that we were looking for Estonian Nokia. Now there is no longer even a pretense that the government cares about the state of the Estonian economy and the competitiveness of companies. Everything negative happens as if by itself and inevitably, only positive things are the favor of the government, but good news is scarce.
The news that Silmet’s parent company started building a permanent magnet factory in Narva is a pleasant development, but let’s be honest – it came despite the government’s actions, not because of it. However, the Estonian supercapacitor manufacturer Skeleton builds its factories in Germany, because here the government does not make a value proposition for any company. Our prime minister and ministers are sitting on their thrones and waiting for the invitation to cut the ribbon, but until then the entrepreneur has to manage himself.
The role of smart industry in economic growth has been discussed at length. We have people with unused potential all over Estonia, who are ready to re-learn and work, but whose hometown does not have this opportunity. If someone dares to say that perhaps it would be conceivable to train employees with suitable skills on a national basis or to create a connection to green electricity with favorable conditions, then a record will be put up that there is no classic corporate income tax in Estonia, and it is shameless to ask for something in addition to that. Interestingly, the tax policy experiment made at the beginning of the century has remained without followers until now. In today’s world where every success story is copied, this rating speaks for itself.
On paper, we should have an exceptionally business-friendly government, but in reality we have tax increases, and the Prime Minister’s father is driving people crazy who are not excited about the unexpected car tax. If, in the opinion of the perfectly balanced President of the Republic, the nature and necessity of this tax has not been sufficiently explained so far, the messenger was immediately attacked. In reality, the government, which is completely alienated from the lives of ordinary people, has neither asked nor received a mandate from the people for large-scale tax increases or cuts in family allowances. Unfortunately, a number of short-sighted and social inequality-increasing decisions have been rammed through the parliament with votes of confidence in the government, and now the following are being forcefully imposed on the people.
The governing coalition of the Reform Party, Estonia 200 and the Social Democratic Party recently completed 100 days in office. Unfortunately, this time has been anything but positive for the Estonian state and people. By cutting family benefits and quickly pushing through large-scale tax increases, the government simultaneously exacerbated the demographic, economic and confidence crisis. The government’s actions so far have been amplifying the crisis, not solving it. In this regard, I guess you should be happy that the majority of the government has gone on a collective summer vacation, because you know what they will come up with when they return to work in the crazy autumn. Whether the government’s next victims will be the elderly, the disabled or some other vulnerable target group, we do not yet know. Harder times are unfortunately yet to come.
