The European Commission finds in its assessment report published on Wednesday that Estonia had only partially complied with concrete recommendations that were issued to EU countries for better co-ordinating their economic policies.
Estonia received a total of four recommendations last year from the Commission.
In terms of the State budget, Estonia has strayed from the course of keeping the budgetary deficit at the level of 2.1% of GDP in 2012. Instead, the European Commission predicts that the country’s deficit will be 2.6% of GDP, which is also above the deficit target set by the Commission in its spring outlook. The objective of reaching structural surplus by the year 2013 has been replaced with the goal of achieving a structural balance. Hence, Estonia has only partially adhered to the recommendations issued a year ago.
The same was the Commission’s assessment on the labour market policies. The Government of Estonia has taken a number of steps to lower labour taxes, but there are shortcomings in active labour market policy – the country has not addressed the issue of benefits for incapacity for work sufficiently: the number of people who need benefits has grown while there is not much success in bringing those people back to the labour market. The Commission reiterated its recommendations to Estonia in this area as well.
In energy policy, Estonia has failed to stimulate individuals to prefer public transport to personal vehicles and the trend in Estonia tends to go the other way. The Government’s excise duty policy has also appeared to be insufficient for affecting consumers’ behaviour. Estonia ranks first in the EU in terms of vehicles’ energy consumption.
In the field of education, the Commission admitted that the quality and accessibility of vocational education has improved and the number of people involved in life-long learning is growing as well, but not enough attention has been paid to low-qualified workers. Reform of secondary schools will have to be implemented faster as well.
In its recommendations to Estonia, the European Commission proposes that Estonia continue with the administrative reform in order to guarantee better access to public services on the local level.
The Commission also estimated that the reform would help optimise relatively fragmented resources of local governments.
It was noted that currently, local governments have difficulties in guaranteeing social welfare, healthcare and education services to all of their residents; they appear to be too small in order to meet the obligations set upon them by law.
The European Commission estimated, however, that there is currently no political support for an administrative reform in Estonia that would reduce the number of local governments.