Estonian European Semester to foster the Economic and Monetary Union

The strength of the EMU depends on the financial discipline. It is very important that the member states follow the rules we have already agreed upon for the EMU. It is also essential to use all of the opportunities afforded by coordination procedures,” said Minister Toomas Tõniste, Finance Minister of Estonia, in Tallinn.

Valdis Dombrovskis, European Commission Vice-President for the Euro and Social Dialogue, also in charge of Financial Stability, Financial Services and Capital Markets Union, met with Minister Tõniste. Vice-President Dombrovskis and Minister Tõniste focused on the matters of deepening the Economic and Monetary Union (EMU), a topic that Estonia hopes to achieve good progress in during the Estonian Presidency of the Council of the European Union. They also discussed overall economic developments in the context of European Semester and Estonian performance.

“We should use this window of political and economic opportunity. This is a good moment to put in place the remaining elements of a well-functioning EMU,” said Valdis Dombrovskis at the meeting. “It is better than waiting for a new crisis to complete the work. The European Commission is taking the initiative in this discussion: certain options were outlined in a reflection paper in May; President Juncker elaborated on some of these ideas in his State of the Union speech last month; and we will come with specific proposals on the 6th of December”.

Minister Tõniste stressed that EMU plays an important part in strengthening the European finance sector and in harmonising member states’ economic development.

For economic developments in the context of European Semester and Estonian performance Finance Minister Toomas Tõniste said: “Estonia’s economic growth has gained speed due to the recovery in Europe. I also welcome increased business confidence and the pickup in investments that will allow rewards from the favourable developments in European markets. However, an accelerated growth rate should not lead to excessive increases in government expenditure.”

Vice-President Valdis Dombrovskis added that the Estonian economy is well on track. We see strong economic performance. Both the employment rate and the labour force participation are highest in 20 years. GDP growth is revised up to 4.3% for this year, according to government estimates. The Commission will issue its forecast next month, and we expect these to also point out a strong economic performance. However, in good times it is also important to maintain fiscal discipline in order to ensure stability in a long term”.

Minister Tõniste and Vice-President Dombrovskis discussed how Estonia could hold on to its economic momentum. They also focused on how Estonia could achieve good progress with EMU during the last months of its Presidency. As Banking Union is of the cornerstones of the EMU, Estonia hopes to reach to Council’s general approach on the risk reduction package by the end of the year. This would allow proceeding with the negotiations of the European deposit insurance scheme (EDIS).

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