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Estonian Employers Reject Ministry Plan to Consolidate Reserves

Sept. 22 (Bloomberg) -- An employers’ lobby rejected a proposal to consolidate reserves of the Estonian Unemployment Insurance Fund under the management of the State Treasury, claiming the fund could become unable to fulfill its tasks.

The Finance Ministry said this month it plans to consolidate the management of all assets of state institutions under the Treasury from 2012, eliminating the government’s need to borrow elsewhere by 2015.

The fund’s assets could be transferred to the Treasury only if the parties involved sign a loan agreement which would require negotiations between the board of the fund and the Finance Ministry, as well as amending the unemployment insurance law, the council of the Estonian Employers’ Confederation said in an e-mailed statement today.

Consolidating reserves under the Treasury would cut the planned state debt to 5.3 percent of gross domestic product by 2015 from an April forecast of 11.8 percent, the ministry said Sept. 7. Estonia had the lowest level of public debt in the 27-member European Union last year, at 6.6 percent of GDP.

To contact the reporter on this story: Ott Ummelas in Tallinn at oummelas@bloomberg.net

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net

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