Estonia Central Bank Should Manage State Reserves
Estonia’s central bank should be entrusted with managing the Baltic country’s government-sector reserves, a spokeswoman for Prime Minister Andrus Ansip said.
The Finance Ministry said this month that it plans to consolidate the management of all state institutions under the Treasury from 2012, eliminating the government’s need to borrow elsewhere until 2015. Ansip suggested today all government- sector reserves could be managed by the central bank, Ansip’s spokeswoman Liina Kersna said by phone from Tallinn today.
The central bank’s reserves “have declined significantly since Estonia joined the euro,” Ansip said in parliament earlier today when asked by lawmakers to explain plans to consolidate reserve management under the Treasury. It would be “sensible” to manage the state’s assets centrally,” he said.
Liquid government assets, including health and unemployment insurance funds not managed by the Treasury, were 1.73 billion euros ($2.36 billion) at the end of 2010, equivalent to 12 percent of gross domestic product, according to the Finance Ministry’s website.
“It’s certainly possible for the central bank to provide a service to the government by managing state reserves in case there is such a request,” central bank spokesman Viljar Raask said in an e-mailed comment today. “Eesti Pank supports the Prime Minister’s view that Estonia’s state reserves should be managed effectively.”
Consolidating reserves under the Treasury would cut the planned state debt to 5.3 percent of GDP by 2015 from an April forecast of 11.8 percent, the ministry said Sept. 7.
To contact the reporter on this story: Ott Ummelas in Tallinn at firstname.lastname@example.org
To contact the editor responsible for this story: Balazs Penz at email@example.com