“We have entered an economic crisis, now we have to focus on minimizing the crisis and surviving”, said Estonian Finance Minister Martin Helme said on the “Esimene stuudio” (“First Studio”) program of public ETV television on Tuesday night.
“The tale that figures tell us is that we haven’t had such steep falls since 2008. And this is with consequences for the real life. The balance sheet value of businesses is declining steeply and banks are beginning to recall loans or demand additional guarantees. The businesses that finance themselves through refinancing of bonds cannot do it,” Helme said, describing the impact of the coronavirus and the oil war on the economy, reported The Baltic Course.
“Both the global economy and European economy are under a bigger debt burden now than they were ten years ago. Unemployment is higher. Competitiveness is weaker than it was before the crisis of 2008. It used to be said that we’re in for a gentle decline. Now the bubble has burst with a bang instead,” Helme said.
“When there is a decline, you do have the right to spend more, go more into the red with the budget,” said Helme, who has previously said that the current Estonian government will face off the new crisis not saving, but spending.
Helme advocated additional borrowing to address the country’s financial problems. “This we can do right away — it’s like an invigorating injection into a vein. No matter on what scale we make it — 100, 200, 500 mln — it will reach the economy right away,” he said.
“This way of thinking that there used to be ten years ago — that balance of the budget is paramount, for it [the budget] to not go into the red — is totally alien for the present government. There definitely isn’t going to be any frenzied cost-cutting,” the minister said.