Budget, Economics, Estonia, EU – Baltic States, Financial Services, Transport

Jyrki Tapani Katainen and Andrus Ansip. Tallinn, 24.04.2012. Photo: valitsus.ee

Both countries have common interests in the Baltic Sea region and the European Union, the leaders noted.

Finland and Estonia have also had a similar approach to the eurozone's problems. Ansip and Katainen said they agreed that Estonia and Finland have been on the right track with their economic and financial policy.

The Estonian and Finnish prime ministers said they were pleased with trade relations between the countries, which continue to become even closer.

"Finland is Estonia's biggest import partner and second largest export partner," said Ansip.

"As a result we are very interested in seeing our northern neighbors do well," Ansip noted.

Prime Minister Katainen said the interest was mutual: "More and more Finnish business people have come to Estonia, and this is a testament to the credibility of your country in the eyes of foreign investors."

Discussing matters related to the European Union's new budget, Ansip said Estonia was satisfied with the European Commission's proposal regarding the volume of the financial framework. Ansip said the European Union budget consists largely of investments aimed at the future and raising competitiveness.

"I am also glad to see developments in the principles of Cohesion Policy," Ansip added. "Estonia supports the proposals of the Commission to apply stronger conditionality. A well-ordered state of public finances creates the preconditions for achieving the desired objectives with European Union resources."

Ansip added that Estonia did not favor setting a cap on the absorption of EU cohesion funds at 2.5% of the gross domestic product (GDP). Estonia, Latvia and Lithuania have made a proposal that the level be raised for countries which have a high capacity for using the aid and experienced a deep recession.

Anther difference of opinion related to the EU budget pertains to agricultural subsidies, Ansip said. He said Estonia seeks equal treatment in this area.

Ansip and Katainen also devoted thorough discussion to regional themes, especially matters related to energy and transport. Ansip explained that Estonia's goal was a properly functioning Baltic Sea electricity market. Estonia has also taken legislative steps to improve the natural gas sector.

"Reorganizing the gas market is necessary for ensuring competition," said Ansip. "If the relative importance of gas in the energy consumption of the two countries increases and new sources of supply are added, a potential Estonian-Finnish gas pipeline will become ever more relevant."

The leaders also touched on the Rail Baltic project. The prime ministers expressed support for the development of the project, noting that infrastructure ensures greater trade and passenger volumes, which in turn serves as an economic stimulus.

Prime Minister Katainen took an interest in the planned public procurement for new trams. Ansip said the procurement would be fair and transparent and said all prospective participants were welcome.