Yesterday afternoon a working group led by Minister Juhan Parts gathered at the Ministry of Economic Affairs and Communications to discuss the state support package prepared by the Ministry for the financing of exports of Estonian companies. The total potential volume of business support activities reaches four billion kroons, including the direct financial contribution by the state to the extent of 1.2 billion kroons.
"We are certainly not looking for an opportunity to support uncompetitive or weak companies. We will support the exports and adjustability of viable companies and make efforts to find resources for the alleviation of credit problems that have appeared in business activities", said Juhan Parts.
Participants in the discussion acknowledged that the two main changes in the economic environment in the past year have been the weakening of demand and the decrease in the availability of capital, incl. loan capital. Although also positive signs can be seen in lending activities, there is still the risk that also viable companies may get into difficulties. Therefore it would be reasonable to keep access to loans on a level that would enable companies to cope with their current obligations, above all in export-oriented economic sectors.
The state can support financing providers by giving them sufficient assurance, by guaranteeing the commitments taken by banks, and can also support business activities by acquiring the necessary resources and directing them to businesses through banks.
It would certainly be necessary to enhance the existing business support programmes provided by the state: for investments in technology, for the exporting and marketing needs, start-up support, etc. It would be necessary to reduce bureaucracy and adjust the terms and conditions to changes in the economic situation.
At the same time, opportunities are sought for the solution of the credit problems faced by businesses. There are already four state support measures: loan guarantee provided by KredEx, capital loan, KredEx guaranteed start-up loan and short-term export guarantee with 90% coverage. As a new measure the state is considering the possibility to support the banks operating in Estonia to enable them to use state financing for the involvement of cheaper additional funds from financial markets for businesses, in comparison with the funds they currently get from their parent banks. Also the possibilities to provide additional export guarantees to companies and state refinancing of bank loans of specific exporting companies are considered for companies which have temporary difficulties and need to extend their existing loans or borrow additional funds, if the bank is not willing to do that.
It was agreed at the meeting to finalise the support programmes by February at the latest with the assistance of everybody present at the meeting, to enable the government to adopt a decision on the implementation of these programmes.
The following persons participated at the meeting: Aivar Rehe and Katrin Talihärm from the Estonian Banking Association, Ülari Alamets from Enterprise Estonia, Andrus Treier from KredEx, Enn Veskimägi and Toomas Luman from the Estonian Chamber of Commerce and Industry, Kersti Kraas, Ain Kabal, Kersti Kracht and Sven Sester from the Estonian Association of SMEs, Tarmo Kriis from the Estonian Employers’ Confederation, Veiko Tali from the Ministry of Finance and Keit Kasemets from the State Chancellery, and Juhan Parts, Marika Priske, Ahti Kuningas and Lauri Tammiste from the Ministry of Economic Affairs and Communications.
For further information:
Department of Public Relations
The Ministry of Economic Affairs and Communications
tel: +372 6 256 493;
mobile: + 372 502 8747
e-mail: kalev.vapper [at] mkm.ee