Download As the only country in the European Union who was able to report a

2nd Main Committee: Economic and Financial
Topic: International Debt Crisis
Country: Estonia
Delegate: Monroe High School, Rachel Wellnitz
As the only country in the European Union that was able to report a budget
surplus this past year, something can be learned from the economic climate of Estonia.
Although they do not see themselves as role models for other countries, they definitely
have the statistics to be one. Estonia has a modern, market based economy, with a probusiness focus. Their government tries their hardest to stay away from debt of any kind.
The past few years, Estonia has had balanced budgets which has led to their impressively
low public debt—5.8 percent of their GDP, and going down.
Being a part of the European Union, Estonia has plenty of interest in the
International Debt Crisis. The union’s debt is currently 87.4 percent of their GDP, with
countries like Portugal and Ireland who have reported debts of over 100 percent.
Knowing how much of a crisis Europe has faced in 2011 due to debt, things are still not
looking up. 2012 is expected to get even worse.
Estonia has a system in which they adapt a “budgetary framework” every seven
years. As the new period begins in 2014, the planning for this new budget has already
begun. They are focusing on energy, the promotion of their internal market, economic
growth, and general financial reform. In light of the crisis being faced by many European
countries, Estonia has been putting extra, international thought into this budget. They
believe in supporting development and economic growth, in addition to a knowledgebased economy.
Although Estonia is one of the smallest and newest countries to join the European
Union, it does not hesitate to be a part of the debt solution. Estonia’s economic minister,
Juhan Parts says, “Small countries need to be effective in acting on the center of large
innovation and enterprising to work together”. For example, joining the European Union
in 2004 had a substantial impact on both the country and the union. Becoming a part of
the EU “helped reassure investors, attracting capital, boosting exports, and creating jobs”
(Wellisz). Like many other countries in Europe, Estonia is against increasing the budget
of the union. Essentially this would mean governments already pressed to make financial
reductions would need to find even more cuts to make. However, Estonia does support
the bail-outs of Greece, Portugal, and Ireland. As their Prime Minister Andrus Ansip
states, “That’s Life. When somebody has big difficulties, their friends have to help.”
In addition to the actions already taken to resolve the International Debt Crisis,
Estonia supports a proposition for a “Europe-wide tax”. This tax would reduce each of
the country’s contribution to the European Union’s budget. Another benefit of a tax
would be a strengthened union with increased solidarity.
Estonia is hoping to improve the financial standing of the European Union
through balanced budgets, potentially increased taxes, and cooperation between the
countries within the union. In order for this International Debt Crisis to be solved, many
members of the EU, the United Nations, and the rest of the world must pitch in and do
their share to turn things around.
Works Cited
"Estonia in the EU." Estonian Embassy in UK. Estonian Embassy in London, 2 Oct.
2012. Web. 19 Feb. 2012. www.estonia.gov.uk
"European Debt Crisis - The New York Times." Times Topics - The New York Times.
The New York Times, 13 Feb. 2012. Web. 19 Feb. 2012.
http://topics.nytimes.com
Wellisz, Christopher. "Estonia Benefits From Euro Amid Sovereign Debt Crisis, Prime
Minister Says - Bloomberg." Bloomberg - Business & Financial News, Breaking
News Headlines. N.p., 22 July 2011. Web. 18 Feb. 2012.
www.bloomberg.com/news/