Vitsur: The state could sell bonds to people
13.05.2009, 15:19 Since Q1 15.6 pct economic downturn brings
threat that Estonia may have to use additional resources then the state could
sell bonds to people, Heido Vitsur, an economy expert at Estonian Development
Fund told ERR News.
The recovery will happen later and be more difficult in case additional
resources aren’t used. It’s possible to get additional money by bringing foreign
investments or borrowing, Vitsur said.
One possibility is to use people’s savings.
“Creating such situation where people have the interest and certainty to
invest their billions from accounts to Estonian economy. There are tens of
billions which can’t be used,” he said.
It’s possible to invest people’s money everywhere. One possibility is
infrastructure.
“The state could sell bonds to people who are worried about their money and
with such yield that people are willing to buy,” Vitsur said.
“And the state could invest in infrastructure. Doesn’t matter, whether
repairing schools or streets, it’s a thing that must be done anyway. When we let
them decay during the crisis, then renovating is expensive afterwards,” Vitsur
said.
He said that the state is able to sell bonds after it gives up its aim of
keeping budget deficit under 3 pct of GDP, which is necessary to join euro.
“I’ve talked all the time that euro is a necessary and good thing, but most
important is to come out of the crisis alive, as fast as possible and with
smallest losses. All Western advisers have hinted that euro can’t be our main
goal. It is important, but that we wouldn’t miss euro and economic growth by
chasing it blindly,” Vitsur said.