Tallinn tries to take another big loan
31.07.2009, 11:03
Tallinn plans to issue bonds in amount of
EEK 100 mln, Eesti Päevaleht reports.
Jürgen Ligi, the Minister of Finance, said that if Tallinn issues bonds in
that amount then the state gives less tax money to the capital.
On Monday Ligi sent a letter to Edgar Savisaar, the Mayor of Tallinn, warning
him from planned bond emission.
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“The City of Tallinn has issued a bond emission prospect to Swedbank on June
29, confessedly to the Ministry of Finance,” Ligi wrote, adding that the planned
emission is not in accordance with the laws.
New Rural Municipality and City Budgets Act came to force from March 1 and it
says a local municipality can’t take a loan without Ministry of Finance’s
permission. Mainly European projects can get that permission.
“We suggest that the city government shouldn’t organize bond emission in
cooperation with Swedbank,” the Minister wrote, adding that the Ministry may use
its right to retain means of payment in the same amount.
Tallinn’s loan burden made up 55 pct of budget volume on June 1 and when to
consider negative supplementary budget, then 60 pct. Loan burden couldn’t exceed
60 pct of budget volume even in the good times.