Employers: Estonia needs health-care cuts for euro-entry

27.10.2009, 14:42

Estonia needs to cut health-care spending to meet the Baltic country’s goal of euro entry by 2011, the nation’s main employers’ lobby said, Bloomberg reports.

Government officials and the International Monetary Fund say keeping the budget deficit, which includes the public health insurance fund’s balance, below the European Union’s 3 percent of gross domestic product ceiling is the main challenge for euro entry. Medical unions oppose any cuts, saying it worsens health- care availability and forces doctors to emigrate.

“Those demanding additional health-care financing don’t realize that this will threaten fulfilling the euro-entry criteria,” Tarmo Kriis, chairman of the Estonian Employers’ Confederation, said in a statement today.

Estonia, mired in the third-worst recession in the European Union, has cut its 2009 budget by 9 percent of gross domestic product as it looks to become the next nation to swap its currency for the euro. The government hopes the move will bolster investor confidence and boost trade by eliminating currency risks for companies.

The board of the Estonian Health Insurance Fund, a public body which pays hospitals for services with tax receipts, yesterday decided to cut prices for medical services by 6 percent from Nov. 15, citing a projected decline in tax revenue next year.

The measure will require hospitals to cut wages of doctors and other personnel by about 12 percent, bringing the total wage reduction this year to 22 percent, the newspaper Aeripaeev cited Peeter Mardna, a board member of the Ida-Tallinna Keskhaigla hospital, as saying.

“The cut isn’t anything extraordinary considering the private sector has cut personnel costs by as much as a third,” Kriis said.

The International Monetary Fund said yesterday the euro goal is “within reach,” urging the government to further trim the 2010 budget to ensure meeting EU terms for euro candidates.