Foreign Financing

The Republic of Estonia has received since regaining independence foreign assistance worth of billions of euros. The Ministry of Finance is responsible for financial management of this assistance. Today, majority of the assistance is received through EU regional policy instruments, but also the Norwegian and EEA Financial Mechanisms, Estonian-Swiss Cooperation Programme and others are available.

The Republic of Estonia is receiving foreign financing from following sources:

Structural Assistance is allocated by the European Union to Estonia for the purpose of supporting development of the economy in Estonia, thus reducing development differences between European regions and increasing the competitiveness of the European Union as a whole in the global market. During the period of 2007-2013 Estonia can use funds in the amount of € 3.4 billion, i.e. nearly twice as much per year as in previous years.

The European Territorial Co-operation objective is financed by the European Regional Development Fund (ERDF) and supports cross-border, transnational and interregional co-operation programmes. The budget of € 8.7 billion for this objective accounts for 2.5% of the total 2007-13 allocation for cohesion policy, including the allocation for Member States to participate in EU external border co-operation programmes.

The purpose of the Financial Mechanisms is to contribute to the reduction of social and economic disparities in Europe, and to support the new EU member states in their efforts to participate fully in the enlarged internal market. For Norway it is also an important goal to strengthen bilateral ties with the beneficiary states. In Estonia, the Financial Mechanisms will provide a total of € 32,760,000 during the period 1 May 2004 - 30 April 2009. For the period of 2009-2014 the support allocated to Estonia is € 44.6 million.

According to the Framework Agreement most of the contribution will be directed to regional programmes which aim is to create healthier living environment in Estonia. In 2007-2012 Estonia shall be provided with 4% of the whole contribution i.e. 39,92 million Swiss francs (ca € 24 million depending on the exchange rate).

The Phare programme was one of the three pre-accession instruments financed by the European Union to assist the applicant countries of Central and Eastern Europe in their preparations for joining the European Union. The 10 new Member States that joined the EU in 2004 received a Transition Facility in 2004-2006.

In the budgetary period of 2007-2013 Estonia can use approx. € 175 million from the funds of the European Agricultural Fund for Rural Development (EAFRD) in order to support rural life and agriculture. Estonia will be able to support the fisheries sector with the help of the European Union with nearly € 105 million.