Estonian lawmakers locked in debate over EU fund

(TALLINN) - Estonia's parliament will have to approve individual payouts to countries from the EU's European Financial Stability Facility, under a new draft put before lawmakers Thursday.

MPs in the Baltic state, which adopted the euro in January this year, have spent days debating the country's participation in the boosted, 440-billion-euro crisis fund.

It remained unclear whether they would vote Thursday. All 17 eurozone nations have to sign off on the EFSF, created in July in the face of the currency bloc's debt crisis, where Greece is in the eye of the storm.

On Monday, Estonia's ombudsman had warned that its participation in the EFSF could be unconstitutional as formulated because it left the power to decide in the hands of the government, not lawmakers.

"We decided to change the draft bill so that the applications of all states that seek help will be sent to our parliament," said Sven Sester, head of the chamber's finance committee and an MP with the ruling Reform Party on Thursday.

"That will be in line with our constitution, which sets down that only parliament can take on financial obligations for the state," he added.

Estonia's participation in the eurozone rescue fund would amount to some 1.995 billion euros ($2.7 billion).

Reform Party Prime Minister Andrus Ansip's centre-right governing coalition, which backs participation in the rescue fund staunchly, commands a majority of 56 seats in the 101-member parliament.

But the prospect of the currency bloc's newest member -- which has a reputation for prudent fiscal policies -- having to pour money into the fund has sparked increasing debate in former Soviet-ruled nation of 1.3 million even in the government camp.

"It is very hard for me, and for all of us, to explain to Estonia's inhabitants who earn many times less why we should support citizens from EU countries where people earn 2,500 or 2,600 euros a month," Reform party MP Tarmo Leinatamm told parliament Thursday, stressing that the situation Greece has found itself is the result of its own actions.

Juku-Kalle Raid, an MP from the coalition's junior party, Pro Patria and Res Publica Union, opted for far sharper language.

"I think I will vote against it. It is really strange that Estonia, where incomes are lower than in Greece even after its cuts, should pay for these lazy losers," Raid said.

The government has insisted that joining the EFSF is a matter of European solidarity, a key issue for Estonia, which won independence from the crumbling Soviet Union in 1991 and joined the EU in 2004.

It has also said that the EFSF is crucial to protect Estonia from potential global financial problems.

Estonia has emerged from a deep 2009 recession sparked by the global crisis, during which it launched a biting austerity drive.