1. Estonia's investment needs in
2014-2020
Commission Services' analysis
24.05.2013, Tallinn

2. Content:
I. Background and timetable
II. Common strategic framework, Partnership Agreement and
programmes
III. Economic situation and challenges
IV. European Semester 2012-Recommendations for Estonia
V. Funding priorities
VI. Succes factors
Content - Slide 2/27

3. Background
Commission's analysis brought together in Position
Paper for negotiations of the 2014-2020 European
Structural and Investment Funds
Pro-active approach: early stage information on
Commission services' position on 2014-20 priorities to
Member States
Framework for dialogue between Commission services
and Member States
Closer alignment with EU2020 strategy and Country
Specific Recommendations (National Reform
Programmes)
I. Background and timetable - Slide 3/27

4.  ESIF - stimulating smart, sustainable and inclusive growth in order to
achieve EU2020 objectives
 Concentrate future EU spending on priority areas
 Prioritisation and orientation of results (e.g. ex-ante conditionalities)
 The macro-regional strategy for the Baltic area – integral part of
programming for the next period
I. Background and timetable - Slide 4/27

5. Timetable
Informal
dialogue with
all Member
States
I. Background and timetable - Slide 5/27

6. THE COMMON STRATEGIC FRAMEWORK
ERDF, ESF, CF, EAFRD, EMFF
THE PARTNERSHIP AGREEMENT
ERDF, ESF, CF, EAFRD, EMFF
National level Rural development
programmes
(EAFRD)
EU level
National level
Operational Programmes
for ERDF, ESF, CF
(can be 1 multifund OP)
Operational
Programmes for
(EMFF)
II. Common strategic framework, Partnership Agreement and programmes - Slide 6/27

7. Economic situation in Estonia
III. Economic situation and challanges - Slide 7/27

8. Europe 2020 headline targets for Estonia
Europe 2020 headline targets Current situation in Estonia National 2020 target in the NRP
3% of EU's GDP to be invested in research
and development
1.42 % of GDP in 2009, 1.63 % in 2010
(0.81 % public, 0.82 % private)
3 %
20% greenhouse gas (GHG) emissions
reduction compared to 1990
+6 % non-ETS emissions (2010 compared to
2005). Based on current policies, it could reach
+12 % in 2020, compared to 2005
+11 %
(nationally binding target for non-ETS
sectors compared to 2005)
20% of energy from renewables 23 % in 2009, 24 % in 2010 (Eurostat) 25 % in 2020 (RES Directive target)
20% increase in energy efficiency GIC = 6.07 Mtoe (2010) (Final Energy
Consumption = 2.90 Mtoe in 2010)
Primary Energy Savings = 0.75 Mtoe
(Final Energy Consumption = 2.90 in 2020)
75% of the population aged 20-64 should be
employed
66.4 % in 2010, 70.1 % in 2011 76 %
Reducing early school leaving to less than
10%
13.9% in 2009, 11.6% in 2010, 10.9% in
2011
9.5 %
At least 40% of 30-34 years old completing
tertiary or equivalent education
35.9 % in 2009, 40 % in 2010 40 %
Reducing the number of people at risk of
poverty or exclusion by at least 20 million in
the EU (compared with 2008 levels)
17.5 % in 2010, 58 000 people in 2009 15 %
III. Economic situation and challanges - Slide 8/27

9. Challenges for Estonia I
Insufficient participation of private sector in
research and innovation and inadequate
competitiveness of SMEs
•1.63% of GDP on R&D (0.82% private)
•Fragmented R&I system, lack of focus
•Only a fraction of companies innovate
•Business-academia co-operation not strong enough
•Improvements in competitiveness required to foster
exports
III. Economic situation and challenges - Slide 9/27

10. Challenges for Estonia II
Insufficient infrastructure endowment
•Missing north-south infrastructure
•Inadequate quality of road and rail
•Lacking intermodal connection points and integrated
systems
•Interoperability of transport systems and hubs
•Outdated energy distribution network
III. Economic situation and chellanges - Slide 10/27

11. Challenges for Estonia III
Skills mismatch, high unemployment of vulnerable groups
and low-skilled people, varying capacity of local
governments in providing public services
•Decreasing population =>insufficient labour supply in longer term
•High youth unemployment
•Increasing long-term unemployment
•Skills mismatch and lack of skilled labour force
•Low participation rate in lifelong learning, in particular for low-skilled and
older people
•Low coverage of ALMP measures => low effectiveness of ALMP
•Varying capacity of local governments in providing public services
III. Economic situation and challenges - Slide 11/27

12. Challenges for Estonia IV
High energy intensity and gaps in relation to EU
environmental targets
•Low energy efficiency performance at sector level
•Only 0.2% of energy in transport from RES, shift from
public transport to private cars
•Gaps in compliance with water and waste directives
•Biodiversity and sustainable use of marine resources
III. Economic situation and challenges - Slide 12/27

13. European Semester 2012
recommendations for Estonia
1. Preserve a sound fiscal position by implementing
budgetary plans as envisaged, ensuring achievement of the
MTO by 2013 at the latest, and compliance with the
expenditure benchmark. Complement the planned budget
rule with more binding multi-annual expenditure rules
within the medium-term budgetary framework, continue
enhancing the efficiency of public spending and
implementing measures to improve tax compliance.
IV. European Semester 2012 – Recommendations for Estonia - Slide 13/27

14. European Semester 2012
recommendations for Estonia
2. Improve incentives to work by streamlining the
social benefits system and increasing flexibility in the
allocation of disability, unemployment and parental
benefits, while ensuring adequate social protection.
Improve delivery of social services, while better
targeting family and parental benefits and removing
distortionary income tax exemptions related to
children. Increase the participation of the young and
the long-term unemployed in the labour market.
IV. European Semester 2012 – Recommendations for Estonia - Slide 14/27

15. European Semester 2012
recommendations for Estonia
3. Link training and education more effectively to
the needs of the labour market, and enhance
cooperation between businesses and academia.
Increase opportunities for low-skilled workers to
improve their access to lifelong learning. Foster
prioritisation and internationalisation of the
research and innovation systems.
IV. European Semester 2012 – Recommendations for Estonia - Slide 15/27

16. European Semester 2012
recommendations for Estonia
4. Improve energy efficiency, in particular in
buildings and transport, and strengthen
environmental incentives concerning vehicles and
waste, including by considering incentives such as
the taxation of vehicles. Foster renewable energy
use, including through upgraded infrastructure and
legislation. Continue the development of cross-
border connections to end relative market isolation.
IV. European Semester 2012 – Recommendations for Estonia - Slide 16/27

17. European Semester 2012
recommendations for Estonia
5. Enhance fiscal sustainability of municipalities
while improving efficiency of local governments
and ensure effective service provision, notably
through stronger incentives for the merger of or
increased cooperation between municipalities.
Relevant reform proposals should be put in place
within a reasonable timeframe.
IV. European Semester 2012 – Recommendations for Estonia - Slide 17/27

18. Funding priorities
1) Strengthening private research and creating an
innovation-friendly business environment
2) Upgrading infrastructure
3) Skilled labour force, better education, high
employment and inclusive society
4) Environment-friendly and resource-efficient
economy
There is no ranking in the presentation of the funding
priorities
V. Funding priorities - Slide 18/27

19. Strengthening private research and
creating an innovation-friendly
business environment (1)
• Foster prioritisation and internationalisation of R&I systems
• Develop R&I strategy for smart specialisation
• Identify the knowledge-intensive sectors on which to
concentrate public resources
• Optimise benefits of cooperation
• Current relative level of CSF investments is proposed to be
maintained, private investment should increase
V. Funding priorities - Slide 19/27

20. Strengthening private research and
creating an innovation-friendly
business environment (2)
• Enhance private research, development and
innovation activities
• Match transnational, national and regional R&I
provision to business demand
• Strengthen SMEs' competitiveness and facilitate their
access to finance and internationalisation, including
in agriculture and fisheries
V. Funding priorities - Slide 20/27

21. Upgrading infrastructure
• Provision of key transport and energy links reduces
isolation and boosts the economy
• Current level of CSF investments in this funding area
is proposed to be maintained
• Improve essential transport links, including moving
ahead with the Baltic-Adriatic Corridor, a key railway
project to implement the EU Strategy for Baltic Sea
Region
• Develop energy distribution networks
V. Funding priorities - Slide 21/27

22. Promoting employment and supporting labour mobility
• Access to employment for job-seekers and inactive people
• Support to self-employment, entrepreneurship and business
creation
• Active and healthy ageing
Enhancing access to affordable, sustainable and high-quality
services, including health care and social services of gener
interest
V. Funding priorities - Slide 22/27
Skilled labour force, better education, high
employment and inclusive society (1)

23. Investing in education, skills and lifelong learning
• Reducing early school-leaving and promoting good quality
education
• Enhancing access to lifelong learning (LLL), upgrading the skills
and competences of the workforce and increasing the labour
market relevance of education and training systems.
• Improving the quality, efficiency and openness of tertiary and
equivalent education with a view to increasing participation and
attainment levels
• Developing education and training infrastructure as regards pre-
school facilities and the secondary education sector restructuring
V. Funding priorities - Slide 23/27
Skilled labour force, better education, high
employment and inclusive society (2)

24. Enhancing institutional capacity and ensuring an
efficient public administration
Investment in institutional capacity and in the efficiency of public
administrations and public services with a view to reforms, better regulation
and good governance
• Increase the capacity of local governments to provide high-quality public
services and create incentives for closer cooperation in provision of public
services, in particular social and educational services.
• Strengthen the capacity to formulate policy and to make use of regulatory
tools to improve the business environment through a consistent use of
impact assessments, better involvement of stakeholders, administrative
simplification and reduction of burden on businesses, increased use of ICT
to support the regulatory reform.
V. Funding priorities - Slide 24/27
Skilled labour force, better education, high
employment and inclusive society (3)

25. • Shift to an energy efficient, low-carbon economy
• Address the remaining gaps in the compliance with
the acquis and the binding EU targets in the field of
environment (transport related air pollution, waste
hierarchy, waste water, drinking water)
• Further environmental protection in agricultural,
fisheries and maritime sectors
Environment-friendly and resource-
efficient economy
V. Funding priorities - Slide 25/27

26. Success factors
 Strategic, integrated, coordinated and coherent approach
 Targeted actions with measurable impacts, concentration
 Cooperation across regions, funds & strategies
 Ex-ante conditionalities, e.g.
• R&I strategy for smart specialisation
• National transport plan
• Strategic plan for aquaculture; data collection for
fisheries management and the implementation of a
Union control, inspection and enforcement system.
VI. Succes factors - Slide 26/27

27. •Thank you!