The Riigikogu updated the Accounting Act

The Act on Amendments to the Accounting Act and Amendments to Other Acts arising therefrom (516 SE), initiated by the Government, was passed. It transposes the European Union sustainability reporting directive. It also transposes a directive changing the size criteria for companies.

The Act amends national requirements in the preparation and auditing of annual reports of undertakings. As the emergence and scope of the sustainability reporting obligation depends on the size category of the company, the new thresholds for size categories are set at the highest level allowed under the Directive. The purpose of the Act is to keep the increase in the reporting burden due to the new requirements to a minimum in Estonia.

The updated requirements set an obligation for all large undertakings and listed undertakings to publish a sustainability report as part of their management report for the financial year and to prepare it in accordance with the European Sustainability Reporting Standard. In Estonia, the sustainability reporting obligation covers an estimated 300 companies and groups i.e. approximately 1.4 percent of the private limited liability companies and public limited liability companies operating in Estonia. An estimated third of them will be able to use the consolidation exception under which no sustainability report will need to be prepared if the same information has already been published in the parent company’s report.

Evelin Poolamets (Estonian Conservative People’s Party) took the floor during the debate.

On the final vote, 59 members of the Riigikogu supported the Act and 17 were against.

Presentation by Minister of Finance

Minister of Finance Jürgen Ligi presented the survey of the Government on the stability support granted by the European Stability Mechanism, and the participation of the Republic of Estonia in the European Stability Mechanism (ESM). The Minister recalled that the ESM had been born as a result of the global financial crisis and, as the Minister explained, there had been several crises in the 12 years of the ESM’s operation but currently the ESM does not have any active assistance programmes.

“The bailout loans granted from the ESM, and the EFSF, the predecessor of the ESM, during the financial crisis are in the post-programme monitoring phase. No risks have been identified that could jeopardise the ability of the beneficiary countries to repay the loans to the ESM,” said Ligi and specified that Spain had started loan repayments in 2022, and Greece had started to do the same in 2023. “I can confirm that last week the Greek Finance Minister endorsed the policy changes that Greece accepted as a condition of bailout loans. And now Greece’s current budget is in better shape than Estonia’s,” he said.

The minister also highlighted that the ESM had maintained its high credit ratings over its 12 years of operation, which was important when borrowing from the markets. The ESM can disburse loans to a maximum extent of 500 billion. Of this volume, EUR 417.5 billion, or the lion’s share, is currently available. However, the ESM invests the free funds on the basis of a conservative investment policy and has accumulated EUR 3.3 billion in reserves. “The ESM has fulfilled its role well in stabilising the euro area in the crises so far. Just knowing that the ESM exists has helped ensure stability in the markets. However, times are difficult, and we cannot rule out that some euro area countries will need ESM help in the future,” the Minister of Finance explained.

A Bill passed the first reading

The Bill on Amendments to the European Union Common Agricultural Policy Implementation Act and the Feed Act (546 SE), initiated by the Government, will bring the Act into conformity with the EU legislation and solve problems that have arisen in practice. A social conditionality system will be established for farms and farmers which will link area- and animal-based payments to the compliance with the working and employment conditions and employer obligations. Amendments will also be made in the measures for the common organisation of the markets in agricultural products as concerns school schemes, quality and composition requirements, and the implementation of marketing standards. In the case of school schemes, the Minister will be given the power to decide, at the level of regulation, on the more specific conditions for granting school scheme aid. The Bill also provides for measures to strengthen the protection of geographical indications.

Arvo Aller (Estonian Conservative People’s Party) and Urmas Kruuse (Reform Party) took the floor during the debate.

The Estonian Conservative People’s Party Group moved to reject the Bill. 14 members of the Riigikogu voted in favour of the motion and 51 were against and thus the Bill passed the first reading.

A Bill was dropped from the proceedings

The Bill to Bring the State Budget Act into conformity with the Constitution of the Republic of Estonia, (525 SE), initiated by Isamaa Parliamentary Group, was dropped from the proceedings. Its purpose was to increase the transparency and understandability of the state budget and to give parliament a greater role in the legislative proceedings on the state budget.

Anastassia Kovalenko-Kõlvart (Centre Party), Maris Lauri (Reform Party) and Aivar Kokk (Isamaa) took the floor during the debate.

46 members of the Riigikogu voted in favour of the motion of the Finance Committee to reject the Bill and 20 were against.

Verbatim record of the sitting (in Estonian)

Video recording will be available to watch later on the Riigikogu YouTube channel.

Riigikogu Press Service
Maris Meiessaar
+372 631 6353, +372 5558 3993
maris.meiessaar@riigikogu.ee
Questions: press@riigikogu.ee

Link uudisele: The Riigikogu updated the Accounting Act

Source: Parliament of Estonia