The government plans to terminate the cruise shipping subsidy next year. This will save approximately 40 million euros over four years. The government considers this a necessary austerity measure, but representatives of the maritime sector fear it will damage Estonia's status as a maritime nation.
Chancellor of the Ministry of Climate Marten Kokk said that the loss of the subsidy will weaken the competitiveness of Estonian shipping companies. He mentioned that Sweden is providing 150 million euros for a similar subsidy this year, while Finland is providing 80 million euros. Estonia had planned to allocate 9 million euros annually, but a political agreement was not reached.
Jüri Lember, head of the Seamen's Trade Union, said the loss of the subsidy could result in some ships, such as Tallink's Victoria, leaving the Estonian flag. He explained that the Victoria operates at a loss on the Tallinn-Helsinki route, lacking sufficient cargo and passengers.
Tallink CEO Paavo Nõgene stated that competing in the European Union without subsidies is difficult. He added that removing ships would mean significant job losses and financial losses for the state. Tallink and the Ministry of Climate will discuss the situation at the beginning of the new year.
Lember believes the subsidy should continue until other countries also stop providing it. He noted that Finland, Sweden, and Latvia currently maintain such subsidies.
Reform Party member Mart Võrklaev said the subsidy was temporary aid during the coronavirus crisis. He believes Tallink is now using it as a negotiation tactic. Võrklaev pointed out that the pandemic is over and Tallink is profitable again, making the subsidy unnecessary.
Võrklaev added that the state has many expenses and must make choices when allocating funds. He said providing the subsidy does not guarantee that ships will remain under the Estonian flag. ERR reported that Tallink's profit fell by 90 percent this year.