Baltic nation may host foreign criminals to boost budget

The Estonian government is expected to discuss renting out jails to other countries

Estonia could rent out its prisons and host criminals from other countries to generate revenue for the state budget, Justice Minister Liisa Pakosta has said. The plan comes as the Baltic state prepares to discuss spending cuts and tax hikes as part of the 2025 state budget.

In an interview with public broadcaster ERR on Sunday, Pakosta said she had submitted a memo on the jail-rental proposal to the cabinet for discussion. The plan would generate at least €30 million ($33.5 million) in revenue a year for the state, the justice minister claimed.

”Serious crime is on the rise in Europe. There are only four countries in the EU where crime is increasing slowly… Estonia is one of them right now,” she told ERR.

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The idea of renting space in the Baltic state’s jails to house foreign prisoners was previously raised by the head of the Estonian Prison Service, Rait Kuuse.

According to Kuuse, the nation of 1.3 million people currently has around 3,000 bed spaces in double-occupancy cells in closed prisons, with only 50% of those occupied.

In an opinion piece published by ERR last week, Kuuse described prison rental as a “feasible” solution, noting that Norway had rented Dutch prison spaces several years ago, and that Denmark is seeking to rent a 300-bed prison in Kosovo.

The UK and Sweden have already approached Estonia, he said, as British jails are overcrowded, and Stockholm is seeking to triple its number of prison places. Finland is also short of around 500 prison beds, Kuuse added.

According to Bloomberg, the cabinet hasn’t yet discussed the proposal, and it isn’t clear whether the measure would have enough support to be approved.

”By renting out prison space, we’d achieve a situation where we’d provide significantly more jobs – jobs with completely reasonable salaries,” Pakosta told ERR. “We could resolve several budget deficit-related issues.”

Estonia’s budget deficit was 3.4% last year, above the EU threshold of 3% of GDP. Government debt amounted to €7.4 billion ($8.25 billion), or 19.6% GDP.

At the same time, the Baltic state, a NATO member, is expected to spend between 3.21% and 3.43% of GDP this year on defense, well above the alliance’s 2% guideline. According to the Estonian Defense Ministry, military spending in 2024 “is directly affected by the war in Ukraine.” Tallinn has claimed that Russia may attack the Baltic nation if it emerges victorious from the conflict with Ukraine – a claim that Russian President Vladimir Putin dismissed as “nonsense.”

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The Estonian government is beginning discussions on the 2025 “austerity” state budget on Tuesday. According to ERR, the document is expected to contain both spending cuts and tax hikes to address the budget deficit.