Estonia’s Justice Minister Liisa Pakosta has proposed renting out its prisons to host criminals from other countries in an effort to generate revenue for the state budget. The Baltic state is preparing to discuss spending cuts and tax hikes as part of the 2025 state budget amidst a rise in serious crime across Europe. Pakosta claims that the jail-rental proposal could bring in at least €30 million ($33.5 million) annually for the state.
The idea was initially suggested by Rait Kuuse, head of the Estonian Prison Service. According to Kuuse, Estonia has around 3,000 bed spaces in double-occupancy cells in closed prisons, with only 50% occupied. He described prison rental as a “feasible” solution, citing Norway’s previous renting of Dutch prison spaces and Denmark’s ongoing efforts to rent a 300-bed facility in Kosovo.
The UK and Sweden have reportedly approached Estonia regarding the proposal, with British jails being overcrowded and Stockholm seeking to triple its number of prison places. Finland is also short of around 500 prison beds. Pakosta noted that by renting out prison space, Estonia could create more jobs with reasonable salaries while addressing 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% of GDP. Estonia is also expected to spend between 3.21% and 3.43% of GDP on defense this year, which is above the alliance’s 2% guideline. The country’s Defense Ministry has stated that military spending in 2024 will be directly affected by the war in Ukraine, with concerns over potential Russian aggression towards Estonia if it emerges victorious from the conflict.
The Estonian government is set to begin discussions on the 2025 “austerity” state budget this week, which is expected to contain both spending cuts and tax hikes aimed at addressing the budget deficit.