TALLINN - Estonia's government approved a budget strategy for the years 2007 's 2010 that calls for added expenditures for social needs and defense. The combined volume of the our-year budget plan amounts to 335 billion kroons (21.4 billion euros), which includes some 49 billion kroons in external funds. Spending for national defense will rise, so that by 2010 it comprises 2 percent of its gross domestic product 's in line with NATO requirements.
Speaking at a press conference on May 31, Prime Minister Andrus Ansip described the budget blueprint as a "good strategy." The prime minister also stressed an increase in the relative share of spending for internal security, culture and foreign representations.
Finance Minister Aivar Soerd said the budget strategy for four years marked a big step forward in long-term planning of the state budget and cooperation between different institutions of the state.
"Implementation will ensure the rapid socially and regionally balanced economic development of Estonia. It is the most important strategic document of the Estonian state, which must reflect the interests and expectations of the largest possible portion of society, survive changes in political trends and make a maximum contribution to Estonia's development," Soerd said.
"This year the strategy was for the first time drawn up on the basis of good practices and methods of strategic planning," the minister added.
In accordance with the budget plan, the overall tax burden will fall 1.6 percentage points by 2010 and comprise 31.6 percent of GDP (versus 33.2 percent now). It also calls for the continuation of taxing the income of both individuals and legal persons with a proportional tax.
