TALLINN - The government has approved the draft state budget for 2011 and sent it to the Riigikogu for deliberation. Prime Minister Andris Ansip handed parliament his government’s proposed 2011 budget, which he said will be a basis for economic growth in a post-crisis period. Ansip called next year’s budget a “new growth budget” that focuses on improving the economic climate without unraveling the social fabric.
Expenses for next year are planned to amount to 94.2 billion kroons (6.0 billion euros), which is 4 billion kroons more than this year and will be funded by revenue from the sale of excess pollution allowances as well as by foreign financing.
“Step by step, we are moving past the exit phase of the crisis and toward the first stage of new growth,” said the head of government to the Riigikogu. “By keeping our economic environment productive, we will be able to make the transition from crisis to new economic growth. New jobs, an increase in pensions, services for families with children, security and a Nordic level of education – all of these depend on it. A functional, successful economy is an essential part of all of these positive changes,” said Ansip.
“We are simply moving from the phase of “crisis exit” to the phase of “first stage of economic growth.” It won’t happen overnight, but at the same time I believe that the government is giving parliament a “budget for new economic growth,” Ansip said when presenting the draft.
According to the prime minister, the economic crisis still exists in Estonia , although the European Commission forecast that Estonia would have the European Union’s highest economic growth in 2011. “The rest of the world may see a bright future for us, but only we can make it a reality,” said Ansip.
“Unfortunately, the effects of the worst economic crisis of the past 80 years will be felt by the world for years to come. Yet the recovery of confidence on export markets and among local entrepreneurs gives us hope for the spring in regard to the economy,” said the prime minister. “We do not have to pay back huge government debts; instead we can direct that money toward new economic growth,” said Ansip, noting that the Estonian economy was considered one of the more sustainable ones in the European Union.
The head of government stressed that the objective is to bring revenue and spending in the budget into balance by 2013. “Even though we still have ten percent of our gross domestic product in reserves, we will have to start growing our reserves again for coping with potential future crises. This is the lesson of today’s crisis,” said the prime minister.
The government sector’s deficit for 2011 is 3.8 billion kroons, or 1.6 percent of Estonia’s GDP. The deficit is one of the lowest in the European Union. The prime minister says it was “self-evident” that Estonia would have to continue its conservative budgetary policy, which was a significant boon for the country in times of recession.
In addition, the government has in principle decided not to introduce raises for the public sector next year. The government is proposing to the Riigikogu that wages for senior public servants be frozen until 2012.