OREANDA-NEWS. September 20, 2010. At a cabinet meeting the Estonian government agreed that the volume of expenditure in the state budget for 2011 would be just over 94 billion kroons, which is 4 billion kroons more than in 2010, primarily generated from more prudent use of external aid and revenue from the sale of pollution quota AAUs.

The government decided to increase spending on education in 2011 by 7.9%. Education has always been important to the Estonian state and population, as reflected in the constant growth of spending in the field in the state budget. Even during the recession the government increased education expenditure by a billion kroons. The 2011 budget also boasts the highest ever proportion of investments. The state plans to invest 16 billion kroons, which is 16% more than in 2010. There will be a significant increase in local government investments, to the value of 1 billion kroons.

The volume of revenue for the 2011 budget is 90 billion kroons. The Estonian state is likely to end its budgetary year with one of the smallest deficits in the European Union – just 1.3% of GDP. Payments into the second pillar pension system will resume in the new year, at an annual cost of 1.2 billion kroons. The 2011 budget deficit will be 4 billion kroons.

Minister of Finance Jurgen Ligi says that most satisfying aspect of the 2011 budget is the forecast reduction in the deficit. “The objective set in accordance with the budget strategy was to bring the deficit down to 2% of GDP,” he explained. “And the cabinet’s decision today will see the budget deficit reduced to just 1.6% of GDP. The agreements needed to achieve this were reached fairly quickly and painlessly, despite the difficult times.”

Amongst other things, the government has decided to provide 50 million kroons in support for the Tallinn 2011 – European Capital of Culture project, with a further 17 million kroons in support of the Song and Dance Celebrations. Further contributions will also be made to the construction and preparation of venues for Capital of Culture events, to the total value of 200 million kroons.

Also receiving support will be the Arvo Part Centre – currently under development, the centre will receive a grant of four million kroons. The government plans to approve the state budget for 2011 next Thursday 23 September. It will then be presented to the Riigikogu on 27 September.