Baltic States – CIS, Budget, Estonia, Financial Services, Legislation, Security

Photo: valitsus.ee

“This means improved public well-being. This means confidence that the public finances are under control. This means guaranteed security,” said the Prime Minister in addressing the Riigikogu.

The Prime Minister said that while the aggression against Ukraine would inevitably affect the certainty and confidence of the Estonian people, Estonia was careful and knew how to protect itself. “Our security is protected because we are ready to take action to ensure the stability of our country; to ensure that we can make the choices we feel are necessary,” said the Prime Minister. “We will do what it takes to defend our country because our freedom is priceless.”

The main objectives of the new budget for 2015 are, besides national defence spending, investments in internal security and Estonia’s eastern border; economic certainty, which is ensured by a conservative budget that leaves room for unforeseen expenditure caused by problems in the European economy and the economies of neighbouring countries. 

The draft budget was drawn up based on the principle that the number of employees whose salaries are paid from the state budget should not increase; instead, their performance should improve to become more efficient and effective. Next year, the salary fund for those who are paid from the state budget will increase by at least 3%, while the salaries of teachers, social workers, cultural workers and those employed in internal defence duties will increase by 4.5%. 

A number of resources from the EU Structural Funds will become available next year. These resources will be used to make changes that have a long-term positive effect, be it increased productivity and added value, new knowledge and skills, the improved wellbeing of the Estonian people or reforms. The Government will continue to support several large-scale road construction projects, the development of railway infrastructure and e-Government services. 

The budget for 2015 foresees lower labour costs, a reduction in personal income tax rates and unemployment insurance premiums and an increase in the basic exemption limit. Moreover, the development of work capacity reform and reorganisation of the school network will also continue. A considerable raise is expected in child benefits and subsistence benefits for families with children, while old-age pensions will increase by 5.9%. Our certainty is partially based on knowing that our living environment will be preserved and remain habitable into the future. The budget foresees investments to promote Estonian culture.

“In spring, when the Government took office, the coalition was accused of being too ambitious. I am pleased to see that we are achieving our targets. The budget for 2015 is based on the objectives and principles agreed upon last spring and take into account the external environment, which has posed different and not exactly pleasant challenges,” said the Prime Minister to the Riigikogu.

The Prime Minister stressed that next year’s budget will offer certainty to everyone in Estonia. “It will give people confidence that Estonia is a safe place in which to live. It will give people confidence that their families’ lives will improve and that future generations will not be burdened with debt. It will give people confidence that we can manage, even if things in the world are not going as hoped. Finally, I hope that the budget will also give us confidence in ourselves.”