Budget, Estonia, Financial Services, Investments, Legislation

Altogether 55 MPs voted in favor of the state budget bill, while 44 MPs cast their vote against it.

The gap stems from investments necessary for restoring the economy, as a result of which the volume of expenditures exceeds revenue growth.

According to the baseline scenario of a forecast by the Ministry of Finance, Estonia's GDP is to decline 5.5% this year and grow 4.5%  next year, remaining below the level of 2019 in 2021 by approximately one percent. 

Next year's state budget is based on the usual rules and takes into account the exceptions due to the crisis. The nominal deficit of the general government sector budget will equal 6.7% of GDP and the structural deficit 6.6 percent of GDP next year.

Investments by the Estonian government sector will amount to 1.9 billion euros next year. More than 1.4 billion euros of European Union subsidies are planned in the 2021 state budget.

Tax income is estimated to grow from approximately nine billion euros this year to 9.3 billion euros in 2021. The tax burden will decline from 33.8% of GDP in 2020 to 32.7% of GDP next year.

By the deadline for the submission of amendment proposals, which was Nov. 30, the parliamentary group of the opposition Reform Party submitted 12 amendments to the draft. One amendment was tabled by the security authorities surveillance select committee, which was also supported by the finance committee.

The finance committee drafted two amendment proposals. The committee's first amendment largely consists of a number of clarifications within and between ministries.

The aforementioned proposal also complements the bill with additional external support forecasted for 2021 in the amount of 313 million euros, which will be reflected in the government revenue as a consolidated line. The distribution of funds between the areas of governance had not been clarified by the time of the third reading of the bill, as negotiations with the European Commission are still ongoing.

The second amendment increases regional investment, supports various third sector and civil society projects on the basis of proposals made by the parliamentary groups and requests received by the finance committee.