General Government budget was in small surplus last year

According to preliminary data, at the end of 2010, the total revenues of the general government sector surmounted the expenditures, accounted as the Maastricht deficit criteria, by 18.3 million euros (286 million kroons). Compared to 2009, the volume of revenues and expenditures decreased significantly. Tax revenues were 2.3% smaller. Taxes on products and production decreased 5% mostly due to the poor income from the excises on tobacco, and the 7% decrease in the taxes on properties was caused by a fall in the received corporate income taxes. The revenue from social security contributions increased 3%. The state property income declined substantially (29%) mainly due to a smaller income from dividends. The production activities of enterprises gained more support from the state budget than earlier. The state investments in fixed assets fell back by nearly a fourth.

The decrease in general government’s wage costs continued. In 2010, 66 million euros (1.03 billion kroons) were paid out as wages and social contributions, which is 4% less than a year before. 3.4% less was spent on social benefits in total; costs decreased mainly on account of health and unemployment insurance disbursements, which fell by 45%. At the same time, the expenditures on pensions and family benefits rose by 3.2%.

The expenditures of central government exceeded the revenues for a third year in succession and the deficit was 92.4 million euros (1.4 billion kroons). At the same time, the remaining loan of the central government decreased by nearly 5%. The sales of Kyoto Assigned Amount Units, on which 158 million euros (2.5 billion kroons) were earned, had a significant effect on the central government income level. By the international methodology, the revenues from the sales of Assigned Amount Units are accounted in Government Finance Statistics within the period when the ownership of these units changes, and the “green investments” made out of these revenues are accounted accordingly in the period when the expenditures occur. The linking between revenues and expenditures is the choice of each country; therefore, in the case of sales of Assigned Amount Units linked with the investment liabilities, the accounting rules do not provide for the option of accounting the revenues-expenditures neutrally as it is in the exceptional accounting of EU support.

Surplus/deficit and debt level of the general government, 1995–2010

For the first time after the restoration of independence, the year ended with surplus in the local governments’ sector, where the revenues exceeded the expenditures made by 27.2 million euros (426 million kroons). The debt level of local governments fell 3% during the year. Nearly three-quarters of the local governments reduced their debt liabilities during the year, whereas smaller governments, whose loan agreements are in general signed for a shorter period, were more active in paying back their loans. The debt burden of major local governments remained on the same level or, in some cases, increased a little.

Unlike in 2009, the social security funds ended the year 2010 with a surplus, which comprised 0.6% of the GDP. The debt of social security funds is continuously very small compared to other sectors. The general government consolidated debt (Maastricht debt) was 951 million euros (14.9 billion kroons) at the end of 2010, having decreased 4% compared to the previous year. Almost two times less money was spent on interest expenditures than in 2009.

In Estonia the General Government sector is divided into three sub-sectors: 1) central government (state budget units and extra-budgetary funds, foundations, public-legal institutions); 2) local governments (city and commune administrations with their subsidiary units, foundations); 3) social security funds (Health Insurance Fund, Unemployment Insurance Fund).

Eurostat is going to publish the data on the preliminary debt and deficit levels of the Member States on 26 April.