Factoid of the day: the closet Keynesians in Estonia

Estonia does reasonably well, compared with the other Baltic countries (and really well when we look at its government deficit). How is this possible, considering harsh austerity? Well, read this:

“When compared to the previous years, the share of foreign funds in the total expenditures of the budget will increase in years 2011 and 2012 due to the intensifying of the implementation of the structural funds of the EU programme period for years 2007-2013 and will comprise on average approximately 18% of the total expenditure volume. The total planned volume of foreign funds for years 2011-2014 is in excess of 50 bln EEK. One of the government priorities is to use the foreign funds as fast as possible, in order to contribute to enlivening the economy and to creation of jobs. This is why there is a forecast of relatively sharp decline of the volume of supports for years 2013-2014, due to depletion of the funds of the programme period.”

Here’s the link. (look at state budget strategy 2011-2014).

By the way – contrary to the other Baltic countries Estonia did not slash expenditures as much but increased taxes.

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