TALLINN — Estonia’s new era of austerity may not end anytime soon if the latest Bank of Estonia budgetary suggestions are implemented.
The Bank of Estonia said the government to cut eight billion krooni (€511.3 million) if it wants to achieve budget surplus in 2013 as was promised to the European Union.
Andres Lipstok, president of [private_supervisor]the Bank of Estonia introduced the central bank’s 2009 report at the parliament Thursday. Lipstok said that to improve the budget it is possible to decrease the costs or increase the income, but additional tax hikes would decelerate the economic recovery.
“It is more useful to search for opportunities on how to reduce the tax burden which grew rapidly last year and now halts creating new jobs,” said Lipstok.
After years of budget surpluses during the Baltic boom years, declining tax revenues caused by the economic crisis forced the government into deficit spending, although with a variety of austerity measures Estonia managed to stay within the Maastricht criteria.
The 2010 budget deficit was reduced to less than 3 percent of gross domestic product, fulfilling the Maastricht criteria to switch to the euro currency in January 2011. But it has done short-term harm to the economy, as the increased fuel and electricity taxes are inflating consumer prices and discouraging already weak domestic demand. The medical fees are also putting a crimp on family budgets, which are under duress from the crisis. [/private_supervisor] [private_subscription 1 month]the Bank of Estonia introduced the central bank’s 2009 report at the parliament Thursday. Lipstok said that to improve the budget it is possible to decrease the costs or increase the income, but additional tax hikes would decelerate the economic recovery.
“It is more useful to search for opportunities on how to reduce the tax burden which grew rapidly last year and now halts creating new jobs,” said Lipstok.
After years of budget surpluses during the Baltic boom years, declining tax revenues caused by the economic crisis forced the government into deficit spending, although with a variety of austerity measures Estonia managed to stay within the Maastricht criteria.
The 2010 budget deficit was reduced to less than 3 percent of gross domestic product, fulfilling the Maastricht criteria to switch to the euro currency in January 2011. But it has done short-term harm to the economy, as the increased fuel and electricity taxes are inflating consumer prices and discouraging already weak domestic demand. The medical fees are also putting a crimp on family budgets, which are under duress from the crisis. [/private_subscription 1 month] [private_subscription 4 months]the Bank of Estonia introduced the central bank’s 2009 report at the parliament Thursday. Lipstok said that to improve the budget it is possible to decrease the costs or increase the income, but additional tax hikes would decelerate the economic recovery.
“It is more useful to search for opportunities on how to reduce the tax burden which grew rapidly last year and now halts creating new jobs,” said Lipstok.
After years of budget surpluses during the Baltic boom years, declining tax revenues caused by the economic crisis forced the government into deficit spending, although with a variety of austerity measures Estonia managed to stay within the Maastricht criteria.
The 2010 budget deficit was reduced to less than 3 percent of gross domestic product, fulfilling the Maastricht criteria to switch to the euro currency in January 2011. But it has done short-term harm to the economy, as the increased fuel and electricity taxes are inflating consumer prices and discouraging already weak domestic demand. The medical fees are also putting a crimp on family budgets, which are under duress from the crisis. [/private_subscription 4 months] [private_subscription 1 year]the Bank of Estonia introduced the central bank’s 2009 report at the parliament Thursday. Lipstok said that to improve the budget it is possible to decrease the costs or increase the income, but additional tax hikes would decelerate the economic recovery.
“It is more useful to search for opportunities on how to reduce the tax burden which grew rapidly last year and now halts creating new jobs,” said Lipstok.
After years of budget surpluses during the Baltic boom years, declining tax revenues caused by the economic crisis forced the government into deficit spending, although with a variety of austerity measures Estonia managed to stay within the Maastricht criteria.
The 2010 budget deficit was reduced to less than 3 percent of gross domestic product, fulfilling the Maastricht criteria to switch to the euro currency in January 2011. But it has done short-term harm to the economy, as the increased fuel and electricity taxes are inflating consumer prices and discouraging already weak domestic demand. The medical fees are also putting a crimp on family budgets, which are under duress from the crisis. [/private_subscription 1 year]
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