The deficit is likely to hover around 3 percent for the next four years, Monday's "Aktuaalne kaamera" reported.

"In the current situation, it is necessary to ensure that the deficit does not increase, [but] not to think about reducing it," said Minster of Finance Keit Pentus-Rosimannus (Reform). 

Defense spending will rise due to the tense security situation. It will exceed €1 billion next year and stay as high for the next four years.

"Next year, defense costs will most likely exceed 2.5 percent [of GDP], and in turn, in 2024, according to the current forecast, Estonia's defense costs will probably reach three percent of GDP or even slightly exceed it," the minister said.

The budget could have been balanced if defense spending had been reduced, Pentus-Rosimannus said.

Subsidies will also be given to help people with rising energy costs, but these will be covered by state-owned energy company Eesti Energia and the additional money generated by high bills.

For example, looking at gas, the government will establish an upper price limit for home heating and, when prices rise above this, the state will compensate up to 80 percent.

"The total amount will probably be around €200 million euros," said Pentus-Rosimannus.

Police officers, rescue workers and teachers will all receive raises.

Minister of Education and Research Tõnis Lukas (Isamaa) said funding for this area is a priority in 2023's budget and the following four years.

He said teachers' minimum salaries will rise by 23.9 percent, from €1,412 to €1,749 and to an average of €2,048 when flexibility funds are taken into account.

"Higher education funding will jump, it will increase by 15 percent in the following years. Including the transition the Estonian language of instruction has been financed with €41 million," said Lukas.

However, there is little money in other areas.

"In the case of the Ministry of Economic Affairs, this means that subsidies for public transport will remain, but there will be nothing coming for road investments," said Minister Riina Sikkut (SDE).

--

Follow ERR News on Facebook and Twitter and never miss an update!