ERR News - The government has approved the draft 2011 budget which it will send to parliament next week, with a deficit of 1.6% of GDP and with investments at an all-time high as a percentage of the budget.

Expenditure will be just over 6 billion euros - about 250 million euros more than this year - and it will be funded above all by sale of excess pollution allowances and external capital.

Revenue is planned at 5.73 billion euros, which means a deficit of 243 million euros - 1.6 percent of Estonian GDP.

The budget is expected to be in balance by 2013.

Government operating costs have been frozen, and the government has decided to forgo raises for senior public servants until 2012.

External assistance from the EU and other bodies amounts to just a shade under 1 billion euros - 64 million euros more than this year.

The state is planning just over 1 billion euros in investments, 16 percent more than this year. The main emphasis is on transport and logistics.

Education spending will be up 7.9 percent from 2010.

Social sector spending will be 2.64 billion euros, up 64 million from this year. Old-age pensions and family-related benefits and allowances will not increase.

Entrepreneurship grants will increase 10 percent from last year - 80 million euros will be dispensed.