Reform seeks deficit cuts as Eesti 200 pushes for economic support

Estonia’s government will begin talks on next year’s budget and the state budget strategy on Tuesday, with the Reform Party prioritising a lower deficit and Eesti 200 calling for support for the economy and households, ERR reported.

The Reform Party wants to improve the current budget position by at least 0.5 percent of gross domestic product. The budget deficit next year should be no higher than 4 percent, said Annely Akkermann, chair of the finance committee of Estonia’s parliament.

Akkermann said economic growth, employment and tax revenue would help achieve the target. She also pointed to slowing inflation, which is expected to limit increases in indexed spending, pensions and wage costs.

Coalition partner Eesti 200 is instead focusing on supporting the economy and people. Education Minister and Eesti 200 leader Kristina Kallas said the government should maintain investment to support economic growth and improve competitiveness.

Kallas is seeking higher teacher salaries, additional funding for vocational education and digital development. She said reducing the deficit would require cuts to education, healthcare and social services, but she did not currently see where such cuts could be made.

The coalition does not have enough votes in parliament to pass the state budget and will need support from the opposition or from so-called window-seat lawmakers.

Andrei Korobeinik of the Centre Party said his party would not support a budget that failed to improve the state’s finances. He said the large deficit was the main problem and warned that there was a serious risk of politicians seeking to distribute money widely before the elections.

If the budget is not adopted, the state will operate next year proportionally according to this year’s budget.