Keldo says government must scrap investments to cut deficit

Estonia’s government may have to abandon some planned investments and cut operating costs to keep the budget deficit below 4.5 percent, Economy and Industry Minister Erkki Keldo said, according to ERR.

The government is continuing talks on the state budget. Keldo said the budget would have to ensure that at least 5 percent of gross domestic product is allocated to defence spending, leaving other sectors facing cuts.

“We have promised to reduce the deficit so that it is below 4.5 percent. We are trying to do that. This simply means cutting expenses, including operating and technical costs. Some investments will also have to be abandoned, such as buildings and other construction that might be possible in better times. We cannot afford that when a large share is going to defence investments,” Keldo said.

Interior Minister Igor Taro said it would be difficult to make cuts in his ministry’s area of government. More funding would instead be needed for measures such as developing drone defence, although he did not say how much.

“I cannot imagine telling society that we will not deal with civil protection at all. We need shelters. Everyone agrees. Everyone asks where these shelters are, where they are in schools and residential buildings. Or could we say, for example, that we will no longer build the state border?” Taro said.

Riina Sikkut, deputy chair of the Social Democrats, said the minority government would need opposition support to approve the state budget. She said the government had not discussed its budget plans with the opposition.

“If everyone had the same information about the forecast and the use of external funds, it would be much easier to secure support in the Riigikogu, because otherwise the question remains where the figure comes from, why such a choice was made and what the alternatives were,” Sikkut said.

The government wants to make the main decisions on the 2027 state budget by the end of next week.