Riigikogu begins debate on 21.3 billion euro budget

Estonia’s parliament has begun debating a 21.3 billion euro state budget for 2027, with the largest sums going to defence and social spending, ERR reported. The first reading was left unfinished on Tuesday and is due to continue on Wednesday.

Reform Party and Eesti 200, the coalition parties, support the budget. The opposition Social Democratic Party also backs it, but has提出 its own amendments. Defence spending will exceed 5 percent of the budget, or 2.3 billion euros, Finance Committee chair Annely Akkermann of the Reform Party said. Social spending accounts for almost half of tax revenues, with the largest share going to pensions, followed by funding for the Health Insurance Fund.

The Social Democrats want more funding for special care services for people with mental health disorders. Akkermann said the money would come from the government reserve, but SDE deputy chair Riina Sikkut said the 7.5 million euros in unallocated social-sector funding was not enough to meet needs. The government reserve totals about 120 million euros, much of it already earmarked, she said.

The Centre Party plans to propose cutting value-added tax on food, taxing banks’ excess profits, scrapping the car tax and introducing progressive income tax rates for high earners. Finance Committee deputy chair Andrei Korobeinik said the Reform Party was unlikely to accept the proposals and that the party might only be able to implement them after the next elections.

The Conservative People’s Party of Estonia, or EKRE, has called for the draft budget to be rejected. Its leader, Martin Helme, said the budget could be cut by at least 1 billion euros without affecting anyone except wind energy businesses and what he called “Rail Baltica bluff-makers.” He also said the budget would have to be revised after the next elections.

Isamaa parliamentary group leader Helir-Valdor Seeder said hundreds of millions of euros were allocated to areas where the money could not be used. He cited 261 million euros in SmartCap funding under EISA and said similar issues existed in the Defence Ministry’s area of responsibility.

Akkermann said the Climate and Economic Affairs ministries were monitoring energy prices and that the state would respond if they surged during winter. Possible measures include excise tax cuts and support for businesses, energy-intensive companies and household consumers. Network charges have also been reduced previously, she said.