Estonian government begins talks on 2027 budget

Estonia’s government began discussions on the 2027 state budget and the country’s budget strategy for the following four years on Tuesday, ERR reported. The talks will also shape Estonia’s positions on the European Union’s new 2028–2034 budget period.

The Finance Ministry’s summer economic and fiscal forecast will provide the framework for the budget discussions. The forecast is due to be presented to the government and the public on Thursday.

Prime Minister Kristen Michal said improving people’s well-being would be the main priority for next year’s budget. He said his government would not raise taxes and would continue reducing the deficit.

“In addition to economic growth, the key priorities are investments in defence to ensure the country’s security, quality education and clean nature,” Michal said.

Kristina Kallas, the education and research minister and head of the Estonia 200 government delegation, said the budget should support economic growth and improve Estonia’s competitiveness.

“We need to invest more in the economy’s productivity: in our people, education and artificial intelligence capabilities,” Kallas said. She also pointed to planned investments in teacher pay rises, vocational education and the digital state.

Finance Minister Jürgen Ligi said the economy’s strong condition did not justify a deficit of 4.5 percent of gross domestic product, which is temporarily permitted under an exemption clause in the budget rules. He also said that increasing the debt burden at such a rate would not be sustainable.

“All areas must therefore manage with considerably less than recommended, and even where the total amount of spending does not decrease, its real value will decline,” Ligi said.

The government began Tuesday’s meeting with a moment of silence in memory of former Prime Minister Siim Kallas, who died on Saturday.

The government plans to approve the state budget and budget strategy’s revenue, expenditure and other measures by the end of September. It is also expected to approve the health insurance fund’s budget position for the next four years and all draft legislation related to next year’s state budget.

The government also aims to approve the allocation of EU support for 2028–2034 under Estonia’s national plan. Before the documents are approved, the government will hear the opinion of the State Budget Council.

Michal is expected to submit the state budget to parliament in the final week of September.