MoF Asks Ministries to Make Cuts of Over €50M ({{commentsTotal}})

As a new state budget cycle begins, Finance Minister Jürgen Ligi has sent a memo to government agencies, ministers and ministry chiefs of staff telling them to prepare to do some belt-tightening in 2015 and 2016.

The requests come with the memory of a Ligi ultimatum still fresh: he warned in November that if the plan to scrap VAT refunds on corporate vehicles fell through in Parliament, he would freeze 1.2 percent of the budgets of ministries.

That threat was not in evidence in the memo, but the requested cuts are extensive. Education, internal security, social affairs and culture would be hardest hit, Postimees reported. 

The Finance Ministry says the state will otherwise be 55.8 million euros short of an "exemplary budget" in 2015 and 59.7 million euros short in 2016.

The Ministry of Education is being asked to lop off 14 million euros, the Interior Ministry 10 million, the Ministry of Social Affairs 6 million, and the Culture Ministry and Economic Affairs Ministry 5 million each.

Institutions like the Supreme Court and Office of the President will be asked to trim from 100,000 to 200,000 euros. The only ministry to be spared completely is the Defense Ministry.

Ministries are expected to submit their financial plans by March 1. The Ministry of Finance characterized the requests as a normal part of the state budget process.