Prime Minister Taavi Rõivas said his government will not renew the coalition agreement. The Cabinet is currently debating the budget strategy for the next three years and has come under fire for plans to increase fuel excise duty and tax on accommodation services, prompting calls for a number of expensive promises to be dropped.
Rõivas said the coalition agreement is not up for debate as ministers look for ways to make cutbacks. Additional cuts are needed to postpone the tax hikes and to cover a potential hole in the budget, left by a slower pace of economic growth.
The Prime Minister said child benefit rates will increase, tax on labor will decrease and spending on defense will continue at the 2-percent of GDP mark.
Editor: J.M. Laats