"It is likely the government will have to consider austerity come fall as we cannot keep feeding the economy using loan money," Harry Tuul said. At the same time, parties surely remember that the fall of 2021 will also see local government council elections, he added.

The state budget is one of the main sources of financing for local governments for new investments and promoting local life.

 "Prime Minister Jüri Ratas' recent utterances reflect the importance of supporting local governments," co-host Indrek Leppik remarked.

"Budget talks are important because really big decisions and investments are made there," Tuul said. "But what we can see is that if EKRE and Minister of Finance Martin Helme are maintaining that the state could spend now and also next year, coalition partner Isamaa and its chairman Helir-Valdor Seeder have been talking about the necessity of cuts for some time," Tuul noted.

He said that the ruling parties compromised in spring and decided to discuss potential austerity measures to handle recession caused by the coronavirus crisis in the context of next year.

Tuul also pointed out that next to local government elections, the autumn of 2021 is also poised to see a referendum over whether to define marriage as a union between a man and a woman in the Estonian Constitution that could render the political situations even more complicated.

For some government partners, the best tactic would be to make it an item of contention and tie it to allocation of funds. "However, this would make the elections about something else entirely," he concluded.

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