Reform Party leader Kaja Kallas agreed that tough times certainly call for loans, but did criticize the coalition for not unveiling their detailed plans for state loan expenses and investments.

She said: "They are patching up a hole created by Ratas' previous government, which was not governing during a crisis. The money was spent during the good times and they now have no plan."

EKRE leader and Minister of Finance Martin Helme acknowledged that the budget volume has indeed increased for the next period due to the EU economic recovery fund and support measures. In addition, he said the rule of a balanced budget does not hold during a crisis which gives more maneuverability with the nearly €3 billion in borrowed money, of which two thirds is still unused.

Helme did not recognize the opposition's concerns: "Of course, 10 billion is a large number, it could scare off some people and small children."

He added that Estonia will remain low on the list of EU member states in terms of debt burden, even when the loan level increases to 30 percent of GDP, instead of the current 8.5, as all EU countries are currently taking loans and debt burdens are growing by 20 percent on average across the union.

Helir-Valdor Seeder (Isamaa) emphasized that the government should still find fixed income sources to cover fixed expenses. "We must not abuse the freedom the member states currently have."

Seeder did support taking out a loan, calling it a necessity. "A loan should be taken, it is done by other countries as well. We can not swim upstream, we are in a general competition situation."

At the same time, he considers the current situation to be an unique opportunity to increase research funding to 1 percent of GDP, because it is nominally lower than years before, when the economy was in greater shape.

The Isamaa leader sees cuts being able to made in unnecessary and duplicating activities in the public sector. A pay bump in the public sector is also not justifiable in his assessment and should be frozen.

Prime Minister Jüri Ratas (Center) explained that there are two ways to continue current actions in the crisis - to either save up or to borrow to cover costs. He is in favor of borrowing, otherwise cuts would have to be made in all sectors, concurrently wounding Estonia's economic development.

Ratas said: "We have a clear plan now, we will present a budget to the Riigikogu by September 30."

Indrek Saar, leader of the Social Democratic Party (SDE), expressed doubt if the Ministry of Finance can be trusted in regards to the budget forecast, because finance minister Helme has given it his own rendering. Saar would have liked to see the central Bank of Estonia, and other banks, add their opinion to the forecast, along with comments.

Helme, Ratas promise increased defense capabilities

Helme defended opening a discussion on defense spending. According to him, it is important to delve into the content of spending, instead of just being pleased with the requirement of defense spending hitting 2 percent of GDP.

Ratas promised that Estonia's defense spending will remain at 2 percent of GDP and he claimed he does not consider it right that defense spending would be reduced by, for example, €50 million.

A concrete budget plan will be presented by September 30, which will shed light on defense spending. Members of Isamaa, including Minister of Defense Jüri Luik, have expressed concern lately of EKRE being involved in defense spending.

Luik said on September 14 that national defense spending plans should not be drawn up via improvising, and by no means from the cabinet of Minister of Finance Martin Helme.

He added: "I am glad that EKRE has backed from their initial position and now finds that national defense should not be decreased. At the same time, the finance minister should note that the planning for Estonian national defense must be done in cooperation with EDF leadership and other persons responsible for national defense. It can not be done by improvisation, by no means from the cabinet of the finance minister."

Debate on extraordinary pension to heat up after September 30

The prime minister was not yet prepared to announce a pension hike because it will also be specified during budget talks.

Indrek Saar was in support of the hike, saying a pension should be able to cover the costs of a care home, in case a person has no other option.

Kallas said that if the economy is doing well, pensions will also increase due to indexation. Seeder agreed with the Reform leader and added that the development of other sectors is also tied to economical growth.

Kallas did point out a need to release the old-age pension from the income tax obligation. Helme explained that the idea stands behind the second pillar pension reform, currently discussed in the Supreme Court.

--

Follow ERR News on Facebook and Twitter and never miss an update!