Government ministries must be prepared to make spending cuts to the tune of €60 million next year, finance minister Keit Pentus-Rosimannus (Reform) says.
Pentus-Rosimannus' comments follow state budget strategy discussions which have been going on this week, involving the two coalition parties, Center and Reform, who have not been seeing eye-to-eye on all aspects of the negotiations.
The finance minister told daily Postimees that: "We had a difficult partner at the negotiations, who very clearly stood for its own cause, and did so very strongly.
At the same time, a deal had been struck, she said, echoing an announcement made by public administration minister Jaak Aab (Center) Wednesday.
"I believe that ultimately a good compromise is one where nobody leaves rejoicing, and that's how things have been with the state budget strategy too," she said.
During the last economic downturn starting in 2007, Pentus-Rosimannus' party had followed a pro-austerity line under the prime ministership of Andrus Ansip. Reform was not in office when the coronavirus pandemic struck last year, but was critical of the then-Center/EKRE/Isamaa administration's willingness to borrow in the face of the economic fallout.
As regards the current talks, Pentus-Rosimannus said that: "The task that all members of the cabinet took upon themselves is specifically to reduce living beyond one's means. A major proportion of the work negotiating over the state budget strategy we carried out, in addition to the ministers, with a very good collaboration Center leader (and non-minister – ed.) Jüri Ratas, and the leader of Center's Riigikogu group, Mailis Reps (also not a minister, though was Center's lead negotiator at the January coalition talks with Reform – ed.)."
"I have no reason whatsoever to doubt that the result of the negotiations and the agreement they endorsed will indeed hold up," Pentus-Rosimannus added.
Estonia has 11 ministries, along with the government office, and 14 ministers (three ministries, the Ministry of Social Affairs, the Ministry of Economic Affairs and Communications and Pentus-Rosimannus' own ministry have two ministerial roles appended to them).
Pentus-Rosimannus said that each minister had undertaken to cut costs by over 5 percent, which together will come to €60 million, in 2022.
This bitter pill would be necessary to swallow, she added.
"I believe that everybody knows that, in thinking about the planning of their own daily budget, living beyond one's means is not something that can be done indefinitely. This is what the state must take into account in particular," Pentus-Rosimannus said.
The state budget itself usually passes at the end of the year ahead of the year it pertains to.
Editor: Andrew Whyte