"With agreements, it is such that if no one is completely satisfied then it means that it is a good agreement. It means that everyone had to make compromises," Kallas told ETV's evening news show "Aktuaalne kaamera".

There has been no decision on the allocation of ministries or portfolios, the prime minister said.

Speaking about spending, Kallas would not reveal the exact figure saying the parties have an overview and are going over the details. The agreement allocates additional funding for rising fuel costs, pensioners and struggling families.

"For example, money for energy subsidies comes from the CO2 quota, part of the money comes from tax receipts. Funding sources are available for the future state budget," she said but refused to release the working total.

During negotiations, Reform members did not discuss their goals or strategy, but the prime minister told "Aktuaalne kaamera" the transition to Estonian-language education, national defense and helping people with rising costs had been its priorities as well as keeping spending in check.

Asked about Isamaa chairman Helir-Valdor Seeder's comments about ongoing negotiations, Kallas said it is important to her that the "biggest issues" have been agreed upon and the "biggest disputes" have been had.

"This government will be in office for eight months and will not be able to completely change the world," the prime minister added.

It is hoped the new coalition will be in office "in a matter of weeks". As the Riigikogu is currently on summer recess, it must hold an extraordinary sitting to give the new coalition a mandate to rule.

All three parties must still agree on the finalized agreement.

Reform, Isamaa and SDE have been negotiating for almost a month. The three parties will have a majority of 56 seats between them in the 101-seat Riigikogu.

Reform has ruled alone as a minority government since the start of June when the party kicked junior partner Center and its seven ministers out of the governing coalition.

Negotiations were held up by discussions about the transition to Estonian-language education and family subsidies. Originally it had been hoped an agreement would be struck by Midsummer, June 23.

Last week, President Alar Karis urged the parties for clarity on negotiations.

Reform, Isamaa and SDE were last in coalition between April 2015 and November 2016. The union collapsed when Isamaa and SDE withdrew and struck a deal with Center.

The next election will be held in March 2023.

Main points of the new agreement:

• Child allowance to rise to €80 per child per month,
• Large family allowance rises to €600 (three-six children) or to €800 (seven children or more) and will be linked to indexation,
• Income tax-free threshold to rise to €654,
• Electricity market reform and subsidies for the coming winter,
• Transition to Estonian-language kindergartens education to start in 2024,
• Higher education financing to rise by €10 million.

Kallas to temporarily resign

Kaja Kallas will temporarily resign as prime minister in the Riigikogu in order to form the next government. This is a formality, Postimees reported.

President Alar Karis will then appoint Kallas as the prime ministerial candidate and the new government will be voted on in the Rigiikogu and given a mandate to form.

It is expected that Kallas will return as prime minister although the new coalition has not assigned ministries yet.

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