"In order to be competitive, the European Union must not continue the state aid race, but must focus on its strengths. The most important among them is the single market working on equal conditions and with nearly 500 million consumers, allowing European businesses to grow strongly," Kallas said.

On Monday, the EC is disbursing €238.5 million in performance-based funding for recovery and resilience for Estonia. Although Estonia was the first to renew its recovery plan and launch the investment measure for the just transition plan, the prime minister said Estonia is concerned about the tight deadlines for the funds.

"We have launched ambitious reforms and investments, but we have less than three years to implement them. In fast-changing circumstances, performance-based EU investments should allow for more flexible support," she said.

Kallas also raised Ukraine at the discussion.

In the meeting with Dombrovskis, the prime minister expressed hope that the EC's assessment of Ukraine's progress with its seven-step plan wll be positive and membership negotiations will start before the end of the year.

"Ukraine has shown determination and political will and has made incredible progress on reforms in the face of extremely difficult war conditions, and we are working to open accession negotiations this year," Kallas said.

Kallas also said she was looking forward to the EC's proposal for the use of frozen Russian assets. "We also need to decide on long-term support for Ukraine before the end of the year," the Reform party chairman added.

Discussions also centered on foreign trade matters, including trade relations with the US, and Kaja Kallas gave an overview of the investigation into the damage to the Balticconnector gas pipeline.

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