Võrklaev said that the 2024 deficit will come to €1.2 billion, which cannot be covered using dividends from the state-owned Eesti Energia.

"Unfortunately, Eesti Energia is not as wealthy as all that. The company needs to perform its obligations, including those it has in front of the Estonian people," the minister said.

He added that while it has been suggested in the media that drawing dividends from state companies could solve all our problems, structural deficit cannot be cured with one-off cash injections. "Our problem is that our fixed spending exceeds our income, which hole we are largely plugging using loans today," Võrklaev remarked.

The minister also said that he is working on cutting €430 million after admitting late last year that previously unspecified tax hikes worth €400 million will largely be unfeasible in 2025, adding that he is expecting the Reform Party's coalition partners to also propose solutions.

Talking about Estonia's VAT hike, which entered into force from January 1, the minister said that a €50 basket of goods should become just 68 cents more expensive as a result.

He urged people to keep an eye on retailers and whether they plan to introduce price hikes in the shadow of the VAT rate going up.

The finance minister said that car tax debates are continuing as there is still no consensus between the partners, while the law should be passed before July 1 to leave six months before its entry into force in 2025.

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