The spring economic forecast, published in early April, showed that if all the promises in the country's fiscal strategy are kept, this year's budget deficit will be 3.4 percent of gross domestic product. This is 0.4 percentage points more negative than allowed by EU rules.

"In order to stay within the 3 percent deficit, which is in line with the budgetary rules, we would need to improve the position by about €175 million," said Finance Minister Mart Võrklaev on Vikerraadio's "Uudis+" program, adding that he has proposed various austerity measures.

"I wouldn't say too much about it publicly until we can discuss it amongst ourselves. For now, everyone is digging deeper and reflecting," Võrklaev said.

The leader of the Social Democrats, Interior Minister Lauri Läänemets, said that the Social Democrats and the Eesti 200 will present their vision on Wednesday. Läänemets said that the Social Democrats' proposal differs from Võrklaev's.

For example, Võrklaev suggested reducing defense spending. "We do not believe that national defense and internal security should be cut at the moment," Läänemets said.

Local authorities, foundations, government expenditure

However, Võrklaev's proposed cuts only affect national defense, to the tune of about €10 million. The rest of the money is supposed to come from elsewhere, but the task is not easy, no matter how you do the math.

For example, the salaries of civil servants, which are subject to public disclosure, amounted to about €340 million last year. This means that if all these officials were fired in June, the austerity mission could be completed. Another question is what would be left of the state services.

Margus Tsahkna, the leader of Eesti 200 and Estonia's foreign minister, believes there will still be significant savings in government spending. "I'm sure in today's digitized world, it's always possible to cut from there," he said.

"The same goes for foundations. The payroll analysis showed that local governments are also overspending. Perhaps all of this is reflected in the state budget balance."

Võrklaev also suggested to the coalition partners to save money at the expense of bureaucracy. Läänemets said that the real ambition could be increased there. He also thinks that plans for the use of euro funds should be reviewed.

For example, according to the minister of the interior, the support program for the renovation of private houses was misdirected. "It might make more sense to do something in a certain area with European money, which would then free up money from the national budget," Läänemets said.

Those who got more should also cut more

Võrklaev does not yet want to talk publicly about specific cost lines. However, he did reveal a little about the principles of his reasoning.

"Some areas have received additional funding for 2024. However, if the revenues do not match the expenses, it would probably be wise to have some review there as well," Võrklaev said.

In other words, more cuts are likely to be made by those ministries whose additional requests were granted last fall.

"But where the ministry finds the money is their choice. It doesn't have to come from where the money was directed," Võrklaev said.

Läänemets said that additional requests were made by Social Democrat-led ministries for public transport reform, border development and police training.

"If the proposal is, don't touch the border, but close the commandos, it should be said so," Läänemets said.

What is the impact of the supplementary budget on the 2025 budget?

This is not the end of Läänemets' criticism; he said that Võrklaev's proposals are too narrow and do not sufficiently take into account the deficit that we will face in the coming years.

"This proposal is the kind of thing that's appropriate to talk about before an election, and it seems like a good, sensible thing to talk about that won't bother anyone. But in fact, we should also be making tough decisions during elections and making real improvements to the national budget," Läänemets said.

However, Võrklaev emphasized that if government spending is reduced this year, it will be lower in the coming years. "What's done today is partly neglected tomorrow," Võrklaev said.

However, Läänemets said that only part of Võrklaev's proposals concerned fixed costs for the state. Some of the planned costs are to be deferred.

Social Democrats and Eesti 200 also want agreement on RES

This again highlights one of the main points of contention between the coalition partners. The Reform Party insists that agreements on next year must be reached in August. The Social Democrats, on the other hand, believe that the framework should be set much earlier.

"We want to look at the whole budget strategy," Läänemets said. "And if the will is there, I am sure that within a week or so it will be possible to agree on all the necessary bureaucratic cuts for the next few years, and also tax increases."

Among other things, Läänemets recalled the Social Democrats' idea to abolish the tax increase. Tsahkna, the leader of Eesti 200, also expects a longer-term plan.

"A decision in principle should be taken as soon as possible on the cut, so that the ministries can be guided in their preparations by August," Tsahkna said.

One thing the coalition partners agree on, however, is that the government must reach an agreement on the supplementary budget in May if it is to be approved by the Riigikogu before mid-summer.

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