Läänemets said the party has not given up on raising emergency workers' salaries next year.

"I do not know what year it might be and what amount. It could be that in 2025 it will go up by a small percentage and in 2026, for example, it will go up by more. There could be some other kind of agreement. That will ultimately be negotiated," Läänemets told ERR on Wednesday.

He said there is no need to make redundancies. The minister said additional costs have been added over the years and they can be reduced before layoffs are made.

The party chairman said the government has not discussed ending the indexation of pensions, and as long as SDE is in the coalition, it will not happen.

"If anything has been calculated and planned in the Ministry of Finance, it has been done behind the backs of the Social Democrats. We know nothing about it. If there is talk here of cuts, then pensions are certainly not something that the Social Democrats accept," said Läänemets.

Thousands of public sector workers including police officers, rescue workers, teachers and border guards want pay rises next year.

Overcutting not supported

Läänemets stressed an equal sign cannot be drawn between state finances and economic policy.

"Finance is one part of economic policy, and the economy and the functioning of a country is a much more complex part. If you just sink into an Excel spreadsheet and look at it, the result is very likely to be that we can cut some of the important assumptions for growth," Läänemets said.

"This kind of big rush to cut back, rushing in without thinking through the consequences, is very wrong," he added.

For example, Minister of Foreign Affairs Margus Tsahkna, chairman of Eesti 200, has previously spoken about brutal cuts.

"Cuts can be made, but it has to be agreed where, for example, less bureaucracy can be cut in the state. But if we talk so much about cuts and difficult decisions, in the end, everyone in society will see how things that are necessary for society, things that are necessary for businesses, things that are necessary for the economy, can end up on the cutting room floor. And that does not make Estonia stronger, it makes it weaker," Läänemets said.

"Cutting back in this way means taking 1 percent less from research development, it means going after student scholarships, it means we have to take money away from strong state high schools. It means we will have one police patrol for every two counties in the future, " he said.

Expenses must be covered by income

Läänemets highlighted that when the government was formed, the budget strategy stipulated that approximately 75 percent of the missing money must be covered with revenues.

"Now there is talk of only 30 percent to be covered by revenues and the rest to be covered by cuts. This is the wrong logic, we have not agreed on this fundamental logic. And I do not think anybody in Estonia wants to do that," he said.

"It would be honest to admit that if you increase expenditure, you have to cover it with revenue. You cannot cut or close the state indefinitely," Läänemets said.

He said SDE is looking for places to make cuts, but it is not possible to cut €1 billion.

"In my estimation, there is also no 500 million to cut. But 100 or 200 million, that's where it can be done. Maybe even €300 million can be found with cuts. And we cannot go over the top. That is, arbitrarily, without thinking about what the consequences will be," Läänemets said.

Reform Vice-Chairman Jürgen Ligi told "Aktuaalne kaamera" on Monday both salary freezes and redundancies will likely be needed.

Some coalition members have suggested cutting up to 10 percent from all ministries next year.

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