Social Democrats now questioning planned social budget cuts too

Social Democratic Party (SDE) chair and Minister of the Interior Lauri Läänemets maintains that he will not agree to €6 million in cuts within the Interior Ministry's administrative area, but would be willing to immediately agree to cuts in the same amount from other sectors. Social Democrats likewise want to discuss social sector cuts to ensure they don't reduce pensions in the future.
According to Läänemets, more than 90 percent of the Estonian government's supplementary budget has been agreed on. Even so, he doesn't understand why internal security has now been latched onto with the desire to cut €6 million from it.
"Why don't we then make as big of a deal out of the fact that there was initially a proposal by the finance minister to take €8 million away from national defense this year, and when the Social Democrats said that it isn't sensible to cut from any part of security, then that number has disappeared," Läänemets told ERR on Monday.
"But for some reason, the finance minister and prime minister think that [funding] should be taken from internal security," he continued. "I disagree. That's a very half-baked approach, because we also need to take into account that every military crisis requires the preliminary modeling of domestic situations. If you look at Ukraine, if you look at any other country, war is always preceded by the shaping of people's attitudes and undermining their sense of security."
Läänemets noted that the National Defense Council met last week, and the Estonian Foreign Intelligence Service (EFIS) provided the council with a very clear description of what is going on in Europe and what Russia's plans are.
"It's also been widely reported in the media that Russia is rather planning to employ more, not fewer, various elements of hybrid attacks," he added.
The SDE chief believes that the government should collectively figure out other areas to find the necessary money, and noted that his party has even made a number of proposals, so far without results.
"We've proposed that overhead cuts in other ministries could be increased by this amount," he highlighted. "We've suggested that we take a look at [Estonia's] detention facilities too, meaning the situation in which we have 1,800 prisoners and 1,200 prison staff. Meaning one and a half prisoners for every prison staff member. That's perhaps too personalized an approach for the state."
Läänemets likewise clarified that not wanting to make cuts within the Ministry of the Interior doesn't mean that the SDE isn't prepared in general to make any cuts, citing cuts within other ministries.
"The Social Democratic minister Riina Sikkut is going to make those overhead cuts," he pointed out, referring to the minister of health. "[Minister of Regional Affairs] Piret Hartman is doing it within the Ministry of Regional Affairs [and Agriculture]. The health minister likewise has a plan, regardless of what the finance minister has proposed, for how to save an additional €20 million annually with efficiency in healthcare."
No one should be left with the feeling that the SDE doesn't want to do anything, the party chair stressed.
"On the contrary, we are doing [things] and we may even be doing significantly more than some administrative areas, but that's not what's important," he said. "The important thing is that we not get stuck on this idea that every party's minister has to do the same thing; the ministries are very different, the situation in the country varies significantly, and needs vary significantly as well."
Läänemets mentioned that he liked what the CEO of Coop Pank said about how Estonia doesn't need a government to make uniform overhead cuts, that a machine could do that.
"Leaders are needed to decide where priorities lie," he said. "That is what should be at the heart of this current dispute or debate – whether security is a priority, or whether the goal is to be stubborn and say no, internal security must be defunded by hook or by crook."
When the three coalition parties – Reform, Eesti 200 and the SDE – might reach an agreement on the budget, Läänemets was unable to say. He noted that the Social Democrats have long since been prepared to compromise, but the other parties haven't wanted to reach an agreement.
"How the process is being managed, what the schedule is, the plan – surely the finance minister or prime minister can tell you that," the interior minister commented. "I guess it seems like there's still been time, if we've been able to remain stuck on this one thing for so long."
Questions about social budget cuts
In addition to the unwillingness to cut funding from internal security, Läänemets said that the Social Democrats still have questions about cuts in the social sector.
"Whether there is a future impact on pensions or not – that's what we need to figure out," he explained. "2024 is fine, but 2025, 2026 – can we do something permanent now if it means we have to take from pensions next year? Perhaps this merits substantive discussion too."
Estonia's ruling coalition is currently discussing the possibility of reducing the budget deficit by €175 million this year, which would bring this year's budget deficit to 3 percent GDP and thus into compliance with current EU budgetary rules. According to the plan, part of this would come from public sector cuts, and part of it from extraordinary dividends of state-owned companies.
The coalition is in a hurry to reach an agreement because in order to make any further cuts for the rest of the year, the government must submit its decision to the Riigikogu for adoption as quickly as possible. The coalition council is set to discuss the €175 million negative supplementary budget on Monday afternoon.
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Editor: Huko Aaspõllu, Aili Vahtla