Minister of Economic Affairs and Information Technology Tiit Riisalo (Eesti 200) said the total amounts to €12.9 million. The budget for MKM's area of administration is €1.4 billion.

"But the truth is that €930 million of that is the Unemployment Fund, so that is out," Riisalo added. "The other big chunk, or €273 million, is the euro funds and their co-financing. Cutting this is not meaningful and does nothing to balance the state budget."

Approximately €78 million of the budget is intended for research and development activities.

"This leaves us with 125 million euros, in which we are doing a cutting exercise," said Riisalo.

Operating cost reduction – which all ministries need to make – €1.5 million from the MKM budget, and a further €2.5 million from the reduction in additional requests approved last year. This will be compounded by a reduction in research and development funding.

"Then there is a 5 percent cut from foundations. Our share there is €776 000. And because there wasn't enough of that, they were looking for places where they could make savings in the context of the Estonian state. This 5 million comes from additional allocations to the Entrepreneurship and Innovation Foundation," said Riisalo. 

Cuts affect EISA programs

The minister said the EISA foundation's cuts will affect the programs it runs and grants it allocates.

"I would like to underline that the vast majority of these programs or activities have also undergone ex-ante evaluation according to the methodology of the Ministry of Finance. Perhaps they should return that money to us in the short or long term. But clearly, challenging times, let's look at what will do as little harm as possible," said Riisalo.

He said they will soon start studying how costs will be cut in EISA. Of the €33 million allocated to the foundation, €5 million is set aside for operational costs. The rest goes to different programs.

"These include activities to promote tourism, support for bringing concerts and major events to Estonia, the e-residency program, attracting foreign investment, the Work in Estonia program – the list is not too long. That's where we have to make this choice," said Riisalo.

EISA's management will be tasked with making the savings plan.

Plan to be announced on June 13

Riisalo did not comment on MKM's plans. He said the ministry has until next week when the draft supplementary negative budget is sent to the Riigikogu to decide.

"We have made our contribution, and in the future, certainly in the negotiations on the next state budget, we would like to stand up for those activities that support the economy to be approved," said the minister.

Riisalo maintains that EISA has received too much criticism. A plan will be put forward on June 13.

"To make sure that this organization is strong, that it is operational and that the reform that has been going on for several years can be completed," he said.

In April, Riisalo said EISA's new head Kati Kusmin must create a plan for how to move the organization forward.

"We've been talking about these topics, but I do not have a final slideshow and maybe I do not need to. First of all, EISA does not only serve the administration of the Ministry of Economic Affairs and Communications. The other side is that it is also, by its very nature, quite a complex institution. In some ways, it is also logical that such a reform will take a little longer to complete," said Riisalo and noted that the ministry also plans to change the expectation document set for the foundation.

The government will make €175 million worth of cuts this year as it tries to reduce the deficit to less than 3 percent. The coalition reached an agreement this week that the Ministry of Defense and the Ministry of Interior will only make cuts to operating costs.

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