Commenting on the development, Finance Minister Mart Võrklaev (Reform) said: "The objective of this supplementary budget is to keep state finances on a sustainable path, as we had set out in our coalition goals, and decided on while preparing the 2024 state budget."

The supplementary budget is a negative one made up primarily of cuts, consisting of approximately €115 million in austerity measures plus €68 million in revenue measures.

This includes a €29 million reduction in the government's reserve.

Minister Võrklaev added that cutting the budgetary deficit was laying the ground for the 2025 state budget, "where 80 percent of the measures must be of a permanent nature and aimed at reducing future budget deficits."

The government sector's budget deficit this year will reach €1.19 billion, or 3 percent of GDP, once the under-process supplementary budget is factored in.

A budget deficit of no more then 3 percent of GDP is the EU benchmark.

All ministries are to contribute to the savings, involving their subordinate agencies and foundations where possible, and totaling around €63 million, the minister said.

While previously the Ministry of Defense had been earmarked to be exempt from cuts given the security situation, it will see reduced personnel and overheads costs, which will come to around €4.6 million, the minister said.

No major investments are to be canceled as a result of the supplementary budget, the Võrklaev added.

Savings will include that proportion of research and development which exceeds 1 percent of GDP according to the spring forecast, totaling an estimated €19 million.

Hospitals are required contribute to savings by reducing their operational costs by 1 percent, though museums, theaters, concert foundations and public legal entities will not be affected.

Dividends from the State Forest Management Center (RMK) and grid distributor Elering AS will also be raised.

The supplementary budget must pass two more readings before it can be sent for assent from the head of state, but since the Riigikogu finishes for summer recess on Thursday, those readings are likely to be concertinaed into this week.

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