Estonia's financial situation was discussed during Tuesday's discussions.

Prime ministerial candidate Kristen Michal (Reform) said, due to the difficult situation, all ministries must be prepared to save money. This includes the defense and interior ministries which had previously been spared.

"During the initial consultations, we have taken the stance that we will not cut capacity. This means that there will be no cuts in the capabilities of the Defense Forces or the police who deal with internal security. But anything that relates to administrative activities in the ministry, whether it's missions, or foreign missions or conferences, or any other administrative costs, they could also be reviewed," he told journalists at a briefing on Tuesday evening.

Both Michal and Eesti 200 Chairman Margus Tsahkna said that most likely ministries and institutions will be given a percentage of cuts to implement.

Tsahkna said, for example, it could also be decided that no new jobs will be created.

"And secondly, the percentage cuts, so that a percentage cut is to be given to the salary component, a percentage cut is to be given to the management costs, according to the sector or division. This should be calculated. Here, everybody has to contribute," he said.

Michal added: "We are likely to set this for the coming years. We are not just talking about one cut, we are talking about cuts this year, next year and the year after that in different agencies."

Tsahkna said it is also necessary to review indexation, which is connected to pay and pension rises.

"We need to look at the indexations that are built into the base budget with different national expenditures that automatically increase. Which does not mean direct cuts, but lowering the future cost of things," he said.

SDE Chairman Lauri Läänemets said his party would not agree to freezing pensions.

"I think it is going to be very tense on that front. The Social Democrats certainly cannot agree to a pension freeze. And if there are some more of these cutbacks, where we take away a lot from vulnerable groups in society, it will be difficult to reach an agreement," he said.

The ministers also discussed a new national defense tax, which is likely to be made up of several taxes.

On Wednesday, the coalition members will talk about security and foreign policy. Cuts and savings will be discussed again in the second half of the week.

Negotiations are expected to continue until the end of the month.

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