Minister of Finance Jürgen Ligi (Reform) has said deficit reduction is the main focus during the 2025 state budget bill drafting process.

"In every sector there are major issues, but my overriding concern is still the deficit. We have been living with a long-term deficit, the problems have mounted up and everyone needs to rein in their spending," Ligi told "Aktuaalne kaamera."

Diminishing the deficit will involve the government implementing cuts as proposed from the 11 ministries, rounds of tax hikes and also taking into account the finance ministry's latest economic forecast – in fact in presenting the latter, the discussions will begin, Ligi said.

"The coalition negotiators have set out the stakes for us, and it's my responsibility to defend them and eventually bring everything together," he added.

The negotiations between Reform, the Social Democrats (SDE) and Eesti 200 as always are likely also to bring out the differing ideologies of the three coalition partners.

"I think we should start from what the key party leaders agree on. There's no need to make things harder on ourselves," Ligi said on this.

SDE chair and Minister of Interior Lauri Läänemets stressed the importance of regional balance for his party, something which he called "crucial."

"We should focus on cuts in areas where more well-off people live, where more GDP is generated, and where less state support is required," he said.

Agreement is needed on tax changes which would make the most positive impact on economic growth, he said.

Prime Minister Kristen Michal (Reform) has pledged an end to the "tax festival," though Minister Ligi's recently announced idea of taxing wage funds is expected to spark a new debate within the budget negotiations.

Läänemets said that his party was "open to discussing this, of course," but has also put forward its own three alternative options.

"So Jürgen Ligi's proposal will certainly not be the only one we discuss," the SDE leader went on, while foreign minister and Eesti 200 chair Margus Tsahkna has also said that he wants to see impact analysis of Ligi's tax proposal.

Andrus Ansip, who was prime minister during the global financial crisis of a decade-and-a-half ago, told "Aktuaalne kaamera" that the negotiations should address uncertainty, and that there is room to move towards a balanced budget – for a long time a Reform Party norm.

"If the budget volume has doubled in the last ten years, this means there is considerable room for cuts. We won't get out of this crisis via tax hikes alone; cuts are surely needed," Ansip said.

The new austerity budget for 2025 legally has to be ready in bill form by the end of September.

It is then processed at the Riigikogu, with a view to passing its third and final reading before the legislature breaks up for the winter recess in mid-December.

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