Municipalities can decide until the end of November if they want to sign the agreement with the Ministry of Education.

Urmas Klaas, deputy head of the Association of Estonian Cities and Rural Municipalities, said: "At one point, the funds were moved to the government's reserve — this information was available on Monday. By Tuesday, however, it became clear that the funds were not moved to the government reserve for this specific purpose, meaning there are no financial guarantees for this initiative. I have not heard any definite confirmation that anyone is ready to sign off on it."

Among others, both Elva municipality in Tartu County and Rae municipality in Harju County are skeptical.

Heiki Hansen, assistant mayor of Elva, said: "Sixty percent of education expenses should be allocated to teachers' salaries. Currently, in Elva municipality, this figure is 57 percent, and raising it by 3 percent would mean an additional €270,000 per year for us. If the idea behind this is that it is a goodwill agreement and essentially, 'you don't have to do it if you don't have the money,' then I would ask, what is the point of signing a goodwill agreement if it's clear from the start that there are no finances to fulfill it?"

Mart Võrklaev, a member of Rae Council and former finance minister, said the minister had said €150 million is set aside for salary rises – a sort of buffer.

"However, when I asked for a specific budget line, she could not point to one. So, I have two questions: If such a line does not exist in the budget or budget strategy, are we making unfunded promises to local governments and teachers? And if such a line is hidden somewhere in the budget, then my other question is: How, at a time when the budget is in significant deficit and we are saying that we need to raise taxes, including corporate taxes for defense spending, can there suddenly be such a buffer?" he said.

Minister of Education and Research Kristina Kallas (Eesti 200) said the agreement will enter into force in 2026 and the money for it allocated in next year's budget. Pay rises are included, she said.

"Currently, it is projected that some additional funds will become available to the government in the state budget, as the economy is expected to return to growth in 2026. However, if we do not make cuts now, then, of course, the additional revenue generated from future economic growth will go toward covering the shortfall created by the unmade cuts," Kallas explained.

If the additional revenue ends up covering budget cuts, Kallas said she will need to make further cuts within her own area of responsibility.

"As things stand, I know that most parties are prepared to sign. However, there are still major concerns on the part of local governments. There was hope this time that municipalities would come on board and support efforts to address the issue of teacher retention in Estonia. I still very much hope they will sign on," the minister said.

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