Kallas told "Aktuaalne kaamera" that since the European Union now allows security expenditures to be excluded from the budget deficit calculations, there is no longer a reason to introduce a defense tax.

"If we can now exclude defense expenditures amounting to 1.5 percent of GDP from the budget deficit, this gives us the opportunity to avoid raising taxes with such a heavy burden," Kallas said.

She said the new government will not simply fill the positions left vacant by the Social Democrats but will reorganize ministerial positions.

"This agreement will be finalized on Friday. On Saturday morning, we will present our ministerial candidates to our party boards. This cabinet cannot be reduced to fewer than 13 portfolios because all policy areas must be covered. Currently, we have 14 ministers and one position can be cut," the party leader explained.

"We have made unpopular decisions, which is why our ratings have been low. We did not promise tax increases to our voters, but the situation is such that we had to take responsibility for the country's financial state. You make these decisions, you take responsibility! Today, we no longer have ideological disputes, so I believe we can make further unpopular decisions more effectively than in the previous government. Back then, we had conflicts with the Social Democrats over regulations and taxes," Kallas said.

Kallas criticized past coalition negotiations for setting goals without calculating how to actually implement them.

"Our demand was to spend more time on each issue — more than just half a day — to determine how we will address problems related to the Health Insurance Fund, the school network, higher education and public transportation," the chairman said.

She also noted that the local elections are not a decisive moment for Eesti 200 — the real test will be the 2027 Riigikogu elections.

'Esimene stuudio': Healthcare funding needs structural change

The Estonian people expect the government to start working and to bring about changes, Kallas said, appearing on "Esimene stuudio." She confirmed that she will continue as minister of education in the new government.

Speaking about the healthcare funding crisis, Kallas stated that the sector needs structural reforms. "No one is under the illusion that we will receive an extra €200 million every year because national defense is currently the biggest financial priority," she said.

Coalition negotiations on education will begin next week in Tartu. "I cannot imagine a scenario where we leave teachers' salary increases out of these negotiations. I have been strict with ministry officials and have not promised a pay raise, but people cannot endure this situation indefinitely," Kallas, who is also minister of education and research, told the show.

According to Kallas, there are no disagreements between Eesti 200 and the Reform Party regarding taxes, but debates on higher education funding could be lengthy.

Eesti 200 has not set any red lines but insists on real reforms. "If the Reform Party does not want real reforms, then there is no point in Eesti 200 being in the government," she said.

On the topic of pensions, Kallas stressed the need for honesty with the public, stating that the current pension index, which includes extraordinary pension increases, is not sustainable.

"Pensions are growing faster than we can support through economic growth. As a result, we are moving toward an unsustainable budget position. There are two possible solutions: either raise the retirement age or exclude extraordinary pension increases from the index to slow down pension growth," the minister explained.

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