In 2018, party leaders, scientists and business leaders signed a public agreement supporting an increase in research, development and innovation funding to 1 percent of GDP.

The draft 2027 state budget approved by the government on Monday does not provide funding for research at that level. According to the draft's explanatory memorandum, research and development funding will be maintained at the level agreed in the 2025–2028 state budget strategy: 0.97 percent of GDP next year. To do so, however, the government will reduce state budget funding for research and development by €2.5 million in 2027.

Education Minister Kristina Kallas said at a government press conference that research funding will total €455 million next year. The same amount is planned for research and development in both 2028 and 2029.

"It won't keep pace with the 1 percent target because, as a share of GDP, it will fall, even though the nominal amount won't," Kallas said.

According to Kallas, the final amount of research and development funding will become clear after Estonia reaches an agreement with the European Commission on its national plan. Negotiations with the EU over funding for the plan are still underway.

"Unfortunately, the agreement on the national plan will be left to the next government. This government has decided that funding cannot fall below €455 million, but any additional funding will depend on negotiations over external funds," the education minister added.

Kallas noted that external funding will run out in 2029, which would have led to a significant decline in research and development funding in the 2028–2029 state budget strategy. To maintain the €455 million allocation and avoid a cut in nominal terms, the government decided to add money from the state budget.

"So a substantial amount of state budget funding has been added, but it still won't reach 1 percent," Kallas said.

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