Andrus Kaarelson: Estonia Must Cut Spending Sooner or Later

Andrus Kaarelson, representing the Parempoolsed party, argues that tax increases have not solved budget problems in any country, including Estonia. Over the past three years, the government has introduced nearly 30 new taxes and charges, yet the budget deficit remains the deepest in history.

According to Kaarelson, parliamentary parties are not ready for painful cuts, and some leaders even talk about lowering taxes while increasing benefits. Prime Minister Kristen Michal did not attend party leader meetings, and his government sent a supplementary budget that increases spending.

International organizations, including the OECD and IMF, have expressed concerns about Estonia's fiscal stability. National debt has risen from 9% of GDP in 2019 to 25.9% this year and could double by 2030, reaching 39% of GDP.

For comparison, Finland failed to make necessary cuts 20 years ago, and its debt now stands at 89% of GDP. Finland's right-wing government is now implementing extensive cuts to stabilize debt by 2027.

Kaarelson accuses the Reform Party of misleading the public nine times, as they had promised balanced budgets before elections but raised taxes afterward. State expenditures have increased by nearly 50% in five years – from €13.63 billion to €19.5 billion.

He also warns about rising interest payments: in 2022 they were less than €30 million, but could reach €650 million by 2030. Kaarelson calls for a concrete cut plan from the government to restore Estonia's fiscal health.