State budget – the first salvos of the battle

In the meantime, serious passions are in full swing. The fact that representatives of the opposition instantly trampled on the draft state budget submitted to parliament was not unexpected – given the degree of confrontation in society, they could, and should have, done it without looking. Having looked, the leader of Fatherland Urmas Reinsalu gave Prime Minister Kristen Michal a microscope so that he could see the real cuts in government spending that were visible only through it. The centrists declared that the 2025 budget would “sow poverty and destroy the middle class.” And the head of the national conservatives, Martin Helme, who at one time headed the financial department, called the project a “tax rally budget.”

However, this time the parliamentary opposition received strong support not only from obstinate businessmen who usually oppose any government, the list of which is more or less stable, but also from economic analysts, whom Finance Minister Jürgen League casually called something like “boring old men.”

No, among the critics of the state budget were State Comptroller Janar Holm and Chancellor of Justice Ülle Madise. Both of them noted the opacity of the budget and the impossibility, without special training, of understanding what and how the funds are supposed to be spent. The “root of evil” is known and lies in the very principle by which the state budget is compiled.

Let me remind you that after the crisis of 2008-2010, a new principle for drawing up the state budget was adopted. The model based on expenses and income was being replaced by a model based on activities, that is, structured by areas. The intentions, of course, were good – the initiators assured that the budget would eventually become more transparent, slimmer and more understandable. But they wanted the best, but it turned out… In a word, when the state budget of 2020 was for the first time completely drawn up according to new principles, it turned out that instead of being clear and understandable, the resulting document completely confused everything.

Voices demanding a return to the previous principle began to be heard almost immediately, and by now they were already heard in full force. The Chancellor of Justice generally doubted the constitutionality of the draft state budget for 2025 introduced by the government of Kristen Michal on the grounds that it does not contain the required expenditure lines to which deputies can make their own amendments. In other words, it is not entirely clear how to discuss the document, and the government, if the Chancellor of Justice insists on his assessment, will have to somehow get out of the situation created as a result of such a mistake. And in this case, the opposition will only have to fight against the adoption of the document as a whole instead of dealing with the budget item by item.

And criticism from within the coalition should be completely unpleasant for the government. Moreover, it was not made by confrontational Social Democrats, but by the most reformist of reformists, a member of the Riigikogu from the Reform Party, a member of the Finance Committee, Aivar Sõerd, who served as Minister of Finance in 2005-2007.

Syerd represents the old liberal-reformist guard, whose adherents keep the writings of Milton Friedman under their pillows. It is from these positions, on the right, that he criticizes the government, which is no better off from this circumstance. In this sense, Syerd is the heir of both Siim Kallas and Mart Laar, who have already left big politics, and an ally of the “Right”, who are still dreaming of a place in it.

Only the first volleys of budget battles have thundered, and today one can only guess the directions of offensives, retreats and maneuvers. Although it will certainly be a difficult task for the government to defend and maintain its positions. The opposition very rarely allowed the government to pass the state budget painlessly, and only when it did not want the cabinet to fall. This time, such a desire is undoubtedly felt – even taking into account the fact that the opposition parties are not acting together.

Behind the confidence of the ruling coalition, which, however, is not very clearly expressed, in fact lies obvious confusion, since its main and guiding force, the Reform Party, was not ready for a confrontation of such a scale, which began to corrode it from within. Under normal conditions, the state budget is adopted in late autumn, most often in December. So there are still two or three months left. You can wait until February-March next year, when the deadline and the moment of truth arrives. And then that’s it.