On Wednesday, the government approved next year's state budget, which has a deficit of 4.5 percent of GDP. Budget revenues are projected to be €18.6 billion, expenditures €19.5 billion, and investments €1.3 billion.

The state's four-year fiscal strategy foresees a sharp rise in public debt, which will drive annual interest payments up from the current €184 million to €464 million by 2029.

Rink described the new budget as a shift in gears aimed at enabling economic growth and moving life forward.

"For the last three or four years, we've clung to the idea that the budget deficit should be as small as possible. It's been a time of crisis, a difficult period, we're in the red, but every tax hike and cutback has been driven solely by the aim of balancing the budget. We tried that in 2023, 2024, and 2025, but the economy has not started growing," he told the morning show "Terevisioon."

Rink is pleased that the state has now started to try something different.

"The budget is based on doing everything possible to ensure the state is protected and the economy starts growing. The decision to cancel tax increases and eliminate the tax hump will result in people having more money left over, money we will use to shop. And when we shop, we buy goods that need to be produced. That's what drives economic growth," said Rink, who has also been nominated as a candidate for president of the Bank of Estonia.

"We could finally break out of this €40 billion GDP trap. If at some point GDP reached €45 billion or €50 billion, then in principle, the state would collect about a third of that in taxes. The hypothesis is that if the economy grows, we will generate more tax revenue and use that to pay back loans and interest."

Commenting on the government's borrowing plans, Rink said that taking out loans to cover temporary budget shortfalls is reasonable, but it is crucial that the shortfalls truly are temporary.

"If we are in a tough spot right now, then yes, we take out a loan, but we should have a plan for how we will pay it back. That part is a bit murkier. It is based on the hope that the economy will grow, that more money will come into the treasury, and that the loans and interest will indeed be repaid. Now we have to keep our fingers crossed that the hypothesis holds," he said.

The former Coop CEO believes the new course will work and measures will improve the state of the economy.

"It would be logical if this leads to increased consumption, economic growth, a broader tax base, and our ability to pay off the loans and interest. If that does not happen, we are still left with two levers: increase revenue, meaning renewed talk of tax hikes, or cut spending. We have spent the last three or four years seriously engaged with those two, but we have not done very well. We have plateaued in terms of economic growth," Rink said.

He also praised the government for leaving the car tax untouched, as he considers it a very justified form of wealth tax.

Lauri Punga, an analyst from the Fiscal Council who joined Rink in the "Terevisioon" studio, was much more reserved in his comments on the budget.

"This experiment comes at a cost," he noted. "Next year's budget deficit is €2 billion, which is unprecedented in Estonia. Over the next four years, the total deficit will be nearly €8 billion /.../ The deficit is very large, persistent, and there is no certainty about how we will emerge from it three or four years down the line."

He stressed that fiscal rules help maintain budget discipline and provide a degree of certainty and predictability:"I would have preferred that domestic fiscal rules remain in place in the coming years as well."

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