Governor of the Bank of Estonia Madis Müller has suggested that all political parties agree to reduce Estonia's deficit and balance the budget, as the rate of debt continues to increase.

Michal addressed the idea at the government's weekly press conference on Thursday, saying he would make a proposal to the other parties in the Riigikogu.

"I am also proposing to the other parties and to those on the opposition side in parliament who want to discuss this, that instead of drawing up various declarations, which in politics are good until they meet practical decisions, we write into the State Budget Act that we will begin reducing the deficit by half a percent per year," he told the assembled media.

Michal gave the example that if the permitted budget deficit next year is 4.5 percent, then the deficit could be reduced to 4 percent.

"Then to three and a half, then already three and then two and a half and so on. This is actually also the pace that gives the economy sufficient breathing room when we tighten the deficit, so that we do not immediately choke the economy, but steadily tighten the deficit. And now, I think it is already possible to start doing this because the economy has turned to growth," the prime minister said.

"Economic growth now appears to be continuing despite the Strait of Hormuz and everything else, and it would probably also be possible to begin tightening the deficit, and we will probably have to start," Michal added.

He noted that moving toward budget balance in half-percentage-point steps is similar to previous budget rules, which were temporarily lifted by the EU to allow member states to divert funding to defense.

"We can start tightening because by 2030 we have to be within -3 percent, and that is how we would get there," he said.

However, Minister of Finance Jürgen Ligi (Reform)said experience shows political parties do not stick to such agreements.

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