Estonia approves draft 2027 budget with over 5% of GDP for defence

Expenditure €20.2bn, revenue €19.4bn, deficit 4% of GDP; defence €2.2bn (over 5% of GDP); tax burden falls to 35.2%

Prime Minister Kristen Michal explains the deficit of 4% instead of the permitted 4.5% by a further €250m left unspent; the 10% cut in government spending agreed for 2025-2027 continues. Of the defence funds, €632m go to air and missile defence, long-range strike, artillery and ammunition, of which €100m for drones; the budget also postpones the completion of Rail Baltica. Parliament still has to approve it, and elections are due in March 2027 (ERR, 28 Sep 2026).