# Estonia's parties betting on tax cuts, AI and demographics ahead of 2027 elections > Source: > Published: 2026-08-09 06:43:00+00:00 # Estonia's parties betting on tax cuts, AI and demographics ahead of 2027 elections Reviving Estonia's economy, reversing the decline in the birth rate and ensuring national security emerged as the key issues ahead of the 2027 elections at Opinion Festival's party chairmen debate. Prime Minister Kristen Michal (Reform) highlighted national defense and revitalizing the economy as his most important goals. "When I formed the government, I promised two things: first, that Estonia would be firmly defended. To the extent that it is in our hands, it certainly is. We have had to do many different things to fund defense spending, and we are probably now paying a price for that in terms of popularity — there is no doubt about it. But I think that when history looks back, what matters is what you have done, not what people happen to be saying at the moment," the prime minister began. Michal's second point was economic growth, which he said cannot be credited solely to the government or politicians. "It is certainly cyclical, and as a small, open economy we are particularly dependent on our partners. But economic growth means that people and businesses have more money on payday. At the beginning of this year, Estonia saw the largest tax cut in its history, which certainly provided this momentum. We want to pursue the same policy — Estonia is defended, the economy grows and the people of Estonia become wealthier," Michal emphasized. The prime minister's third priority was looking to the future, including a clean natural environment, new technologies and innovation. "And also a sound set of values. I am under no illusions — I understand that these elections will be a repeat performance by the same old EKRE-IKE band (former coalition of EKRE, Isamaa and the Center Party — ed.) /.../ We want to preserve the same liberal democratic values on which Estonia was built. Estonia has been a forward-looking country, not one that looks to the past for solutions," Michal concluded. **Isamaa** Urmas Reinsalu, chair of the Isamaa party that currently tops party ratings, said trust needs to be restored in society, starting with the country's economic outlook. "Generating economic growth cannot simply be a slogan; it has to begin with restoring optimism among investors and entrepreneurs. Isamaa's first message is that, unfortunately, the government has done everything it can to suppress that economic growth. Economic policy cannot be based on simply making the economic outlook more fragile. That has to change fundamentally; we need a fundamentally different approach," Reinsalu said. Reinsalu's second priority was providing families with a sense of security and restoring the purchasing power of families and individuals, while also giving people the freedom to start families and develop themselves. "Third is an unconditional commitment to Estonia's national defense. Isamaa has always supported — whether in opposition or in government — the steps necessary to restore and ensure Estonia's military security, internal security and civil protection. We intend to continue doing so unconditionally after the elections," Reinsalu said. **Parempoolsed** Non-parliamentary Parempoolsed chair Lavly Perling said she had been making the same point for four years: words are not enough; they must be turned into action. "When we talk about defense spending, it cannot be the case that only 27 percent of the taxes collected for it actually get there. Words are not enough; decisions and actions are needed. We have said very clearly that our Estonia is free, prosperous and Estonian-minded. How do we achieve that? Through lower taxes and greater freedom — more freedom, fewer taxes. When we talk about tax increases, we are talking about taking away people's freedom to decide for themselves how to use their own money," Perling said. Perling said government spending needs to be cut to restore people's sense of security. "We need to start talking about the fact that our state budget is on an unsustainable course. Everywhere you turn, you are starting to hear what I have called a marketplace of promises. Urmas promises lower taxes and more benefits, while on the other side we once again hear the same kinds of promises we heard four years ago. We are not offering sweet talk; we are saying that we need to start making difficult decisions. We need to do that so the next generation inherits a prosperous and exciting Estonia — that is what drives our decisions," Perling emphasized. EKRE chair Martin Helme said Estonia's biggest concern is its natural population growth, as well as demographics more broadly. **EKRE** "If we look at what has just happened again in Spain, the immigration crisis that EKRE was talking about 10 or 11 years ago has not gone anywhere. Over the past decade, more than 50 million Africans and Muslims have arrived in Europe. This is no joke. We talk about having an immigration crisis in Estonia, with various illegal immigrants scurrying back and forth; the situation remains critical and is getting increasingly horrific. Addressing immigration at the level of the nation-state and the national border is extremely important. Hiding behind the Schengen border means, quite frankly, abandoning your responsibility for Estonia's security and the safety of its people," Helme said, adding that immigration is only one part of the problem, because if Estonia fails to raise its birth rate, the country has no future. "If Estonia has no future, it no longer makes any difference who carries on here — whether Chinese, Arabs or Ukrainians. Everything else, whether tax debates or security debates, becomes irrelevant, because if there are no Estonians left here, all of this becomes someone else's problem. Natural population growth is therefore critically important, and that means family and population policy," Helme explained. Helme said the coalition had failed on national defense because it had spent large amounts of money without having anything to show for it. "First you drove the Estonian economy into contraction for 13 consecutive quarters, and now you are crowing because it has posted a small increase for a second quarter in a row. The people who messed things up cannot be the ones to fix them. Donald Trump shows us the way on economic growth: low taxes and little regulation. Of course, if the earlier question was what we should give up, there are some very easy choices. We will give up the green transition, give up Rail Baltica and give up hundreds of millions in foreign aid that, in reality, makes its way back through corrupt channels," Helme concluded. **Eesti 200** Eesti 200 chair Kristina Kallas said Estonia's economic growth problem is low labor productivity. "That means that, figuratively speaking, in one hour of work an Estonian can make seven table legs, while a German can make 100. Labor productivity is simply low. The countries that can bring technology into their economies quickly and intelligently will be among the winners. I do not think Estonia should be embarrassed about the state helping businesses invest in AI technologies, whether through guarantees or growth funds. Those wishing to invest in artificial intelligence could receive state-backed loan guarantees or other forms of support from funds. I consider this extremely important because that is where the next leap in economic growth will come from," Kallas said. Responding to Helme, however, Kallas said the greatest problem of the century is instead climate change and the disasters it causes. "These affect both our economy and our population, including migration. Moving away from fossil fuels and transitioning as quickly as possible to 100 percent renewable energy production is critically important. This is important not only in terms of fuels, but also for the natural environment and biodiversity," Kallas said. **Center Party** Center Party chair Mihhail Kõlvart said the tax system should not be used simply to collect money so that it can later be redistributed. The tax system should regulate the economy, but Kõlvart said no such system exists today. "When it comes to the economy, the most important aspect is political decisions that do not regulate the economy but steer it — and in my view, that is not a focus at all today. If we compare ourselves with other countries, such as Latvia, Lithuania and Finland, over the past four years there has been an understanding that there need to be priority sectors in which the state invests, where it changes legislation and provides appropriate regulation," Kõlvart said. Kõlvart also noted that every coalition agreement over the past 20 years has included a pledge to attract investment, but that there has never been any systematic effort to do so. "Lithuania shows that it can be done. In a short period of time, 300 financial companies have entered the market there and 8,000 jobs with top-level salaries have been created. All of this has a real impact on the economy, and this is not the only sector. It does not work by simply offering artificial intelligence to the economy and expecting it to solve everything. That requires a little intelligence of our own as well. It often involves risk, but you have to take responsibility and identify the sectors that can drive the economy. Lithuania has made those choices, whether in the chemical industry, financial sector, transport or logistics. The state invests, creates a system and then love follows," Kõlvart joked, adding that middle-aged or older men often talk philosophically about love and demographics, when in reality it is a mathematical problem. "Over the past 35 years, there has not been a single year in which the fertility rate was 2.1. Four years ago it was 1.4; today it is 1.1 or 1.2. This is a mathematical projection, not some kind of rhetoric. If this continues, in 20 years we will have a demographic hole, but the consequences are already here. This must be our nation's top priority," Kõlvart said. **SDE** Social Democratic Party chair Lauri Läänemets said his party's most important priorities for the next electoral term are, above all, ensuring and improving people's well-being. "That does not apply only to those who are struggling the most; we always talk about the average Estonian family. You could call it an uncompromising economic focus on investment. First and foremost, that means an uncompromising focus on investing in human capital. We know that regardless of which economic expert we listen to — and many people here today have also talked about this — an aging society needs to keep people in the labor market for as long as possible if it wants long-term economic growth," Läänemets said. According to Läänemets, talk of taking money away from healthcare actually means taking people out of the labor market, as people become sicker and contribute less. He said this is why investment in healthcare and education is needed, including efforts to curb educational inequality and ensure that tuition-free higher education is accessible to everyone. "Then there are investment incentives for businesses — not only financial support, but diplomatic assistance and all other forms of support as well. We continue to support investment and business activity without compromise. Ultimately, investment is needed in energy and in modern, accessible electricity generation, because this is currently one of the most significant factors holding back Estonia's economy," Läänemets said. Läänemets also highlighted security, not only in the military sense, but also internal security and people's sense of security. "When it comes to that sense of security, I would add something that has already been mentioned here and that I think a large part of today's audience also feels — environmental and climate issues. When we talk about having children, we cannot rely on benefits alone, because the issue is one of security. Can I be certain that a child I bring into the world here will have every opportunity in the future? We cannot deny problems in which climate change is already forcing European nuclear power plants to shut down and causing populations to move. Incidentally, I think Martin Helme is looking in the wrong direction when he looks to Africa in discussing the immigration problem. The first climate refugees will come from Southern Europe," Läänemets said. According to Läänemets, for example, Germans and French people will move to Northern Europe because of the heat and buy up local real estate for large sums of money, which will in turn drive up property prices. "All of these things are caused by climate change, and action is needed to ensure families — especially young families — have a sense of security and confidence in their future," Läänemets said. -- Editor: Johanna Alvin, Marcus Turovski