Estonia Drops Tax Hike for Budget Cuts in Longest EU Recession

Estonia’s government plans more spending cuts after scrapping the introduction of new tax hikes to help curb the budget deficit amid the European Union’s longest recession.

Prime Minister Kaja Kallas’s administration had planned to expand the tax burden to fill a shortfall seen at €430 million ($470 million) in 2025. But that position is changing after the central bank said the economic contraction that’s already lasted seven quarters will continue into next year, with unemployment set to climb to 9%.

“We’ve reached the Estonian people’s ceiling for further tax hikes,” Finance Minister Mart Vorklaev said in an interview. “I ...