Estonian Prime Minister Kristen Michal, of the Reform Party, announced on Monday that he would expel the Social Democrats from the ruling coalition over disagreements over tax policy, Reuters reported. This leaves Michal and his allies with a fragile parliamentary majority. “At a time when urgent decisions need to be made, one cannot keep going back to the basis for these decisions and endlessly asking for their revision,” the prime minister said at a press conference. The government will remain comprised of representatives of the Reform Party and Estonia 200, which have a total of 52 seats in the country's 101-member parliament, Michal said, quoted by Reuters, BTA reports.
The three parties were coalition partners for almost two years after agreeing to form a government after the 2023 elections. Initially, the reformist leader Kaia Kallas was prime minister until she was nominated as the European Union's high representative for foreign affairs and security policy. After that, the leadership of the party and the government passed to Kristen Michal.
“It is clear that there were two right-wing parties and one left-wing party in the government. Some decisions need to be made quickly and Estonia needs to move forward,” the prime minister said, quoted by the leading national daily “Postimees”. Michal assured that his reformists and “Estonia 200“ will draft a new coalition agreement that will focus on security and the economy, and will divide ministerial portfolios.
Currently, there are four Social Democratic ministers in the government - of the Interior (and party leader) Lauri Lanemets, of Regional Development and Agriculture Piret Hartmann, of Infrastructure Vladimir Svet and of Healthcare Rina Sikut.
At the same time, Michal revealed the new plans of the reformed coalition, the Russian-language portal “Gazeta.ee” reported. “The first thing we plan to do is to cancel various tax increases, including corporate income tax,“ Kristen Michal said at a press conference. “It is desirable to reduce the tax burden on individuals. Starting next year, every euro was supposed to be subject to income tax, but that won't happen. Income tax will indeed increase to 24%, but it won't be levied on the first euro," Michal noted. The changes will also lead to the abolition of corporate profits taxation. "Entrepreneurship must have the opportunity to develop," the prime minister stressed.
According to the portal "Baltnews", the rating of the current government coalition has fallen to a record low, with polls showing just over 32% of citizens supporting it. The publication also quotes Foreign Minister Margus Tsahkna, who said days before the Social Democrats left the coalition that the three parties had been unable to resolve their conflicts for several months.
The chairman of the Social Democratic Party, Lauri Lanemets, described the Social Democrats' removal from the government as a "stab in the back," Estonian Public Radio (Eesti Rahvusringhaling - ERR) reported. He also noted that as Prime Minister, Kaia Kallas stands by her coalition partners even in difficult times, while Kristen Michal's approach is completely different. "The Reform Party is really trying to save its ratings, so it is trying to blame the Social Democrats for all of Estonia's problems, hoping that this will somehow improve the situation," the Social Democrat believes. “I personally went to the prime minister at the beginning of the year and said that we need to take measures for the economy. Now he's talking about everything being at a standstill because of us, the Social Democrats, what is that? A stab in the back!“, Laanemets pointed out.
The Russian-language portal “Rubaltik” provides details of the disputes between the parties in the coalition. In addition to taxes, one of the most controversial episodes was the Social Democrats' opposition to subsidies for offshore wind farms. There were also constant disputes between Michal and Agriculture Minister Hartmann. The issue of the voting rights of the Russian-speaking population in the country, which remained in it since before the collapse of the Soviet Union, is also proving to be thorny.
The opposition in Estonia reacted to the Social Democrats' exit as something expected.
The trust of Estonians in the current ruling parties has reached a historic low and the planned changes in the government will not change the situation as a whole, said the leader of the opposition Center Party, Mikhail Kolvart, quoted by the newspaper “Arypäev”, who called for early elections. “Discussing whether the Social Democrats will remain in the government or not is pointless. The parties in the ruling coalition have proven with their actions that they do not have a real plan for economic recovery, development of the security sector and possible cost savings. The leaders of the coalition parties must show statesmanship and initiate early elections. "Estonia needs a government with a mandate to implement its decisions," the opposition member said.
The chairman of the nationalist Estonian Conservative People's Party, Martin Helme, also said, quoted by the news portal “Tribuna”, that the Reform Party is trying to increase its popularity with this move, as a government crisis is looming. “When popularity starts to decline, before the next election, a change of government is made, in which someone else becomes the culprit, so that popularity can increase in the pre-election period. It is so obvious and has been repeated so many times that it is no longer surprising,“ Helme said. According to him, the behavior of the Reform Party with its coalition partners can be compared to the poisonous black widow spider, whose females eat their partners after mating.
In a comment for the news portal “Delphi” Gerry Kono, an entrepreneur and co-chairman of the opposition conservative party Rodina, came out. "The reformists have abandoned some of their partners, put a short collar on the others, and the people of Estonia will suffer," he said. At the same time, the politician predicted that the Social Democrats would start "pretending to be an opposition party, hoping that someone would forget that they were complicit in all the outrages" while they were part of the ruling coalition. "It will be interesting to see how they will now criticize every step of the government, after they were co-authors of most of the current laws," he concluded.