Model Country Estonia

George Henry Durrie: East Rock, New Haven // Public Domain

Estonia has witnessed several changes of government in the last few years. On July 18, there has been another one. However, Estonia’s success story as the most economically and technologically developed country in transition has not stopped yet.

The previous Prime Minister, Kaja Kallas, has now retaken her position as the new Prime Minister, thus ensuring that his country manages well under transition. Kallas is leader of the Reform Party – one of the few liberal parties that has managed to combine a crystal-clear liberal profile with the status of a people’s party.

How did the change of government come about? In June, a coalition with the Center Party, which had been in place since January 2021, broke up. This coalition was probably never a true “love match.” In its early years, the Center Party was seen as a mildly populist party that found voters especially among the Russian minority in the country, and – although like the Reform Party at the European level it was a member of the liberal ALDE – it set itself apart above all from the Reform Party’s market-liberal course.

From 2016, however, it gave itself a somewhat more modern and socially liberal profile under its new chairman, Jüri Ratas. At that time, Estonia was governed by a Reform Party-led cabinet under Prime Minister Taavi Rõivas. The coalition consisted of the same parties – – Reform Party, Conservatives (Fatherland Union) and Social Democrats – that have now come together again under Kaja Kallas.

In November 2016, Ratas and the Center Party succeeded in wooing away the two coalition partners with generous promises. Rõivas had to resign – a hard blow to the country’s “natural governing party.” And Ratas was elected prime minister with the help of their former partners. However, the new coalition seemed less coherent in terms of content than the previous one.

In addition, there were several corruption scandals in the ranks of the Center Party. Quite a few members of Parliament – particularly from the Conservatives, who saw the Reform Party as the ideal partner especially in matters of economic policy – withdrew their support for the government, which ultimately lost its majority in October 2018. Ratas had no choice but to call new elections in March 2019.

Strongest Force in the Country

Ratas’ party lost massively and the Reform Party easily became the strongest force in the country with 28.9%. However, the right-wing populists of the EKRE party (the Estonian partner of the AfD) also made huge gains, with 17.8%. In order to prevent EKRE’s participation in the government, the logical most move would be to appoint the election winner as head of government.

Thus the newly elected leader of the Reform Party, Kaja Kallas. In the midst of the talks, news emerged that Ratas would cling to his post at any cost, against the will of the voters, even at the cost of making a pact with the “devil.” In April, a government of the Center Party, EKRE and the Conservatives was sworn in. The EKRE ministers, however, proved to be a great burden, as one by one became caught up in scandals, of which the private use of official cars was still a harmless deed.

In the end, Ratas had no choice but to end the inglorious experiment and resign in January 2021. President Kersti Kaljulaid did what had to be done and entrusted Kaja Kallas with forming the new government. By this time, the Covid emergency was already in place, and so the decision was made to form a seemingly stable two-party coalition between the Reform and Center parties, led by Kallas (with Ratas as junior partner).

Unreliable Coalition Partner

Initially this worked to some extent, but clear disagreements soon arose with the invasion of Ukraine by Putin’s Russia. Kallas pursued a hard pro-Ukrainian course and was also a harsh critic of procrastinators on the international stage (see her much-beloved freedom speech for the Friedrich Naumann Foundation for Freedom). It was rather untimely when the opposition found out that the coalition partner, the Center Party, still had a valid cooperation agreement with Putin’s United Russia party, which was declared invalid much too late.

This alone caused great distrust among Kallas and the Reform Party. In the end, the decisive factor was that Ratas’ people still seemed to be flirting a bit with EKRE. First, in a vote against the coalition agreements and with the help of EKRE, they pushed through the introduction of a family and child allowance. This meant a new burden on the budget of 300 million euros per year, which massively contradicted the Reform Party’s convictions on sound fiscal policy.

Second, on June 1, 2022, it agreed to a non-consensual education law with EKRE. Kallas took action and two days later the ministers of the Center Party were dismissed. Enough was enough.

Continuity in Progress or Progress in Continuity?

And so things have come to full close. The Reform Party, the Conservatives and the Social Democrats – the “tradition team” – formulated their coalition agreement on July 8, and on June 14, Kallas resigned, only to be re-elected by the new coalition in Parliament four days later. It will certainly be easier now for the government to push its position on the Ukraine war, and to promote it in countries that seem less committed (such as Germany).

In any case, support for Ukraine is at the core of the coalition agreement. In addition, there are other projects, such as raising the tax allowance (to help lower earners in times of inflation), sustainable transformation in the energy sector through innovative technological approaches, a Covid policy that takes civil rights into account, a clear commitment to the EU and NATO, and further expansion of Internet connections.

Estonia is continuing to develop all aspects needing improvement. This alone makes it a model liberal country in Europe.

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Detmar Doering
Friedrich Naumann Foundation for Freedom