A stable but fragile government for Estonia

The Reform Party has now been in the Estonian government for a continuous 16 years, having been the leading party for the last 10 years, and regards its mandate as popular satisfaction with the status quo. But each of the coalition parties has lost both votes and seats, and their downward trend continues in recent public opinion polls. All other coalition and opposition parties had expressed a demand for change, but their ideas were diverse. This makes both current and any other compromise vulnerable.

The parliamentary elections in March of this year saw the four major parties keep a large majority of the seats, and the leading neoliberal-conservative Reform Party once again prevail, winning 30 of the parliament’s 101 seats, down by 3 since the last election. At the same time, the incumbent coalition lost its majority, as the junior partner, the Social Democratic Party, also suffered losses and finished with only 15 seats.

The coalition was then bolstered with a former partner, the national-conservative Pro Patria and Res Publica Union, which added 14 MPs to complete a sizable majority of 59. The opposition consists of the left-leaning Centre Party supported by the two anti-establishment right-wing newcomers, the Free Party and the Conservative People Party.

The new government started with difficulties; the coalition negotiations themselves were long and weary by Estonian standards, and the budget negotiations took a similar course. One of the more visible problems is socio-economic. Estonia is well known for stable neoliberal policies such as low corporate and income tax levels, and for encouraging entrepreneurship. This in broad terms will continue, but makes maintaining a balanced budget challenging because most of the top 5 priorities of the new government – security, economic growth, children, low-wage earners and government reform – require additional finance. The budget is further stressed by the declining and ageing of the population, which strains both revenue and the per capita cost of services.

The sources of additional funds are seen in increases in indirect taxes and cuts to public spending, as the Reform Party has opposed raising income or wealth taxes. Whether these long-practiced solutions will be a productive strategy to increase well-being will clearly be further debated both in and outside the government.

Other divisions could necessitate even more fundamental compromises. While security is a common concern for all the parties due to events in Ukraine, the support base of the Centre Party includes a large community of ethnic Russians, and this has been one heavily exploited line in party politics. A more discrete yet very present division concerns ‘Western values’. The debates on legalising same-sex partnerships and on EU asylum seeker resettlement initiatives, which continue from the previous parliament, are a reminder of where Estonian public opinion diverges from the western European mainstream. Here, the so-called pro-Western camp is itself divided along the liberal and conservative axis.

These elections also marked a further generational shift resulting in an even more managerial brand of top politicians. This creates an increasing void in real political debate that’s filled instead by public relations management. While rising to the position of Prime Minister, Taavi Rõivas originally declared the lack of need for ‘great narratives’, but later decided upon a loose ‘New Nordic’ slogan. Many Estonians have expressed a desire for more openness with clearer debates on positions and values.

The new Estonian government, christened the “hesitation coalition” by media and the “tenacity coalition” by itself, has endured its first serious challenges. There is now general agreement both on the action programme and the budget. But how long this renewed consensus can last remains to be seen.