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First serious rift appears in coalition

Nov 28, 2007
By TBT staff

First serious rift appears in coalition
Some Reform Party members want Parts removed from his post.
TALLINN - The first serious rift has appeared in the ruling center-right coalition, apparently the result of a difference of opinion over who is to blame for Estonia's fragile economy and how to finance a major highway.
Speaking in a recent interview to AFP, Economy Minister Juhan Parts lashed out at Prime Minister Andrus Ansip and the previous government for blowing the chance to keep inflation low, an obligatory requirement for joining the eurozone.

The former government coalition under the Reformists' leadership was, in Parts' words, "too worried about its reputation." "Instead of making accession to the eurozone its priority, [it] took misplaced steps like the too rapid increase in state sector salaries," he said.
As Parts concluded, "Now, when inflation has racked up, accession to the eurozone is postponed for years."
The criticism comes while Parts is calling for utilizing the state's reserve funds to build the Tallinn-Tartu highway, a major infrastructure project that has been stuck in the mud for years, and to subsidize a number of bus and train routes in 2008.
Ansip, himself a former economy minister, has refused to agree to either proposal.
The fault line between Parts and Ansip has a long history.

Parts, a member of the right-wing Pro Patria-Res Publica Union, was forced to step down from the prime minister's post in 2005 after a nasty confrontation with the Reform Party that reached the boiling point after Parts fired Kristiina Ojuland, then foreign minister, for what he perceived to be her incorrect statements to the press.
The move sowed an irreparable distrust between the Reform Party and the then Res Public Union. Ansip went on to create the next government coalition with the Center Party and the People's Union. But after the Reformists won the parliamentary election in March, Ansip and the Reformists decided to dump the Centrists and the People's Union in favor the Pro Patria-Res Publica Union (IRL).

Now, however, several Reform Party members have suggested that it would be best for the coalition if Parts were to step down from his ministerial position, the Eesti Paevaleht reported on Nov. 22.
According to reports, the rift between the Reformists and IRL is so serious that IRL leader Mart Laar sent a letter to Ansip dismissing the controversy as normal bickering between coalition parties and warns of excessive emotions in a possible response.
Ansip has publicly downplayed the rift, saying that there were no Reformists clamoring for Parts' departure. "Perhaps Paevaleht knows these politicians, but I don't," he told a press conference.

He said disagreements were a matter of course for any government and complete agreement was impossible.
The Reformists claim that allocating some 40 million kroons (2.56 million euros) for public transport may result in major cuts to rural bus lines. What's more, using the country's strategic reserves for the Tallinn-Tartu highway would lead to higher inflation and overheat the construction sector.
On Nov. 22 the government issued a statement saying that the Tallinn-Tartu highway would under no circumstances be financed from either the budget surplus or the treasury reserve. Ansip said dipping into the reserve would amount to borrowing from future generations of Estonians, something the country could not afford to do.

The prime minister said the discussion of financing the highway would continue until coalition partners reached an agreement. He said the Reformists believed that the four-lane highway should be build on fuel excise revenues.
In the Reform Party's opinion, a hike in the fuel excise duty will bring in an extra 1 billion kroons (64 million euros) to state coffers 's money for the Tallinn-Tartu highway.
Jurgen Ligi, a Reformist MP and chair of Parliament's financial committee, said borrowing for the road "would exacerbate inflation and heat up the road construction sector, which is overheated as it is."
"By placing more money in road construction, we won't be able to build more kilometers of roads but just double the cost of 1 kilometer."

Parts has countered by claiming that road construction should be viewed as part of the entire construction sector, where turnover reached 35 billion kroons last year, and where an extra billion would not have an affect.
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