The frustrating start of the new liberal coalition in Estonia

When the results of the national elections 2023 were finally announced by the midnight hours of March 5, there was relief and even jubilation among the liberal-minded voters in Estonia: the Reform Party had won more than 1/3 of the seats in the Riigikogu and the other liberal and Western-orientated forces, the Social Democratic Party (SDE) and the newcomer Estonia 200, had also fared quite well. The expectations related to the new liberal government under Prime Minister Kaja Kallas had been raised very high. However, what happened next has been a string of disappointments, broken promises, and controversial incidents. 

To put it simply, the liberal voters voted for univocal support for Ukraine (without any moral concessions and ambiguities), the continuation of the neoliberal economic model and tax regime and finally, marriage equality. They got only the latter (same-sex marriage – legalized in May 2023) but not the other two policies.

In August 2023, the Estonian media exposed that the company owned by PM Kallas’ husband, Arvo Hallik, had retained its business contacts with Russian firms (regardless of the war) and had earned a nice profit from that trade. Even if, in juridical terms, there were no violations against the sanctions on Russia, the incident looked extremely dubious and controversial on moral grounds: the PM, who has been one of the most vehement advocates of the anti-Russian sanctions, allows her own family members to do business with the Russians. The Estonian media, which so far had been rather supportive and sympathetic to Kallas, changed its tonality overnight and outspokenly demanded her resignation (which did not happen, as we know). 

Although the last intra-party elections in the Reform Party (in November 2023) have demonstrated that Kallas’s position as a party leader is still relatively secure, one can see mounting tensions within the PM’s party. Many commentators are already quite sure that the party leadership will probably force Kallas to accept a prestigious job in the international arena (either in the European Commission or NATO) by the spring of 2024, before the European elections. The reason for that is simple: Kallas, whose domestic popularity is now almost in freefall, has become a burden, not an asset for the pragmatic Reform Party. 

Interestingly, public support for the Reform Party did not plunge right after the scandal but has come down only very recently. There is another reason for that: taxes and the economy. Before the elections, Kallas boldly stated: “Read it from my lips – the taxes are not going to rise.” However, now it has come out that the state budget is in a record-high deficit, and the economy is in recession. It has forced the government to raise personal income tax and VAT by 2% and introduce the vehicle tax (a novelty in the Estonian context). There is no need to mention that tax hikes like that have caused considerable public resentment.

What next? The immediate effect of those developments has been that, unexpectedly, the moderate conservative party, Pro Patria, has rapidly gained support and has become almost the most popular party in Estonia within a few months. Pro Patria, whose former chairman, Helir-Valdor Seeder, was often associated with the far-right EKRE, changed their leader in the spring, and the new chairman, Urmas Reinsalu (a former Foreign Minister), has managed to change public perception of the party considerably, freeing the party from problematic associations with the populists. It has allowed Pro Patria to expand its electoral base substantially, and while being an old party, they also look fairly competent in economic matters (at a time when many voters question the Reform Party’s competencies in those areas).  

Nonetheless, there are still 3.5 years to go to the next elections, which is a long time in democratic politics. Many things can happen meanwhile (including with the Pro Patria’s popular appeal). However, it is still clear that it is impossible to form any government without the Reform Party in the near future because it is still the largest party in Riigikogu. Moreover, the radical right EKRE has been efficiently forced into a cordon sanitaire, so nobody wants to cooperate with them against the Reform Party.

Indeed, EKRE’s growing isolation and the fact that their public support has not increased, regardless of the disastrous first moves of the incumbent liberal government, has been one of the brightest spots in the otherwise blackened sky of Estonian politics for the liberal voters. It gives hope that Estonia will not follow the examples of Slovakia, the Netherlands and Argentina, voting the populists into government after the incumbent mainstream parties have failed. However, as said before, 3.5 years is too long in democratic politics to make any predictions.            

 

Tonis Saarts,

Associate Professor of Comparative Politics,

Tallinn University, The School of Governance, Law and Society

 

PS. The commentary was written and sent for The Baltic Times Magazine in mid-November 2023