Lithuanisation of Estonian politics

A few months ago, I was invited to speak about Estonian politics to members of the Lithuanian Professionals in Tallinn Club. In my presentation, I compared the party systems and party politics of Estonia and Lithuania. On the surface, there are many similarities, yet the differences are striking. Most notably, the Estonian party system has been remarkably stable over the past two decades, whereas the Lithuanian system is notorious for its volatility and the constant rise of new populist parties. At the same time, Estonia has long suffered from an ideological imbalance: the centre-right – and in particular the neoliberal Reform Party – has dominated the scene and has been in office for most of the period. In Lithuania, by contrast, there has been a relatively healthy alternation in power between centre-left (social democratic) and centre-right (conservative) governments.

Recent trends in Estonian party politics, however, suggest that the system may be entering a less stable and less predictable phase, with a greater likelihood of reshuffles between governments of very different ideological colours. At the heart of this development lies the irreversible decline of the Reform Party, which is visibly losing its former hegemonic position. Opinion polls are telling: immediately before the 2023 elections, the Reform Party enjoyed support of around 30%, but it now languishes at barely 12%. Personal approval ratings for the current Prime Minister, Kristen Michal of the Reform Party, are lower than for any opposition leader. What has gone wrong for the party that once seemed unassailable?

The answer lies in a mix of short- and long-term factors. Among the short-term triggers, the scandal surrounding former party leader Kaja Kallas stands out. While Kallas emerged as one of Europe’s loudest critics of Vladimir Putin and a staunch advocate of economic sanctions, it came out that her husband had maintained business links with Russia. Unsurprisingly, this badly damaged domestic trust in the Reform Party as the country’s foremost political force capable of defending Estonia against Russian aggression.

In addition, we must not forget the policies of recent Reform-led coalitions. A party that had preached for years the virtues of neoliberalism, low taxes and a minimal state has ended up introducing the steepest tax increases in Estonia’s recent history. To be fair, this has largely been driven by soaring defence spending. Yet the crucial point is that the Reform Party never raised the tax policy issues during the 2023 election campaign and therefore did not seek a popular mandate for such radical changes. The tax hikes have been implemented amid galloping inflation and economic stagnation, turning the current cabinet into one of the least popular governments since independence.

When we look at longer-term dynamics, the picture becomes more intricate. Over the last twenty years, the Reform Party has proved itself the most effective actor in addressing Estonian voters’ major fears and aspirations. First, since the Bronze Night of 2007, it has successfully convinced many citizens that it is the party best equipped to defend Estonia against Russia’s neo-imperial ambitions. Second, it has demonstrated that its neoliberal recipes have genuinely worked in inducing economic growth, as Estonia has been the most successful among the Baltic economies for several decades. Third, the neoliberal economy has come hand in hand with a rudimentary welfare state, in which the Reform Party has invested quite a lot since the mid-2000s. For many Estonians, then, Reform was the party that kept us safe from Russia, made us more prosperous, provided at least some social security and managed the state more competently than its rivals. It is hardly surprising that the party has won every election since 2007 and has been in government for roughly three-quarters of the last 20 years.

Today, however, the three pillars that underpinned this dominance are crumbling. The party’s image as the most reliable defender against Putin was badly tarnished by the Kallas affair. With the tax hikes, the Reform Party has betrayed its former neoliberal principles, undermined its ideological foundations and credibility. With inflation and economic stagnation, the living standards of its core supporters, the middle class, have deteriorated, and there is anticipation that we will soon see serious cuts in welfare expenditures, as few alternatives remain.

Until recently, the Reform Party served as the anchor of Estonia’s party system – almost permanently in office and imposing its ideological vision on society as a whole. We all know what happens to a ship when the anchor cable is cut: it begins to drift until someone else seizes the helm. Who might that be? At the moment, the most likely candidate appears to be the national-conservative Fatherland Party, currently leading the polls. Yet I am sceptical that it can sustain a dominant position for long or truly step into Reform’s empty shoes.

Far more probable is a period of oscillation between left and right, and between liberal and conservative coalitions, much as we have seen in Lithuania. Estonian party politics is becoming more volatile and less predictable – again, much like in Lithuania. In this sense, we may indeed be witnessing the gradual Lithuanisation of Estonian politics.