New Cabinet voted into power

  • 2005-04-13
  • By Aleksei Gunter
TALLINN - Estonia was granted a new government on April 12 as Parliament approved the merging of the Reform Party, the Center Party and the People's Union.

The three parties concluded talks last week and signed the necessary coalition agreement prior to the vote in Parliament. MPs approved Andrus Ansip as prime minister by a vote of 53 against 40, the exact number of seats the new coalition would have in the 101-strong legislature.

President Arnold Ruutel, who met with the fresh Cabinet team on April 12, proclaimed the new government the same day.

While promising to keep the country on its current path in foreign policy and security affairs, the new government said it planned to introduce a number of social benefits, including higher pensions, increased child allowance, a higher tax-free minimum on income and exemptions for families with two or more children.

In a speech delivered in Parliament before the vote, Prime Minister Andrus Ansip admitted the three-party talks had been tough, but he tried to quell criticism about the incompatibility of a right-wing party 's the Reform Party, which he leads 's and the two center-left parties.

"Yes, my party is clearly liberal, and the programs of the Center Party and the People's emphasize the state's deeper involvement in the life of society. But liberalism and socialism exclude one another only in a limited imagination," said Ansip.

The prime minister emphasized the importance of social and family issues for new coalition members, referring to the fact that the respected chapter is the very first in the coalition agreement.

While perks catering to the people's interest look impressive, they will also require higher budget expenditures. However, the new coalition agreement says that the government intends to continue with a balanced budget policy on both the national and municipal levels in strict accordance with the Maastricht criteria and the Growth & Stability Pact.

The coalition agreement also includes an option of issuing state bonds, which could be interesting for pension funds and help private investors finance the development of the country.

The Reform Party is to keep the five ministerial positions it held in the previous government of Juhan Parts. The party, however, decided to replace freshly appointed Foreign Affairs Minister Rein Lang with outgoing Culture Minister Urmas Paet, thus giving the latter's position to the Center Party. Lang is a candidate for the justice minister's position.

The People's Union team in the government is to receive a fresh face. The ex-director of the Tax Board Aivar Soerd has risen to the important position of finance minister.

The Center Party received some key positions, including the Ministry of Economic Affairs and Communications and the Ministry of the Interior. For the Centrists, the new coalition marks their return to power after a dryspell that began in 2003. In January 2002, the Center Party joined the Reformists in the ruling coalition after the Mart Laar-led government collapsed over a trust dispute triggered by the change of power in the capital city.

"All our portfolios demand hard work, and the areas of our responsibilities are very problematic," said Edgar Savisaar, chairman of the Center Party.

Savisaar added that the newly born government had already been attacked and certainly would see more pressure from both the left and right sides of the opposition. He noted that only left-wing forces had criticized the former coalition, while the new government would be much more centered on the political scale.

Savisaar admitted that, in order to attain power, the Center Party had to sacrifice some of the positions slated in its program, including a decrease of VAT on food products and transport services from the current 18 percent to 5 percent. Neither will the progressive income tax be introduced this time.

The former Tallinn mayor also downplayed the importance of the progressive income tax by saying that the Centrists preferred the pension increase instead.

Ansip, 48, has so far managed to repeat the stunning career of his predecessor and now European Commissioner Siim Kallas. Starting as Tartu mayor and deputy chairman of the Reform Party, he rose to the job of the Minister of Economic Affairs and Communications last year after the previous minister failed to negotiate a new ferry deal for Estonia's western islands. Several months later, he replaced Kallas as the party chairman, and now he is head of government.

The Reformists have been nicknamed the Teflon Party since not one of the major scandals over the last several years, be it on the national or municipal level, has managed to stick to the party's pristine political armor.