Cracks open in ruling coalition

The Reform Party attacked its coalition partners following a decision by the Pro Patria and Res Publica Union to shoot down a series of tax amendments.

Reform Party General Secretary Kristen Michal told the Baltic News Service that the situation was "ugly," but stopped short of saying that the spat could plunge the government into a crisis. 

"I don't know if this is an attempt to topple the government, but it's very unpleasant… I cannot say if this is a government crisis," Michal said.

As the economic situation in the Baltics becomes steadily worse following years of rapid growth, the Estonian government is faced with negative economic growth rates and the necessity to increase income, cut costs or accept a major budget deficit.  

Michal said the Pro Patria and Res Publica Union wanted to approach the problem by raising the uniform value added tax rate by two percentage points to 20 percent. The Social Democrats, however, say that the move would still result in a negative budget.

The Social Democrats claim the only way to balance the budget is by raising the income tax. The party also criticized the union for increasing expenditures in the Defense and Education Ministries while shooting down a proposal to raise the excise duty on natural gas. 

Though the argument over patching up the budget has become heated, it is doubtful that the spat will escalate enough to result in a full break in the ruling coalition.

Ain Seppik, vice chair of the oppositionCenter Party parliament group, told the Baltic News Service that the coalition will still be able to find a common language. 

"The coalition's not in good health, it's coughing and hacking, but this is still not the disease that will break it," the lawmaker said.

"Especially evident is rivalry between the Pro Patria and Res Publica Union and the Reform Party, which spells nothing good," he said.