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Government threatens to split

  • 2009-05-20
  • By TBT Staff

TALLINN - The ongoing internal bickering between ruling coalition parties is deepening, with the main issues of contention now threatening to break up the government.
Postimees Online reported that the Reform Party and Pro Patria and Res Publica Union are considering pushing the Social Democrats out of the coalition as arguments between the three parties remain unresolved. 

Local press has reported that the two parties began negotiations with the People's Union on May 15 over the possibility of forming a new ruling coalition without the Social Democrats.  
The conflict is centered around disputes over a controversial Labor Contract Act and benefits payments for the unemployed 's the number of which has recently reached an eight year high (see story Page 12). Coalition leaders Andrus Ansip, Mart Laar and Juri Pihl failed to come to an agreement on the issues at their most recent meeting. 

The Social Democrats hope to leave the tax rate and benefits the same, putting the burden of paying some redundancy benefits on employers. The party also wants to make small enterprises eligible to apply for compensation from the unemployment insurance fund.
The Social Democrats are opposed to Reform Party and PRU plans to cut unemployment compensations while maintaining provisions in the Labor Contract Act that would facilitate making employees redundant. 

The Social Democrats have put forward a counter proposal that would raise the unemployment insurance tax rate to 4 percent from the previously agreed 3 percent 's a move that would provide the Unemployment Insurance Fund with more resources for paying compensations. The other two parties, however, starkly oppose the tax surge.

The conflict was first thrust into the spotlight when Prime Minister Andrus Ansip, a member of the Reform Party, publicly criticized Finance Minister Ivari Padar, a Social Democrat, over his taxation policies and proposals for cutting down on the country's growing budget deficit.  
The prime minister published an open letter criticizing Padar earlier this month.

"I'm dissatisfied with the speed of working out the means of stabilizing the national monetary system and the content of the proposals we have received," the prime minister said.  
In a provocative move Ansip indicated he would be prepared to take over the Finance Ministry himself. Conversely the Center Party, in a somewhat symbolic gesture, started to collect signatures for a vote of no-confidence in the prime minister. 

"The coalition has serious disagreements, which is why decision making is so bogged down. Prime Minister Ansip delayed making decisions and did not want to cooperate with the opposition," said Ain Seppik, vice-chairman of the Center Party.  
Commentators, meanwhile, have urged the government to put aside its differences and work together to help overcome the crisis. In a high-profile editorial, the Estonian-language daily Aripaev said the collapse of the ruling coalition would lead to a political crisis and ultimately an even worse situation in the country. 

In an unusual step, the severity of the party bickering has even led President Toomas Hendrick Ilves to weigh in on the dispute, calling on the coalition to work together until the crisis comes to an end.   
"The government needs to stick together, at least until the crisis is over," Ilves said in an article in Eesti Paevaleht on May 9.