TALLINN - Embattled Prime Minister Andrus Ansip, is planning to replace departed coalition partner the Social Democratic party (SDE) with the Estonian People's Union party. This change should enable him to retain both his position and his budgetary strategy.
After weeks of infighting the ruling coalition finally collapsed last week, after two years at the helm. Ansip ditched the junior coalition partner SDE after disagreements over the budget and failing to agree on the Employment Act, which is due to enter law on July 1.
In the short term Ansip will run a minority government between his Reform Party and long term partners Isamaa ja Res Publica Liit. However Ansip hopes to install a new coalition partner in the next few days. This would then again give the government a working majority.
Ansip's ruling Reform Party and coalition partner Pro Patria and Res Publica Union will ask the opposition Rahvaliit Party to join the government. Ansip remains cautious though and saying, "it wasn't clear exactly when a new coalition would be formed."
President Toomas Ilves, last week approved Ansip's request to dismiss the SDE's Finance Minister Ivari Padar, Interior Minister Juri Pihl and the Minister for Population and Ethnic Affairs Urve Palo. This ended SDE's involvement in the government.
Ilves was quoted in Bloomberg as saying "I'm sad the government crisis had to arise because it removes focus from the main issue, sows instability and reduces our credibility abroad," Ilves said. A possible new government coalition will need to present a plan on further austerity measures, including 2010 and 2011," he added.
One point of principle the ruling parties in the cabinet have set, is they consider euro entry in 2011 crucial. They believe this will attract new investment and spark a recovery from the deepest recession since Estonian independence.
A subject of much dispute in the previous coalition may also now be resolved. Reform Res publica Union want to freeze state jobless support, a proposal rejected by the SDE unless it was balanced by a freeze on planned cuts in severance pay. Ansip has said, "Curbing benefits is necessary to shore up the budget deficit, as the contracting economy depletes the state's coffers."
The newly proposed coalition partner People's Union would need to find common ground over severance pay. A pact with People's Union would include a specific agreement on labor laws, including lower severance pay to make it easier for employers to shed jobs.
People's Union, which has mainly rural supporters and six seats in parliament compared with ten for the Social Democrats, says it favors greater social equality. The government and People's Union would together hold 56 seats in the 101 member parliament.
Maart Laar the Chairman of the IRL party and an ex-prime minister himself revealed some of the behind the scenes discussions in an email to his colleagues. He said that "People's Union had not yet agreed to the level of budget cuts that were needed. He went on to say that he feared having the same problem as occurred in the previous coalition, when the new partner was unable to make unpopular decisions."
Departing SDE Finance Minister Ivari Padar was not bitter. Speaking online to the public through Aripaev Padar said "the coalition broke because fundamentally they did not think the same. He explained that "SDE represented the weakest in society and this was at odds to the other two parties." He also confirmed the budget was the main reason for the split.
In another stinging attack, Edgar Savisaar the mayor of Tallinn, speaking to Delfi pleaded with the government "not to make a new government before the upcoming euro elections," adding "the new proposed coalition will make the same mistakes. They don't have solutions for the economic crisis and they can't solve the unemployment problem."
Savisaar stated "that Ansip was trying to persuade people that a fast decision was the only decent option for Estonia." He argued that "it would be more ethical to change the government only after the people had had a chance to speak. And that this would happen in the forthcoming European elections on June 7.
Meanwhile, it remains to be seen if Prime Minister Ansip and his new government will be able to reach a consensus on their proposed budget target.