The economy minister made his unexpected announcement on Sept. 28, saying that public opinion was more focused on him as a person than on his work.
"In this situation I consider resignation to be the only solution and hope the Moderates will approve my decision," Parnoja told reporters.
The party approved his resignation the next day, stating that there were four or five possible candidates for Parnoja's post.
According to the coalition agreement between Pro Patria Union, the Moderates and the Reform Party, the economy portfolio belongs to the Moderates.
"I'm convinced the government's decisions to accept foreign investors in Narva power stations and the Estonian railway were right, inevitable and necessary. Unfortunately neither me nor my colleagues managed to explain the background and essence of those processes in the most understandable way," said Parnoja in his resignation statement.
Parnoja, 55, will continue his political career as an MP. He's graduated from Tartu University and holds a master's degree in chemistry. Parnoja has been an MP since 1992 and became economy minister in 1999.
He was praised by the local press for finishing the privatization processes of the Narva power plants and Estonian railway. But he was blamed for mistakes in the Fuel Quality Act, which led to the sale of low-quality fuel, and also for allegations of shady dealing in the railway and power plant privatizations.
The business daily Aripaev also accused the Economy Ministry of failing to attract major projects, including a new BMW factory, to Estonia. The paper also listed a recent scandal concerning selling former dormitories to a real estate company without checking its background as a black mark on Parnoja's record. The company kicked several people out of the dorms and left them living in tents for several days.
Prime Minister Mart Laar promised Parnoja's resignation would not lead to any reshuffle in the present government. Laar said there was no pressure from the rest of the coalition in this respect, and that the motives of the resignation were understandable and convincing.
Marju Lauristin, chairman of the Moderates' parliamentary faction, said Parnoja became the whipping boy while defending the privatization policy of the entire government, not his own.
"Although Parnoja's way of communication with the public has been criticized also within the coalition and more broadly within the party, we value him as a capable analyst and an upright, unselfish politician," Lauristin said.