As of yesterday, Estonia has a minority government. The Social Democrats are out, and the Reform-IRL axis is scrambling to work out a deal with Rahvaliit to get the necessary majority in the Riigikogu. Otherwise they will not be able to ensure that any of their measures get approved by the legislature; with SDE thoroughly ticked off and the Centrists naturally uncooperative, there is a very good chance that Ansip and Laar will not be able to get things done on their own.
By themselves, Reform+IRL have 50 seats, which is just one short of a plain majority in the 101-seat parliament. They could try to court the one independent candidate, Jaan Kundla, who left the Centrist fraction but didn't resign. I don't know much about him; his Wikipedia entry mentions a relatively modest assortment of scandals and no specific political leanings. He could probably be persuaded by the two big political parties, and I'm sure they're considering that option. The guy is also over 70 years old, which raises an interesting point: if he dies, who gets to replace him? Somebody from the party on whose list he got elected? Somebody from his constituency?
The most likely new coalition partner is Rahvaliit, the farmers' party. Their former leader, Villu Reiljan, was just convicted in a corruption case from his stint as minister in the previous government - he took bribes to arrange unusually profitable land-exchange deals. (If you own a piece of land whose use is restricted by nature reserves or some such thing, you could give it to the state, and get a piece of unrestricted state land in return. A reasonable system in theory, but people close to Reiljan were apparently exchanging swamps in Lahemaa for zoned plots in downtown Tallinn.) Last I heard, Reiljan hasn't resigned because he's still looking for an appeal and won't be forced to leave the parliament until that's done. But, assuming that he's on his way out, this would be a good opportunity for Rahvaliit to clean house and try to claw back some credibility.
A complete change of government is unlikely. As much as everyone is sick of Ansip's cabinet, pigs will fly before there is a stable alliance of Centrists, Social Democrats, Greens, farmers and that one independent.
Meanwhile the SDE ministers have been having fun on their way out the door. A few days ago, KAPO (the internal special service) arrested a top police official who is a close personal friend of Ansip. KAPO is part of the Interior Ministry, controlled by SDE's Jüri Pihl. As the papers pointed out, it's not likely to be a witch hunt and KAPO surely has enough good evidence, but one does wonder if Pihl wasn't keeping his men on a short leash to maintain good relations with his coalition partners. Ivari Padar, the SDE leader and also a top minister, had publically stated that he would be resigning after the Europarliament elections one way or the other. The Prime Minister was not amused by the theatrics, it seems.
The rump cabinet is still trying to keep to the Euro accession criteria, and it's getting a bit preposterous. I remember Padar going on TV and saying that he was absolutely sure that the initial budget cuts would be more than enough to stick to the Maastricht parameters. Now we've had another round of cuts, and even more may be necessary. The unemployment benefits muddle is still unresolved, but the premium has gone up. There's also new excise rates on fuel (about 2 eurocents per liter) and alcohol/tobacco. Childbirth benefits are likely to be cut. Student loan payments in government agencies have been stopped.
As much as I'd like Estonia to join the Eurozone, I'm unconvinced. The problems of a poor economy will not be solved by raising taxes, at least not in a flat-tax country like ours; the problem isn't that the government isn't getting enough money, it's that the people aren't earning any. We need public works, government subsidies for innovative and practical exporting businesses, investment in education and infrastructure. If we won't hit the Maastricht criteria before the crisis is over - and if the debt burden of the big Eurozone economies makes the future of the Euro seem unsteady as it is - then sod it. Let's take out loans and spend them on long-term stuff, like power stations and shale-to-fuel reprocessing factories. And if we're doomed, let's at least go out in a blaze of glory.
The government's actions are predicated on the assumption that once we join the Euro, it will all be rainbows and unicorns. I don't know that they're necessarily wrong, but I do know that they haven't done a good enough job of convincing me.
As for the coalition... anyone who's been paying attention will know that I have no love for Savisaar, quite the opposite. But in these desperate times, what I would really love to see is a national unity government.
A tale of two countries
5 weeks ago