Estonia Political Briefing: a New Year with a New Government E-MAP Foundation MTÜ

Home , Estonian Centre Party, Estonian Reform Party, Kaja Kallas, Kersti Kaljulaid

ISSN: 2560-1601

Vol. 36, No. 1 (EE)

January 2021

Estonia political briefing: A new year with a new government E-MAP Foundation MTÜ

1052 Budapest Petőfi Sándor utca 11.

+36 1 5858 690 Kiadó: Kína-KKE Intézet Nonprofit Kft. [email protected] Szerkesztésért felelős személy: Chen Xin

Kiadásért felelős személy: Huang Ping china-cee.eu 2017/01

A new year with a new government

When on 13 January 2021, very early in the morning, the country’s Prime Minister Jüri Ratas (Centre) was about to announce his resignation, he visibly seemed much happier than he used to look like during the previous one and a half years (in fact, a bit more than that). Since 29 April 2019, when Ratas was appointed by the Riigikogu to run his second cabinet, the Prime Minister’s political life was resembling a permanent nightmare, due to a range of different scandals, which, one after another, were preventing the Centre Party-led governmental coalition from establishing some sort of normality, daily routine wise. This is never to say that a liberal democracy has to be less turbulent in terms of generating fierce debates on complicated issues. No, not at all. However, the outgoing governmental coalition’s boisterousness had, objectively, nothing to do with classic political deliberations within a democracy – as extensively discussed in a number of 2020-bound briefs on Estonian politics, almost each of those setbacks was clearly associated with a mini- or a maxi-crisis of the entire Government. Therefore, the eventual resignation was, speculatively, some kind of a relief for Jüri Ratas – in the wake of a big scandal that was surrounding a property development project in Tallinn, the Prime Minister decided that he simply had enough1.

Some more details on the actual crisis will definitely follow the most recent political shake-up, and, during February-March 2021, the society will learn plenty on what went dramatically wrong. In the meantime, what is known thus far, the Office of the Prosecutor General “declared five persons and the Centre Party suspects in the criminal investigation related to Porto Franco”, and those “include […] [the then] [S]ecretary [G]eneral of the Centre Party, [an] adviser to the Minister of Finance, and [a] businessman”2. On a concrete note, the businessman “is suspected of bribe-giving”, the adviser – “of influence peddling”, and the Centre Party’s top-official – “of a second-degree crime”3. Back in July 2020, it was reported that Porto Franco, “the largest development project in Estonia ever, with a total area of 150,000 m2”, consisting “of three underground floors with 1,170 parking spaces and commercial rental spaces, and five above-ground floors for a

1 ‘Jüri Ratas resigns as prime minister following loan scandal’ in ERR, 13 January 2021. Available from [https://news.err.ee/1608071542/juri-ratas-resigns-as-prime-minister-following-loan-scandal]. 2 ‘Prime Minister Jüri Ratas resigns amid property project financing scandal’ in Postimees, 13 January 2021. Available from [https://news.postimees.ee/7154566/prime-minister-juri-ratas-resigns-amid-property-project- financing-scandal]. 3 ‘Prime Minister Jüri Ratas resigns amid property project financing scandal’.

1 shopping centre, office centre and hotel”, got the news that the Government decided to finance it “with a bridge loan from KredEx”4. In January 2021, Taavi Pern, State Prosecutor, reported that the prosecuted businessman “who has ties to […] Porto Franco […] and Secretary General of the Centre Party […] agreed that the businessman would donate a total of almost one million euros to the party leading up to local elections this fall in exchange for [the politician] making sure an exit road could be built on city land”5. In addition, as Pern noted, the ‘centrists’ as a party are “suspected of influence peddling”, and they received EUR 120,000 in donations from the businessman in 20206. In short, it was too much for the then ruling governmental coalition to bear, and shortly after the Prime Minister’s resignation, the coalition of the Centre Party, EKRE, and Pro Patria had dramatically collapsed. With almost immediate effect, the country realised that the new year (and, most probably, the whole period until the next parliamentary elections in 2023) will be spent with a new Government.

The ‘reformists’, who won the March 2019 elections but could not form a coalition then, got the second chance. President Kersti Kaljulaid decided to ask Kaja Kallas, the leader of the Reform Party, to have another go on forming a new cabinet, noting the following:

We do not have time to wait for formal deadlines to come and go. There is no time for stalling. The government crisis needs to be solved as quickly as possible. The people of Estonia need functional administration.7

Despite the objective fact that the performance of Kaja Kallas as a leader of the country’s parliamentary opposition deserves to be more effective, – after all, it could be evidently argued, the only serious political force that was opposing the discrepancies within the Ratas-led coalition was the country’s President herself, – she accepted the presidential call and … asked8 the Centre Party to partner the ‘reformists’ in a new Government. ‘What a surprise!’, – a naïve outsider may scream, having heard the news. ‘Not at all!’, – a seasoned analyst from Estonia

4 ‘The government decided to finance Porto Franco with a bridge loan from KredEx / Porto Franco will be financed by a bridge loan from KredEx, the government decided’ in Porto Franco, 30 July 2020. Available from [https://portofranco.ee/en/2020/07/30/the-government-decided-to-finance-porto-franco-with-a-bridge-loan-from- kredex-porto-franco-will-be-financed-by-a-bridge-loan-from-kredex-the-government-decided/]. 5 Janno Riispapp, ‘Teder promised close to a million in return for favor’ in Postimees, 13 January 2021. Available from [https://news.postimees.ee/7154724/teder-promised-close-to-a-million-in-return-for-favor]. 6 Riispapp. 7 Kersti Kaljulaid as cited in Henry-Laur Allik, ‘Kaja Kallas’ second shot at becoming prime minister’, Postimees, 14 January 2021. Available from [https://news.postimees.ee/7155468/kaja-kallas-second-shot-at-becoming- prime-minister]. 8 Loora-Elisabet Lomp, ‘Reform and Center to hammer out coalition agreement over week and a half’ in Postimees, 15 January 2021. Available from [https://news.postimees.ee/7156385/reform-and-center-to-hammer-out- coalition-agreement-over-week-and-a-half].

2 would reply to that. In 2002-2003, for example, Siim Kallas, the founding ‘father’ of the ‘reformists’ and the father of Kaja Kallas, had run a Government together with the Centre Party. Then, one of his capable successors, Andrus Ansip, also invited the ‘centrists’ into his first cabinet. Therefore, there is no surprises here – the new Government of Estonia will be based on the Reform-Centre coalition, which possess 59 seats in the current Riigikogu out of 101. Clearly, it is going to be a decisive majority, being composed by the two largest parliamentary parties in the country9. Of course, there is a certain lack of ‘political comfort’ for the Reform Party to be teaming up with the ‘centrists’ who objectively did not perform well enough in the previous Government (not to mention their perceived involvement in the latest crisis, which pushed Jüri Ratas ‘down the hill’). Even Andrus Ansip himself admitted that he “would have preferred a corruption-free coalition as a first option, which would comprise S[ocial] D[emocrats], [Pro Patria] and the Reform Party”, and that it seemed to him that “financial discipline has not received the slightest attention in the last four years”10. However, it is what it is, and with the EKRE (arguably, the main ‘newsmaker’ in the previous Government) going back to the opposition for quite some time, Kaja Kallas is about to become Estonia’s next Prime Minister. What does this all mean in analytical terms?

In the most recent poll, the Reform-Centre pair is the electorate’s most preferable choice, being supposed by 35 per cent of the respondents11. This particular bit of data underlines the fact that nothing is seen as abnormal in this situational ‘union’ of a party that in opposition during the last two Governments and a party that was running the ‘show’ at the same time. What is already known – Kaja Kallas declared that the upcoming coalitional agreement will be of a general nature, and no specific ‘clashes’ over crucial political issues are expected to be discussed during the rounds of negotiations with the ‘centrists’. Speaking on the theme, she stated that there is a plan to “form the coalition on equal basis, decisions will be made by consensus”12.

9 ‘Estonian Reform Party Faction’ and ‘Estonian Centre Party Faction’ in Riigikogu. Available from [https://www.riigikogu.ee/en/parliament-of-estonia/factions/estonian-centre-party-faction/] and [https://www.riigikogu.ee/en/parliament-of-estonia/factions/estonian-reform-party-faction/]. 10 Andrus Ansip as cited in ‘Andrus Ansip: I would have preferred Reform-SDE-Isamaa coalition’, ERR, 14 January 2021. Available from [https://news.err.ee/1608073429/andrus-ansip-i-would-have-preferred-reform-sde- isamaa-coalition]. 11 ‘Norstat survey: Center, Reform coalition most popular’ in ERR, 15 January 2021. Available from [https://news.err.ee/1608074044/norstat-survey-center-reform-coalition-most-popular]. 12 Kaja Kallas as cited in ‘Kallas: Coalition agreement will be general], ERR, 15 January 2021. Available from [https://news.err.ee/1608073864/kallas-coalition-agreement-will-be-general].

In a much broader sense, the situation needs to be analysed from an international perspective. As argued by Kristi Raik, “[d]uring the past year and eight months, Estonia experimented with a coalition including radical right-wing populists”, and this “experiment damaged Estonia’s international reputation and its relations with allies, put pressure on its democratic institutions, and increased polarisation within society”13. With Joseph Biden as U.S. President, there is a likelihood for the fragile international system to be going into an imaginary geo-strategic ‘tie-break’ to see how well the main international actors can perform in the process of restoring some kind of normality. The radicalisation of everything that could be radicalised – discourse, policies, procedures, and, eventually, key interrelations – dramatically led to a multiplicity of collapses in different spheres. Some promising relations were never established, some seemingly unbreakable ties were broken, some animosities turned into abhorrence. Therefore, Kaja Kallas and her new Government will be having a monumental task to construct a range of clear strategic narratives for Estonia to project those through on the international stage. More specifically, a set of orientational priorities on Estonia’s foreign policy will have to be worked out immediately. Especially, when it comes to the process of ‘repairing’ some reputational damage that Estonia, via its EKRE-associated Ministers in the Government, incurred in communication with Finland, Lithuania, and Sweden. Finally, as Raik noted, there is a “lesson learned for other Western countries experiencing similar political trends” – the lesson is that “including radical populists in government does not solve the problems that explain their rise, such as alienation and bitterness among sections of society”14. It means that the so-called mainstream politics, which is back on track in the United States or, for that matter, Estonia will be required to urgently work out a range of solutions to prevent the radical populism from entering the political summit once again. Does it sound like a common task for 2021?

13 Kristi Raik, ‘Liberal Estonia is Back—With Some Lessons Learned About Engaging with Radical Right-wing Populists’ in ICDS, 21 January 2021. Available from [https://icds.ee/en/liberal-estonia-is-back-with-some- lessons-learned-about-engaging-with-radical-right-wing-populists/]. 14 Raik.