Jüri Ratas resigns as prime minister following loan scandal

Jüri Ratas (Center) resigned as prime minister of Estonia in the early hours of Wednesday morning in the wake of a scandal surrounding a Tallinn property development.

Ratas expressed his gratitude for the opportunity to serve Estonia as prime minister for four years, saying that his tenure helped improve the standard of living at home and strengthened the country's standing abroad.

Ratas told journalists that: "In politics, very difficult choices have to be made to resolve difficult situations. A politician has to be ready for that."

He said that the decision to resign was made after consultations with Center Party board members of the party which lasted for more than 14-15 hours.

"This decision, as I said, was made as a result of consultations with the board of the Center Party, fellow members of the party group, and the closest people in my post. While there was certainly a range of different solutions, only one of these seemed to be the right one," Ratas said.

"The suspicions lodged by the Office of the Prosecutor General today do not yet mean that someone is definitely guilty, but they inevitably cast a serious shadow on all the parties involved. In such a situation, giving, through my resignation, a possibility to shed light on all circumstances and achieve clarity seems the only right thing to do. Under conditions of political and societal calm. I am convinced that the investigating authorities will do their work professionally and without bias and will establish the definitive truth also in this case."

Ratas: I was unaware of KredEx Porto Franco loan details

He also said that he was not informed about the Porto Franco loan details.

"Despite taking political responsibility, I can say with full peace of mind that as the prime minister, I have not made a single malevolent or knowingly wrong decision. As of today, I have communicated with both the prosecutor general and the ISS, who both affirmed that they have no suspicions with regard to myself. As the head of government, I did not feel in the Porto Franco case either that some minister or political party had tried to influence the decisions made by the government in an unlawful direction," he said.

Ratas added that the KredEx loan had been comparable to a €100-million sum granted to ferry line Tallink in summer. Several major loans were issued to firms who had demonstrably been hit by the coronavirus pandemic and its economic effects. Since Porto Franco was an unfinished project, critics cast doubt on why it qualified for the money.

"As the chairman of the Center Party, I can also affirm with absolute sincerity that I have never made or approved of any action undermining justice or the sense of justice when leading the party. Naturally, as the chairman of the party, I also must bear responsibility for this issue to be resolved in an unambiguous, clear and just manner," Ratas concluded.

Pressure mounted through Tuesday

Ratas had appeared on ERR's Vikkerraadio show "Stuudios on peaminister" Tuesday afternoon as news emerged that the Internal Security Service (ISS) was investigating the offices of state credit agency KredEx over suspicions of corruption regarding a €39-million loan granted to the Porto Franco real estate development in Tallinn's harbor district.

Five people are currently the subject of the ISS investigation, directed by the prosecutor's office, including Kersti Kracht, adviser to finance minister Martin Helme (EKRE), Center Party Secretary General Mihhail Korb, and businessman Hillar Teder. Korb stepped down as Center's Secretary General late afternoon Tuesday.

Teder is under suspicion of bribe-giving and Kracht of influence peddling. Korb is suspected of a second degree crime, BNS reports. The names of the remaining suspects have not been disclosed but are reported to not be of public figures.

What happens next?

According to the constitution, when the prime minister resigns, the whole government resigns. So this is the end of the current coalition with Center, EKRE and Isamaa.

Ratas will likely continue as caretaker prime minister until a new coalition is formed and the new coalition could include the current lineup of Center, EKRE and Isamaa or additional parties. 

Section § 92 of the Estonian constitution says that "the Government of the Republic resigns upon:

1) the first meeting of the new Riigikogu;

2) the resignation or death of the Prime Minister;

3) the expression of no confidence in the Government of the Republic or the Prime Minister by the Riigikogu.

The President releases the Government of the Republic from office at the time of assumption of office by the new Government."

On Wednesday morning, President Kersti Kaljulaid asked chairman of the Reform Party Kaja Kallas to form a new government and she now has 14-days to do so.

If Kallas is successful, she will be Estonia's first female prime minister.

The Reform Party has 34 seats and is by far the largest party in the Riigikogu, but it needs 51 seats out of 101 to get a majority.


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Editor: Andrew Whyte, Helen Wright

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