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

With the resignation of the prime minister, the whole Ratas-led coalition government of Center, EKRE and Isamaa will resign.

Commenting on his decision to resign on Wednesday morning, Ratas told reporters that in the current situation it seems to be the right thing to do.

Ratas said, as prime minister, he has not made any malicious or deliberately wrong decisions and said the state prosecutor general and the director general of the Internal Security Service (ISS) confirmed they have no doubts about him.

"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 said.

On Wednesday morning, a picture of Kaljulaid and Ratas was posted on the president's Facebook page.

The caption said: "This morning I met with Prime Minister Jüri Ratas, who asked to resign." 

Ratas and the Center, EKRE and Isamaa coalition have been in power since April 2019. Ratas was also prime minister in the previous Center, Social Democratic and Isamaa coalition which formed at the end of 2016.  

Background

Tuesday (January 12) afternoon news broke 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.

The Public Prosecutor's Office says it suspects five people, and the Center Party, of criminal involvement in the Porto Franco real estate case. Among the five people Secretary General of the Center Party Mihhail Korb, adviser to the Minister of Finance Kersti Kracht and businessman Hillar Teder.

Teder is under suspicion of bribe-giving and Kracht of influence peddling. Korb is suspected of a second degree crime and resigned on Tuesday evening.

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. 

The resigned government shall continue its activities until a new government assumes office but it will avoid making any decisions of principle or decisions which increase the expenditure of the state budget, unless it is strictly necessary.

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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