MEP Sven Mikser (SDE) says that Reform Party leader Kaja Kallas holds the key to this, with SDE's leader Indrek Saar saying Center continuing in office would be unethical.

Ratas resigned early Wednesday following an Internal Security Service (ISS) investigation into a €39-million loan to a Tallinn real estate development by state credit agency KredEx. Five people, including Center's former Secretary-General Mihhail Korb, are under suspicion of corruption.

Mikser wrote on his social media account that: "In any case, in order to restore Estonia's political health and political credibility, it is extremely important that both Jüri Ratas and the Center Party consider the [opposition] bench, draw conclusions and clean up internally - at least until the corruption case which started yesterday, and the party's finances, are clear."

Mikser added that if Center is faced with having to return substantial donations or pay fines, this should be done at a time when they were not in control of state and administrative organs.

Businessman Hillar Teder, one of the five suspects in the Porto Franco investigation, is suspected of striking a deal with Mihhail Korb to provide €1 million in donations in order to smooth the way for access routes to the Porto Franco development, in Tallinn's harbor district.

Mikser also said that Center should no longer be the single power holding office at city government level, following autumn's local elections.

"The last difficult decision for Prime Minister Jüri Ratas (i.e. resigning – ed.) has now been made in any case, and the next step is to try to make the right choices already, with the leader of the Reform Party, Kaja Kallas."

Reform has the largest number of seats, 34, at the 101-seat Riigikogu, following the March 2019 general eleciton, but found itself locked out of negotiations as Center, with 26 (now 25 – ed.) seats went off into negotiations with the Conservative People's Party of Estonia (EKRE, 19 seats) and Isamaa (12 seats).

Reform and SDE together had only 44 seats, not enough to form a coalition. SDE was last in office with Center and Isamaa, from November 2016, following a vote of no-confidence in Taavi Rõivas (Reform) as prime minister, when SDE and Isamaa replaced Reform with Center.

Saar: Involving the Center Party in a new government lineup would be unethical

Indrek Saar told ETV morning show "Terevisioon" that Center continuing in office, even with Reform, would not be ethical.

Saar said: "It would be morally very difficult to look at what the Center Party has done. And this has been a recurring pattern. There was also a donation of €50,000 last spring, which was unanimously justified by the Center Party board. It was completely embarrassing. Eventually we found that that donation had been a forbidden one."

Saar added that Center's finance issues have been systemic.

"In this context, it seems that the change in the party's leadership must be very great in order to restore confidence in the Center Party," he said, adding that the first indication of what will happen next will come via the Riigikogu's agenda for Wednesday, which, he said, will also give an indication whether SDE has any opportunity in forming a potential new coalition.

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."

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