Estonia's new coalition agreement

Signing of the coalition agreement on July 15, 2022.
Signing of the coalition agreement on July 15, 2022. Source: Priit Mürk/ERR

Last week, Estonia's new Reform/Isamaa/SDE government signed a coalition agreement laying out the terms of their next eight months in office. ERR News republishes the document in full below.

The coalition will focus on security, Estonian-language education and the economic security of the Estonian people

The government coalition that will be created will focus on strengthening comprehensive security, transitioning to Estonian-language education, and increasing the economic security of Estonian people.

We acknowledge that the war in Ukraine will exacerbate the social, economic and social tensions caused by the coronavirus and price increases. In order to reduce the above-mentioned effects, we aim to mitigate the rise in the price of energy carriers and to ensure a better coping of Estonian families.

In addition, we will increase the income tax-free minimum and we will start with the reform of long-term care, which will also help people to cope better with the increase in the cost of living. In order to achieve stable energy prices, we will accelerate the development of Estonia's renewable energy capacity and quickly remove energy market bottlenecks.

Our starting point for foreign policy is that Estonia must be fully protected, especially taking into account that our neighbouring Russian Federation acts as an aggressor and violates all international rules. Therefore, we consider an active Estonian foreign and security policy to be very important. We see that the solutions to today's crises lie above all in cooperation between allies and a rapid international response capacity.

We will continue to contribute in many ways to the European Union and NATO in order to defend Estonia's national interests. We will pay special attention to the maintenance and further development of transatlantic relations and support the diplomatic paths that increase Estonia's competitiveness and enrich our cultural life.

The three parties that make up the Government consider it important to address Estonia's long-term goals and development needs. In times of crisis, particular attention must be paid to the viability and accessibility of Estonian culture, responsible public finances, an innovative and environmentally friendly business environment, increasing Estonia's crisis security and the availability of social and medical services.

We want Estonia's regions to develop evenly and Estonia's rural life to be sustainable. We will use various European Union funds to expand regional development opportunities and to increase the competitiveness of companies there. We also consider access to high-speed Internet and the further development of modern demand-driven transport to be important.

In the state budget strategy to be drawn up jointly in the autumn, we are looking for solutions for wage increases in the public sector, with priority being given to the salaries of teachers, cultural and social workers, and internal security employees. For infrastructure and green investments that increase Estonia's competitiveness, for valuing education and national culture, and for improving social security and access to health services.

The cooperation of the government coalition is based on the appreciation of the Western democratic space, in which the rule of law, the separation of powers, freedom of expression and equal treatment of all people and the protection of their freedoms are unwavering elements. We are united in the spirit of the Constitution of the Republic of Estonia, which sets the goal of preserving the nation, language, and culture of Estonia through the ages.

Estonian-language education and funding of higher education

By November 1, 2022, we will adopt the Act on the transition to Estonian-language studies in kindergartens and primary schools. The transition to Estonian-language education takes place in three stages:

  • In 2022, the preparatory phase for the transition to Estonian-language education will begin;
  • In 2024, the transition to Estonian-language learning in early childhood education will begin;
  • In 2024, the transition to Estonian-language education will begin in years one and four.

The transition to Estonian-language education will be completed by 2030. Justifications for short-term exceptions granted during the transition period will be considered by an expert advisory board to the Government, which will prepare a proposal to the Government of the Republic for the application of the justified derogations.

We aim to ensure that children with other mother tongues learn Estonian and they will obtain their education in an Estonian-language learning environment. We will use versatile, science-based ways of organizing studies and complement the study methodology for the transition.

We will adopt a training and motivation programme for teaching staff that supports the transition to Estonian-language learning, and we will aim for a general salary increase of teachers, which will ensure the necessary pedagogical resources for the reform.

We will increase funding for higher education and aim to reach the conclusion of administrative agreements with universities by 2022. To this end, we are already increasing funding for higher education this year by an additional €10 million. Starting in 2023, we will increase public funding for higher education by 15 percent per year.

We consider it important that university management agreements include an obligation to ensure curricula in Estonian.

Comprehensive national defense

The government coalition gives priority to the maximum and rapid development of Estonia's defense capability in cooperation with the allies.

The accelerated development of Estonia's defense capability must be based on the military advice of the Chief of the Defense Forces, and on this basis the share of national defence costs in GDP will also be established.

We consider the development of air and ballistic defence, the capability of indirect fire and the strengthening of ground defense to be critical capability developments, and for this purpose we provide the necessary resources for the improvement of personnel capacity.

More sophisticated and expensive defense capabilities will be developed with the support and cooperation of our allies.

An endurance fee instrument must be established for further development of the Defense Forces training grounds.

We will increase the frequency of the Defense Forces reserve exercises to ensure even higher defense preparedness.

We will increase the funding of the Defense League to ensure that the Defense League's capacity is increased and that its members are trained.

We will continue to invest in comprehensive national defense, civil protection and increase our people's awareness and capacity to deal with crises.

We consider it important to increase the participation of women in wide-based national defence and we are developing a separate programme for this purpose.

We will continue with the accelerated construction of the eastern border of Estonia.

We will increase the flexibility of government and public authorities to deal with crises and we will develop a modern crisis management plan.

Weapons licenses of citizens of the Russian Federation and Belarus are revoked, and their further issuance is terminated.

Support for Ukraine

Estonia supports the continued economic isolation of the Russian Federation at the EU level, including a total ban on the transport of Russian goods by road, rail and in ports.

We support Ukraine at all international levels, including Ukraine's NATO and EU efforts.

In order to cope with Ukrainian war refugees, we will support local governments and aim to make Estonian language education available and to direct Ukrainian children to Estonian-language schools.

We will create a program to support the return of Ukrainian war refugees to their homes, ensure that they are able to stay in touch with their linguistic and cultural space, and support the reconstruction of the devastated regions of Ukraine.

It is important to ensure effective registration of Ukrainian war refugees so that the state and municipalities can better plan the social and labour market services and school places needed for refugees.

We support the creation of an international tribunal to prosecute those guilty of the Russian Federation war of aggression and those guilty of war crimes.

Energy and electricity market reform

We will accelerate the transition to renewable electricity and aim to produce the same amount of renewable electricity in Estonia in 2030 as our total annual consumption.

We will ensure the establishment of LNG reception capacity in Estonia by the autumn of this year.

We are deciding at the government level to ban the purchase of gas from Russia. The Estonian Stockpiling Agency may not purchase gas if the ultimate beneficiary is a subject of the Russian Federation.

To accelerate the development of renewable energy, we are imposing a significant wind fee for local communities.

We will shorten the length of procedural processes for planning permissions and licenses:

  • Under the direction of the Green Transition Coordinator of the Government Office of Estonia, we will carry out audits of the plans, environmental impact assessment and permit process, with the aim of accelerating the implementation of renewable energy projects.
  • We aim to carry out the procedural process of projects of national importance and cross-border projects, including environmental impact assessment, in a maximum of 3 years.
  • We will create an integrated permit for offshore wind farms and ensure the parallel process of permits.

We will make changes to the Planning Act, which obliges municipalities to include suitable areas for the establishment of renewable energy production capacity (e.g. wind and solar parks) in their overall planning.

We will not allow fictitious grid connection requests. The applicant for connection to the grid must either provide a performance guarantee or the validity of the application for connection is restricted to a limited period of time.

In the production of energy with solar panels, we encourage a consumption-based approach.

We are creating an upgraded programme of renovation subsidies and energy solutions for apartment buildings and small residences (including the exchange of domestic gas boilers for fuel-free renewable energy solutions).

We are developing a support mechanism for the construction of biomethane plants. In order to increase the share of renewable electricity, we will ensure the organization of at least reverse auctions in 2023 and we will put in place a plan for additional reverse auctions for renewable energy in 2024 and 2025 for at least 1 TWh.

In order to increase the transparency of the operation of the energy market and the efficiency of investments in electricity networks, we will carry out an analysis of the establishment of the distribution network company based on the distribution networks of Elektrilevi OÜ and Elering and the listing of this company on the stock

Electricity market reform:

We aim to adopt the amendments to the Electricity Market Act, which will create an opportunity for domestic consumers to purchase electricity as a universal service from October 1. For this purpose, we require Nord Pool, an electricity producer with a dominant position in the Estonian region, to sell the electricity produced to Estonian domestic and small consumers and to all electricity distributors at a price approved by the Competition Authority, taking into account carbon emissions fees and other production costs and a reasonable profit.

In implementing the electricity market reform, we are guided by the following criteria:

  • The electricity reform must comply with European Union law and state aid rules, ensure that all producers have access to consumers and must not hinder Estonia's transition to renewable energy.
  • Domestic and small electricity consumers will retain the freedom to continue using the current electricity package or to exchange their package for a universal service package in accordance with the rules in force.


We will review the felling volumes of the State Forest Management Centre and base our approach on the social, environmental, and ecological goals of the communities. Proposals to this effect must be submitted by the Minister of the Environment to the Government for approval.

To support the adoption of the Forestry Development Plan, we will re-launch an inclusive Forestry Assembly.

With the Forestry Development Plan, we create a long-term vision for forestry based on forest science, which creates legal certainty for forest owners and also ensures the balanced functioning of all four forest functions (economic, social, environmental and ecological).

With the Forestry Development Plan, we will further assess the factors that cause felling pressures and propose both short- and long-term measures to keep it under control.

In the case of timber sold from the state forest, we prefer producers and district heating companies with a higher added value to timber in Estonia.

The management of Estonian forests must be based on the principle that forests are net carbon sinks and that the area of forest land must not decrease.

We will maintain a moratorium on clearance cutting in Natura 2000 forest habitats for the duration of the impact assessment.

We will stop the planned felling in the disputed areas of high public interest in the state forest as of 01.07.2022. We will map the areas of the state forest of high public interest and draw up long-term management plans for them in cooperation of the State Forest Management Centre, local governments and communities.

Maritime Affairs

We will bring the fleets of different state agencies and authorities under a single management.

We will continue to develop a competitive international ship register, which will bring additional revenue to the state budget and create jobs.

We support the definition of coastal culture and the notion of a coastal population and the right to fish for coastal population by law.

We support the increased harnessing of the potential of maritime business in export markets through a cluster support measure.

Livelihoods, family benefits and price easing

We will raise the income tax-free minimum to €654 per month.

We are extending the current rate of excise duty on electricity, fuel and special diesel until April 1, 2024.

By November 1, we will adopt a law that will increase, as of January 1, 2023, the benefits essential for ensuring the livelihood of families with children in Estonia and for supporting families as follows:

  • the allowance for the first and second child shall be increased to €80 per month;
  • the single parent child allowance will increase to €80 per month;
  • the allowance for a large family rises to €600 per month for three to six children and to €800 per month for seven and more children;
  • indexation on the basis of the pension index will be applied to the allowance for large families from 2024 onwards;
  • removal from the allowance system for a large family takes place in stages – when the eldest of three children reaches the age of 24, the family allowance is reduced by one third and the same model is extended to other children.

We support Estonia's families in coping with the surge in energy prices brought about by Russia's aggression. To this end, from October 1 to March 31, we will put in place a support package to avoid excessive bureaucracy, which will mitigate the impact of rising energy prices as follows:

  • compensate household consumers for €50 of electricity price per megawatt-hour;
  • compensate household consumers for 80 percent of the gas price exceeding €80 to 2600 kilowatts-per hour of consumption per calendar month;
  • domestic consumers of district heating are reimbursed 80 percent of the price exceeding €80 per megawatt-hour.

We will increase long-term investments in energy saving and ensure the rapid introduction of investment subsidies for energy saving.

We are developing a long-term general care reform plan, given that the total annual cost of the reform will be up to €40 million from 2023. We will start by alleviating the financial burden of paying for long-term care.

Other policy priorities

We will continue to prepare privatization of state-owned holdings. We will list the share of Enefit Green on the stock exchange to give people an additional investment opportunity and an opportunity to participate in green energy growth.

We are creating a program to increase private investment in residential property outside major cities, thereby improving access to living space.

We will carry out an analysis with the aim of making the processing of criminal cases faster and more economical for the parties to the proceedings.

We will continue with the demand-based public transport pilot project and develop domestic public transport to create a better coverage route network.

We will create a measure to support innovation in public libraries to develop libraries into community service centers.

We are accelerating the development of the last mile internet connectivity program and connections.

In order to alleviate regional inequalities, we take into account the needs of the rural areas of Estonia and their competitiveness and employment when channeling European Union funds.

In coping with the spread of the coronavirus, we are guided by the goal of keeping society open and we consider it important that public services are widely available.


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Editor: Helen Wright

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