'Esimene stuudio': Coalition negotiators so far undecided on state finances

Panelists on Wednesday's edition of 'Esimene stuudio', March 15, 2023.
Panelists on Wednesday's edition of 'Esimene stuudio', March 15, 2023. Source: ERR

Representatives of the three parties currently undergoing coalition negotiations appearing on ETV Wednesday night did not clearly state whether tax rises, or cuts, were on the horizon, nor did they clarify what cuts and where will be made to address the current state budget deficit.

Ten days had passed as of Wednesday evening, since the Riigikogu elections, and with coalition negotiations between Reform, Eesti 200 and the Social Democrats (SDE) into their second week, ETV politics show "Esimene stuudio" brought together senior members of those three parties, and of the three de facto opposition parties, the Conservative People's Party of Estonia (EKRE), the Center Party and Isamaa, to take stock of the results, the talks and policy.

The representatives were: Reform's chief whip at the XIV Riigikogu, MP Mart Võrklaev, Minister of Economic Affairs and Communications Riina Sikkut (SDE), recently elected MP Marek Reinaas (Eesti 200), former Riigikogu speaker Henn Põlluaas (EKRE), former health minister and current Tallinn Deputy Mayor Tanel Kiik (Center) and incumbent Foreign Minister Urmas Reinsalu (Isamaa).

Henn Põlluaas kicked things off by saying that his party still wants to clarify whether e-elections are secure and verifiable, or not.

EKRE recently saw both a Supreme Court appeal on the e-vote result on March 5, and an appeal with the National Electoral Committee (VVK) thrown out.

Põlluaas said: "We want to know what is happening with the [internet voting] servers and how the final result are determined, but unfortunately we have not been informed about that," adding that there are plenty of top IT specialists in Estonia.

Marek Reinaas disagreed, and said from a tech perspective, the e-vote was conducted properly.

He also looked forward to a six-party Riigikogu, after his party won its first ever seats at the national legislature.

"When the new Riigikogu convenes, thanks to Eesti 200, Estonian political culture will get some wind in its sails, and become both more exciting and more civil," he said.

Meanwhile, addressing Henn Põlluaas, Tanel Kiik said that repeatedly saying e-elections were not secure, as EKRE has done, should not then be followed by surprise or dismay when the party performs poorly in that component of an election.

Urmas Reinsalu, who was foreign minister during the Center-EKRE-Isamaa coalition (April 2019 to January 2021), also had plenty of criticism for EKRE's approach to the issue. "You are breaking the foundations of this country. It would have been better if you had come up with these matters before the elections. Avoid talk of elections having been 'stolen', we do not need to throw a spanner in the works of the state's functioning institutions."

Other issues dealt with during Wednesday's edition of "Esimene stuudio" will be dealt with in turn.

Non-citizen suffrage

Reinsalu called it important that the new coalition, once it takes office, should strip non-citizens of the right to vote. Reinsalu would have been referring to Russian citizens resident in Estonia, who have the right to vote in local elections – as do all permanent residents.

Kiik said it would lead to additional divisions in society if the right to elect local governments was taken away from those people who live here and pay taxes. Reinaas said that the voters gave a mandate to a both. liberal and pro-Estonian policy (ie. that of his party, Reform and SDE) adding such a policy will be implemented.

State budget and savings

Võrkläev said all coalition partners are in agreement on the need to see where savings can be made, and where more money might be brought into the country. Reinaas said that Eesti 200 was aware that the state budget was running a deficit of 4.3 percent, adding: "The country's finances are in bad shape. How did we get there, friends?"

Riina Sikkut said: "We have an opportunity to implement great things. The situation with the state budget was no surprise to anyone; it was already clear in the summer what the picture was. Now we have a mandate to organize tax reform."

SDE favors a more progressive taxation system than that currently in place in Estonia, but at the same time, this stance is likely at odds with both of its coalition negotiation partners.

Reinsalu said that in a crisis, decisions need to be made. "We will come to security policy choices. It would be irresponsible to cultivate a policy of cuts in the are of national defense, but we will not back down from 3 percent [of GDP] on defense [spending]; this is a positive thing about the new coalition. Isamaa supports all proposals aimed at strengthening national defense."

Kiik said that the likely cuts are being imposed after the election, whereas before going to the polls, the average voter had not been informed that, for example, free public transport, such as in place on county bus lines for residents, will likely be abolished.

Põlluaas said that these cuts are being talked about against the backdrop of unemployment and high inflation. "Kaja Kallas stated that there will be no tax increase," he said. "But today we see the same template as was during the previous recession [of 2008-2010] when the Reform Party decided to cut back, yet companies went bankrupt and 100,000 people voted with their feet and went to work abroad."

Võrklaev said: "We have not said that we are going to make massive cuts, no, we are revising the budget. We have been living beyond our means, we have made decisions that have been 'someone's' political obsession and that were not directly related to security or survival."

Abolition of 'protection money'

A widely-panned system of providing funding, out of the state budget, for political parties' pet projects, arguably as a means of getting the main state budget voted through and, this year, with elections in mind too, is likely seeing its days numbered.

Sikkut said a decision on this will be made late on in the negotiations stage, while Reinaas said the practice would be ended.

Võrklaev, whose party long declined to take part in the scheme, until the most recent state budget processes, said ending the practice would equate to billions in the state budget.

Reinsalu said the "protection money" practice had gone too far, recalling the controversy late last year after sitting Interior Minister Laur Läänemets (SDE) entered money for his ministry which was then earmarked for improving schools in his own area.

Põlluaas however said this was a "ridiculous diversionary action."

"Ministries distribute hundreds of millions in a transparent manner, while the protection funds are honest and transparent, when done correctly," he went on, adding that Reform itself had carried out "protection money" distribution correctly.

Kiik also said the issue was a red herring.

"We are only hearing from the planned coalition about old topics, such as security. Coalition talks are always done in a spirit of cooperation, while quarrels come later. You will still have that ahead of you," he warned.


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Editor: Andrew Whyte, Mari Peegel

Source: 'Esimene stuudio', hosts: Andres Kuusk, Liisu Lass.

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