Minister: The most challenging times for the government still to come

Margus Tsahkna (Eesti 200).
Margus Tsahkna (Eesti 200). Source: Priit Mürk/ERR

The most challenging discussions to be held within the Reform-Eesti 200-SDE coalition still lie ahead, Minister of Foreign Affairs Margus Tsahkna (Eesti 200) says.

Appearing on ETV politics show "Esimene stuudio" Wednesday, Tsahkna, who is also Eesti 200 vice-chair, said that: "We can see that more challenging times lie ahead within the government: Tensions inside the coalition are surely to rise, while some very tough decisions regarding the future of Estonia still have to be made."

"There are no answers to these at present, nor are there any to be found in the coalition's back rooms. So this kind of broader debate about what kind of state we can afford, what we can do with taxes – this all lies in the future."

Tsahkna also hinted at the legislative mountain to climb over the next few months.

"We're not talking about the distant future: By Midsummer next year, the Riigikogu must have passed all these laws if we're going to reform the tax system," he said.

This is before 2023's business is completed.

"We're near the end of the year now and we haven't even taken on the state budget," he added.

The government's proposed car tax has been one of the most unpopular of its policies so far, while VAT will be hiked by 2 percentage points from the start of 2024.

The 2024 state budget bill passed its first reading last month, but requires two more readings, with substantive amendments permissible between readings one and two, before it can pass into law.

Usually the state budget gets squared away in mid-December, just ahead of the Riigikogu breaking up for the holidays; the "last day of term" this year is Thursday, December 21, slightly later in the year than usual.

Tsahkna said that one of Reform's major election pledges, that of the removal of the "tax hump," or bracket creep, remain "absolutely on the table," echoing comments he had made on the topic as the current coalition was entering office in April.

"When you have a hole of one billion euros in the budget from 2025 – maybe a little less, a little more – then all issues are on the table," he went on, adding that there are precedents for coalition agreements in the past not matching up with the ensuing economic situation that coalition went on to face.

"There are no magic solutions that will bring us out of the crisis. And that must be stated honestly," the minister said.

Whoever becomes Eesti 200 chair to replace Lauri Hussar, who announced this week he would step down from the post in order to concentrate on his role as Riigikogu speaker, will need to be able to navigate their way through this challenging situation "and be prepared to be even more unpopular," Tsahkna said.

"We need to fix our country, and this is not just a slogan – you're going to see some very tough debates happening over the next three to four months."

Tsahkna would not rule himself in or out as the next party leader; Eesti 200 has three ministers – Kristina Kallas (education), Tiit Riisalo (IT and foreign trade) and Tsahkna himself. Of these, Kallas was already party leader from its inception in 2018 to Hussar's takeover ahead of the March elections.

Leader of Eesti 200 coalition partner SDE, Lauri Läänemets, had on Tuesday expressed a view that Eesti 200's next leader need not come from its cadre of ministers in any case, and/or things could be the other way round, ie. the new leader subsequently getting appointed a minister.

The minister rejected claims of Eesti 200 simply being an adjunct of the Reform Party. "There is no way that the Reform Party and Eesti 200 are one and the same," he said.

"While Eesti 200 cannot make decisions alone, with its 14 seats, neither then can the Reform Party, with its 37 seats. That much is clear," Tsahkna added.

On the other hand, the party's greatly reduced rating, from nearly 16 percent shortly after the March, election to around 6 percent at present, according to one survey – the lowest for any of the six elected parties – is not a pressing issue in that the 14 seats won in March remain, the party is in office, and the next Riigikogu election is three-and-a-half years away.

While Reform has also seen its rating tank, to third place behind Isamaa and EKRE according to one recent survey, as noted it has 37 seats, while there is no clear mechanism for removing the party or the coalition it leads. The Constitution does provide for elections on an extraordinary basis, but this has not been done in the entire 32-year history of that Constitution in action. A vote of no-confidence in Kaja Kallas as prime minister could in theory by filed by her own party, or she could see another candidate elected to the leadership post at this month's general meeting – but the party announced earlier in the week that she would be running as the sole candidate in any case.


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Editor: Andrew Whyte, Marko Tooming

Source: 'Esimene stuudio,' interviewer Priit Kuusk.

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