When the Reform Party, Eesti 200 and the Social Democratic Party (SDE) first formed a coalition government after the elections last spring, many questioned whether political parties with such differing worldviews could make policy together. And the tensions have come.

"I'll never understand some points at which they've ended up clashing relatively hard with society over a relatively small sum of money," said executive coach Toomas Tamsar. "They had some sort of tax dispute in the beginning, involving the media and I think tourism sectors."

"Running a country by Excel spreadsheet alone, I believe, is a mistake," stated SDE chair and Minister of the Interior Lauri Läänemets. "The country should not be run based on the logic of public finances alone."

"We've had issues come up that are absolutely not matters of the government or coalition policy," said Eesti 200 chair and Minister of Foreign Affairs Margus Tsahkna. "And there's no point in denying it – the elephant in the room, meaning the so-called "eastern transport scandal," hit everyone hard; it hit Eesti 200 very hard too."

And then there was the issue of teachers' wages. But when it came to that, the camps were no longer divided according to worldview.

"In reality, that tension has existed within the coalition, concerning teachers' wages in particular, right from the start," Tsahkna acknowledged. "The [budget] negotiations at Vihula Manor were already very tense. It was clear to us in the fall already that teachers were going to strike. And we on Eesti 200's part have done everything we can to prevent the strike."

"It's true that we had differing views on whether the strike should continue or whether the strike should end," Läänemets explained. "The Social Democrats' view was that the strike shouldn't have ever even been allowed to take place to begin with, because it constitutes the final and most unpleasant form of dialogue between the government and a social group. It means that negotiations haven't yielded any results. We [the SDE] believe in dialogue."

Despite the fact that two out of three coalition partners felt that the labor dispute shouldn't be allowed to reach the point of striking, the strike took place anyway.

"I get that we have parties in the government that see this differently; this is an ideological difference in views," said Läänemets. "We remember that Margaret Thatcher also once saw miners in England as extortionists, so to speak."

"It was a matter of political will," Tsahkna continued. "And there was a clear disagreement within the coalition. We and the Social Democrats wanted to achieve good labor relations – that this additional money would first come before the strike would begin, in order to reach an agreement and go negotiate the reforms we've prepared. But it was really Prime Minister Kaja Kallas (Reform) who lacked the political desire."

Eesti 200, SDE play ball, Reform sits it out

"I'm just thinking under the logic that if we have [for example] a car and we've discovered that there's a hole in the gas tank, then we're not just going to fill it up with more gas, because that will just leak out of the hole – so we have to address the hole," said Reform chair and Prime Minister Kaja Kallas at the government press conference on January 25.

"It was clear from the get-go that I am in no way opposed to allocating this additional money if it's clear where this money will come from," Kallas said. "In a situation where we had just adopted the [state] budget, and all of the budget revenues and expenditures were in place, new expenditures can only be made at the expense of other expenditures."

"Business is also affected by those employed by the state," Läänemets said. "They generate exactly the same important value as any other business in terms of the functioning of the economy. It's just that for some reason, it's seen as there being expenditure people and revenue people, but in reality, everyone is a revenue person."

Three weeks of negotiations frayed the coalition partners' nerves, and these tensions weren't kept strictly behind closed doors.

"Former minister of education Jaak Aaviksoo – one day I was on an ETV program together with him," Kallas recalled. "And he said – I even have the quote with me – 'I'd be so very sorry if tensions rose and a link were to break and we were to find yet another €10, 20, 30, 40 million – all of this is really chump change – if we were to pay this out and we'd sweep the issue under the rug again until next time.' End quote."

"We offered up I think a dozen different versions," Läänemets said. "The latest version was the one that made it possible to reach an agreement – that the ministries will look for where they can save a little [money]."

This did end the strike, however it was only Eesti 200- and SDE-led ministries that got this money for teachers' wages together; Reform-led ministries didn't pitch in.

"These comments behind one another's backs and the scoring of points behind one another's backs that we saw with the strike – these certainly aren't going to help," Tamsar observed. "That isn't a hallmark of good [executive] culture."

Prime minister: We're a very united team

The teachers' strike put government relations to the test. Is it possible to keep going like this, or is it time to rent out Stenbock House to a new government?

"I'm not sensing any tensions within the coalition," said Kallas. "We're a very united team. Only just Tuesday we had a very thorough discussion regarding the drawing up of the state budget strategy, and in particular about the budget gap that needs to be filled. It was a very busy and serious day, where we discussed these issues and understood each other's concerns."

"Leaving or putting one minister or another under fire certainly isn't good for the prevailing microclimate within the government," Tsahkna said.

"Injustice is what I see that could undermine cooperation between members of the government," the Eesti 200 chair continued. "No government ever collapses under external pressure; it falls when internal tensions snap – once something breaks down there. When things are said, you must be able to acknowledge them to yourself and, if needed, apologize at least in private. And that's actually what's happened right now."

He added that the coalition was nowhere close to breaking up, and there's no evidence of this now either.

"It did cause a certain amount of tension – as these fundamental debates always cause tensions," Läänemets admitted, but noted that things settled down significantly after this particular deal was reached. "And you could see it too, once we finally came out of that room – that the tension had broken for everyone. I don't think there was any question about not being able to continue moving forward together."

"When it comes to achieving strategic results, cooperation is a much stronger value than competition," explained Tamsar, who provides leader development training.

"I truly don't believe that the people of Estonia constantly want to watch this constant taking of one another down," he continued. If the members of the board of Eesti Energia each had a different story regarding some sort of important energy policy issues, I don't think that board would last for very long."

But the teachers' strike was only one battle in a longer war. Lying ahead once again are state budget strategy negotiations and questions about at what expense to fill budget gaps.

"For example, the question of whether we're going to take out loans or not," Tsahkna cited. "We're already living partly on credit today, but we have a clear position that Eesti 200 won't borrow money simply to cover current expenses. Quite often these are matters of worldview, and there are actually going to be quite a number of issues that will be hotly debated in the months ahead."

"I think public finances logic is dominating too much," Läänemets commented. "Good, sound public finances doesn't mean that it also makes for good economic policy. Finance is what has to support this development."

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