The Social Democrats noted that the coalition council meeting will determine whether the Reform Party, the Social Democratic Party (SDE) and Eesti 200 can continue governing together.

To this end, the Social Democrats will present three proposals on Monday aimed at boosting the economy and strengthening national defense. Party chairman Lauri Läänemets said he had already discussed these ideas with Reform Party member and Prime Minister Kristen Michal in February. "Now is likely the last moment to discuss them at the coalition level, as we previously agreed with the prime minister," Läänemets stated.

The Social Democrats' first proposal is to establish a €1 billion economic stimulus package for the next four years. To achieve this, the party wants to set up a working group that includes representatives from the Estonian Chamber of Commerce and Industry, labor market stakeholders, business organizations, senior state officials and economists.

"We will task the working group with developing a concrete, actionable and measurable package by the end of April to increase public sector investments in support of the economy. These investments could include necessary infrastructure projects — such as expanding main highways to four lanes — stimulating private sector investment and cutting bureaucracy. Let it be clear that, contrary to some claims, the Social Democrats also aim to reduce unnecessary bureaucracy that hinders business activity," Läänemets explained.

He added that based on the recommendations of the working group, the government would adopt concrete decisions before summer to give the economy a new boost.

The second proposal is to reassess pending tax changes and exemptions.

"For example, one of our proposals is to lower the VAT on food products and cancel the planned corporate income tax increase. This would help people by reducing the cost of essential food items, stimulate domestic consumption and enhance business competitiveness," Läänemets said.

Third, the Social Democrats are calling for a more ambitious national defense plan.

"In line with the military advice of the commander of the Estonian Defense Forces, we propose accelerating ammunition procurement and increasing the number of reservists. To achieve this, we will raise defense spending to 5 percent of GDP, a move now supported by greater flexibility in the European Union's budgetary rules," Läänemets explained.

Läänemets believes these three proposals are realistic.

"This way, we can support our economy and security while also restoring public trust in the government in the long run. It is no secret that all coalition partners are under pressure in terms of public support. However, we can rebuild trust among the Estonian people through bold and constructive actions — not through internal bickering or forming a fifth government within four years of consecutive crises. Given our current geopolitical challenges, it is crucial that we offer stable and decisive governance," Läänemets said.

Reform Party chairman and Prime Minister Kristen Michal stated this week that the Social Democrats have been slowing down processes in the government and pursuing confusing initiatives. As a result, the Reform Party is theoretically prepared to continue governing with Eesti 200 alone if the Social Democrats are unwilling to change their approach. Meanwhile, Eesti 200 expects the left-leaning Social Democrats to adopt a more right-wing, business-friendly policy stance that aligns better with their views.

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