Neither the head of state, President Alar Karis, nor Chancellor of Justice Ülle Madise have called for the prime minister to step down; Michal said it would be an odd state of affairs if this had to happen every time ministers were replaced.

While changes in government tend to happen at least once during the four-year election cycle, this time the Reform Party and Eesti 200 intend to continue in office alone after removing SDE at the start of the week.

It is not yet clear whether this would require a new coalition agreement being drawn up, though this seems likely – as indeed happened last summer when the Michal-led Reform-SDE-Eesti 200 administration replaced the Kaja Kallas-led government of the same three parties.

https://news.err.ee/1609630082/reform-and-eesti-200-could-draw-up-completely-new-coalition-agreement

Speaking to Esimene stuudio, Michal said that President Karis had not suggested he should resign, nor that the entire government should do so, but instead the head of state inquired about future plans.

The exit of SDE has left the new bipartite coalition with far fewer Riigikogu votes than the comfortable, roughly 65 votes it could count on before. Now, Reform and Eesti 200 together have 52 seats in the 101-seat chamber.

Michal did not express concern about this, however.

"We and Eesti 200 together have more than half the votes," he said.

He also noted that a wholesale resignation would not be the norm in other European countries when this situation arises.

"In Europe, governments do not resign every time there is a ministerial reshuffle," Michal went on.

There was an element of déjà vu too, going back 16 years.

"A similar precedent was set in 2009 when Andrus Ansip's government removed SDE from the coalition because they were unwilling to make cuts, meaning the transition to the euro and dealing with the economic crisis would have been jeopardized. Similar choices have been made later as well," he continued.

Michal added that according to the chancellor of justice, the entire government does not need to resign either.

"I have also asked the chancellor of justice, who says that in such a situation, during a government reshuffle, the prime minister does not have to resign when ministers leave. Otherwise, it would be odd if the prime minister had to resign every time a minister was removed."

"In a parliamentary republic, the legislature always has the right to test whether the government has majority support. There is a mechanism for this. It is all in the constitution," the prime minister said.

Michal criticized SDE for frequently positioning themselves as an opposition within the government.

"SDE have for quite some time positioned themselves outside the government. This has not only been the case during my government; political analysts have pointed it out before. In their messaging and choices, they have often positioned themselves as the opposition within the coalition. And it is somewhat inevitable that if you position yourself that way, at some point, you will also find yourself outside," Michal went on.

"I think SDE also realized what the other governmental parties did — that you cannot function when some pull right and others left, leaving decisions unmade. In the end, what proved fatal and decisive for us and SDE was that they gradually blocked necessary economic decisions needed for economic growth and entrepreneurship," the prime minister continued.

"That was likely the most crucial factor. Plus perhaps the desire to spend more, redistribute, and regulate is certainly more alien to right-wing parties like the Reform Party and Eesti 200," he added, referring to those parties' economic stance.

Michal denied the removal of SDE was influenced by State Secretary Keit Kasemets, as claimed by SDE leader Lauri Läänemets.

"The state secretary does not give me political advice; he gives me professional advice," Michal said, calling Läänemets's statement "foolish."

"If you have been blocking the recruitment of skilled workers since November, or as in the last case, halt the simplification of nature protection rules; or whenever additional money is needed for national defense, it must necessarily be matched by an increase in funding for the Ministry of the Interior — then whether the state secretary is Taimar [Peterkop, Keit Kasemets' predecessor], Keit, or anyone else, it has nothing to do with them. Policymaking will get you removed from the government. And so it did."

Reform, Eesti 200 want to cut down state by around a fifth

Reform and Eesti 200 are both on the same page, by their public statements, when it comes to slimming down the state, something both were at loggerheads about with SDE.

This would involve cutting the public sector by about a fifth.

Eesti 200 leader and Education Minister Kristina Kallas said that some state agencies or foundations could even be closed down.

Michal agreed, stating that in his opinion, for example, the State Real Estate company RKAS is not needed.

He said: "I think the entire privatization list of state-owned assets could always be bolder, and lengthier. We could start with RKAS. The state should have the role of an intelligent client. But having a vast real estate portfolio which competes with the market — I tend to agree with entrepreneurs here — do we really need that?"

Budget cuts should begin with reducing regulations and controls, he added.

"The budget-cutting plan should start from the correct end. My idea with this plan, including input from entrepreneurs, is to review norms and controls. There is a huge difference between blanket controls and risk-based controls. This also means that if you have fewer regulations and checks, you need significantly fewer people. So, yes, we are setting quite an ambitious goal. I hope the public understands this. Even if we don't succeed entirely, we'll achieve at least half of it," he went on.

One of the last public disagreements between SDE and the rest of the government concerned a fairly small area of bureaucracy, namely the extent to which documentation is required for loose-packaged foodstuffs when being donated to food banks.

Michal would not disclose when asked whether and how many ministerial positions might be eliminated or whether any ministries would be merged.

"I have some ideas, but I will discuss them first with party colleagues and partners, then in a few weeks, we will share them with the public," he concluded.

A new coalition agreement between Reform and Eesti 200 would in any case expunge all SDE-sponsored policies contained in the current agreement.

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