The discussions are expected to focus on defense, security, and economic reforms.

Delegations from both parties gathered at the seat of the Estonian government, the Stenbock House on Toompea, on Saturday, to commence the first meeting of official coalition negotiations.

Ahead of the talks, Reform Party chair and Prime Minister Kristen Michal told the media that they would be starting with the foundational document of the coalition agreement.

He elaborated in saying that the first area of focus would be security.

"On security, the question is, if our allies go to Ukraine to ensure peace plans, then what is our plan. I say that if the allies go, we will not stay behind," he said, referring to suggestions of a European peacekeeping force to be deployed to Ukraine.

Michal further explained that one of the key issues in the negotiations would be determining how and at what speed to increase defense capability and spending. If this is to be done as rapidly as possible so as to procure all that is viable, cuts in welfare spending must be under consideration, while bureaucracy must be reduced.

On this, Michal was reiterating statements he has made recently.

"There is no point in fantasizing about numbers right now, but it is clear that [costs] will rise," said Kristen Michal.

He noted that Estonia will also want to capitalize on the relaxation of EU loan regulations in financing defense investments.

Eesti 200 chair and Education Minister Kristina Kallas, meanwhile, said the principles of the foundational agreement would be set out within the week, covering economic reforms, government composition, and defense.

Once these have been established, the two parties will move on to a broader coalition agreement, she said.

"In many areas, a long-term plan is absent right now. For example, in the economy, with energy, and in education. This time around, the reform plans will be significantly more detailed," Kallas went on.

On defense spending, Michal noted specific proposals from Defense Minister Hanno Pevkur (Reform) are due on Tuesday, based on NATO's force capability goals and recommendations from the Estonian Defense Forces (EDF).

On reducing bureaucracy, Michal suggested one policy as replacing blanket inspections with risk-based ones, and eliminating unnecessary sustainability reports for private sector companies.

In addition to Michal and Kallas, the initial negotiations involved Economics Affairs Minister Erkki Keldo (Reform) and Foreign Minister Margus Tsahkna (Eesti 200).

This is the third time since spring 2023 that the two parties have met to hold coalition negotiations, with a view to issuing a coalition agreement.

The first Reform-Eesti 200-SDE agreement was replaced last summer by a second pact following the exit of Kaja Kallas as prime minister, and her replacement by Michal.

The removal of SDE also required a new coalition deal, which naturally will not include that party's policy considerations.

Both parties said Friday that the new coalition agreement will be significantly more specific than its predecessor.

SDE's four former ministers will also need replacing. As part of the curb on bureaucracy, mergers within and between ministries may also happen, coalition negotiators have said.

Base text to be approved in a week

By the end of Saturday, party leaders formulated principles on security and national defense, tax cuts and tax system reform, improving economic competitiveness, and reducing bureaucracy. They also outlined how the coalition negotiation process will proceed.

The final wording of the initial agreement will be agreed upon by Sunday. The next meetings are scheduled for Monday and Tuesday, after which party leadership boards will discuss the text.

On the following Saturday, the parties' councils will convene to approve the foundational text of the coalition agreement.

Over the next two months, reform plans in other sectors will be drafted, led by ministers in collaboration with other leaders of the governing parties in their respective fields. Members of parliamentary factions, external experts, interest groups and market participants will also be involved. By the end of the process, reform plans for various sectors will be presented to the negotiation delegation. This delegation will consolidate the sectoral changes into a comprehensive plan, which will then be submitted to party leadership boards and councils.

The coalition agreement is being drafted by Kristen Michal and Erkki Keldo from the Reform Party, as well as Kristina Kallas and Margus Tsahkna from Eesti 200.

Earlier this week, on Monday, the Social Democratic Party was expelled from the existing government coalition of the Reform Party, Eesti 200 and the Social Democrats.

The article was updated to add a coalition agreement timeline.

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