Estonian Prime Minister Kristen Michal stopped the coalition with the Social Democratic Party due to the decline in his government’s approval ratings. This decision leaves Michal’s center-right Reform Party governing alongside the economically liberal Estonia 200, together holding a slim majority of 52 seats in the 101-member parliament.
The recent polls showed that only 14% of voters support the three governing parties. This is the lowest value since 2004.
The reason to stop the coalition was inability to agree on tax policies, labor and environmental rules. Michael announced that he canceled the increase of corporate tax. “We want to make things easier for the economy,” Michal told, adding “we won’t compromise on security.”
After more than 2 years of recession, Estonian economy started to grow in the last quarter. Amid this context, the state has announced a tax increase to fund defending spendings. Estonia has agreed to spend 5% of the GDP on defense, one of Trump’s key demands of allies.
“If the prime minister’s hand is shaking just because of domestic ratings, how will he hold his nerve when the Trump administration starts presenting us with ultimatums?” Social Democratic Party Chairman Lauri Laanemets said in a statement.
