Estonian leader Kaja Kallas asked to form new government

Estonia’s president on Thursday asked Prime Minister Kaja Kallas to form a new government after she tendered the resignation of her one-party minority Cabinet, ending a more than month-long political stalemate in the Baltic nation.

President Alar Karis said in a tweet after meeting with Kallas that “I signed the resignation request of Prime Minister @kajakallas but also asked her to form a new government which could start working quickly and deal with all important issues of Estonian life.”

Estonia’s government crisis culminated in early June as Kallas, leader of the ruling center-right Reform Party, kicked out the left-leaning Center Party from the two-party coalition. The parties had substantial differences over spending and welfare policies amid increasing Estonian household costs because of high inflation.

The inflation rate in Estonia, a member of the European Union and NATO whose population is 1.3 million people, is now the highest in the 19-nation eurozone, with annual inflation hitting 22% in June, according to Eurostat, the EU statistics agency. High energy prices are one of the main causes of inflation in the Baltic nation.

Last week, the politically liberal Reform Party that runs on a conservative fiscal policy platform, struck a coalition deal with the opposition Social Democrats and the small conservative Fatherland (“Isamaa”) party.

The three parties together muster a comfortable 56-seat majority at the 101-seat Riigikogu legislature. The coalition arrangement prevents Kallas, who became Estonia’s first female prime minister in January 2021, from having to govern with a one-party minority Cabinet. It is already the third government in Estonia in a period of just over three years since the 2019 parliamentary election.

The new government needs formal approval from Parliament before it can be appointed by Karis and sworn in this week or early next week. Kallas tweeted that she would be asking lawmakers for a mandate to form her second Cabinet on Friday.

The government will be short-lived as Estonia is scheduled to hold a general election in March.

The 45-year-old Kallas is the daughter of former Estonian Prime Minister and European Commissioner Siim Kallas, who was one of the founders of the Reform Party — a key political party in the Baltic country — in the 1990s. She has led the Reform Party since 2018.