Stockholm (Ekonamik) – Parliamentary elections are set in Estonia for Sunday, March 3. The nationwide vote to Estonia’s 101-member Riigikogu (parliament) is traditionally a contest between the two largest ruling parties, although the surging popularity of a new right-wing populist party will make coalition-building calculations more complex.
Public support for the Centre Party, the senior ruling coalition member, as well as its main competitor, the opposition Reform Party, lies just south of 30% for both. Both are comfortably ahead of the rest of the field but support between them remains volatile, suggesting the possibility of a marginal advantage for, and shift towards, the Reform Party.
Meanwhile, junior coalition partners in the ruling coalition and parties supporting the opposition are struggling to maintain their position in relation to the Conservative People’s Party of Estonia (EKRE), the rising nationalist party, and other less prominent challengers.
The three-party ruling coalition headed by Jüri Ratas of the Centre Party consisting of the CP, the Pro Patria conservative grouping and the Social Democrats have governed during a relatively prosperous and stable period since a contentious election in 2016.
Estonia has been the beneficiary of favourable economic trends, allowing the government in 2018 to increase the tax exemption rate to €500 per month for taxpayers earning under €1,200 monthly, the national average salary – a popular measure. Other tax reforms have included lowering the corporate income tax and increasing Estonia’s attractiveness to foreign investment as a business-friendly and cutting edge high-tech country.
The OSCE projects economic growth to reach 3.5% in 2019 but slow to 2.3% in 2020 due to weakening external demand, though increasing real wages will support private consumption growth. Strong business confidence and a recovering housing market will spur investment, but inflation will remain at a high level, according to the OECD’s forecast.
Estonia’s GDP grew by almost 5% in 2017-2018 despite the shortage of local labour, a feat achieved partly by importing foreign skilled professionals, which resulted in the biggest population spurt since Estonia’s independence in 1991. However, this simultaneously caused a rise in nationalist sentiment, exacerbated by the migration crisis in Europe from 2015.
EKRE currently enjoys the support of around 20% of Estonian voters heading into the election, making it the third most popular party and putting it narrowly behind the two major parties. If this level of support holds, EKRE will significantly increase its presence in parliament, nearly doubling the seven seats it currently holds.
Like populists elsewhere, EKRE portrays itself as anti-elitist and committed to safeguarding conservative values while demonising the EU’s influence in domestic affairs. A recent study from the European Council on Foreign Relations designates it as a “nationalist, xenophobic, anti-liberal and Eurosceptic party.”
Unlike its sister parties throughout Europe its supporters are not, however, pro-Russian, rather seeing the country’s large Russian minority as the target of their ire. The party also favours NATO membership.
Estonia 200 is another centre-right party emerging from a joint initiative by representatives of higher education and big business. It enjoyed a surge in popularity following a proposal to switch pre- and primary school education from bilingual to Estonia-only to foster integration of ethnic minorities, including Russian speakers, which helped it to win support at the expense of Pro Patria and Reform parties. A botched campaign poster suggesting ethnic segregation, however, has cost its momentum since then.
Whichever of the main political parties wins, then, faces the challenge of forming a multi-party coalition with the range of smaller parties while attempting to exclude EKRE. The promising economic performance under the current government has allowed it to survive, but the incumbents are likely to be unable to secure an overall majority of seats due to the declining support of the Social Democrats and Pro Patria.
Better electoral results than projected for the smaller parties will be a key factor in facilitating the formation of a stable government that can isolate EKRE.
Image: Estonian Parliament Building 2005 (Wikimedia Commons)