Estonian Coalition Closes Ranks After Finance Chief Quits

Estonia’s leaders vowed to keep the country’s two-party coalition together after Finance Minister Juergen Ligi bowed to pressure to resign in a row that shook the eight-month-old government.

“It’s easier for the government to move on,” Prime Minister Taavi Roivas said after Ligi quit over remarks that offended an ethnic Russian colleague and were criticized by President Toomas Ilves. Defense Minister Sven Mikser, the head of the junior coalition partner Social Democratic Party, told the Postimees newspaper that the resignation removed the “sharpest tensions.”

The cabinet, which is seeking tax cuts and higher social spending, was shaken less than five months before the next election after Ligi last week referred on Facebook to Education Minister Jevgeni Ossinovski, a Social Democrat, as an “immigrant’s son from the pink party” and “rootless.” Even as Ligi apologized and said his comments were unrelated to ethnicity, a polarized public reaction highlighted tensions deepened by neighboring Russia’s conflict with Ukraine.

“As inappropriate as that initial comment was, it was also inappropriate that this topic was escalated for short-term political profit, blown up into a bigger conflict,” Roivas told public television news yesterday. He discussed the matter with Mikser, he said.

Reduce Tensions

The government has struggled to reduce tensions with the country’s Russian minority, a quarter of the population, after the annexation of Crimea from Ukraine by Russian President Vladimir Putin, who has vowed to defend Russian speakers in the former Soviet republics. The Estonian cabinet has taken steps such as simplifying naturalization for children born in Estonia whose parents aren’t citizens.

The incident “should be a lesson to all Estonian politicians that there are topics that shouldn’t be regarded lightly,” Mikser was quoted as saying by Postimees in an interview yesterday. “One of these topics concerns relations and tensions between communities.”

Insulting compatriots based on their gender, ethnicity or origin even by accident is “unacceptable” for Estonian government officials, President Ilves said Oct. 23 on Facebook. Roivas has one month to submit Ligi’s resignation to Ilves for approval and to present a replacement.

Candidates for Post

Arto Aas, head of the parliament’s economic affairs committee, and Aivar Soerd, a lawmaker and former Finance Minister, both from Roivas’s Reform Party, were cited by local media as the most likely candidates to replace Ligi.

Maris Lauri, Roivas’s economic adviser and former chief economist of Swedbank AB in Tallinn, is another candidate after recently joining Reform, Aas told Baltic News Service in an interview.

The party’s board may agree on a candidate today, Postimees reported, citing an unidentified party spokesman.

Ligi, 55, who steered Estonia’s public finances as the country emerged from a record recession in 2009 and enforced austerity to meet terms for euro entry in 2011, is “a professional” and “set the bar very high as finance minister,” Roivas said on public television. “That Juergen is straightforward and has sometimes crossed the line is no news to anyone.”

A champion of strict budget discipline, Ligi has been skeptical of plans to boost spending to reignite a stagnant euro-area economy.

“Europe doesn’t really lack public spending,” he told journalists Oct. 15. “In fact, such spending in Europe is one of the highest in the world. What we rather need are smart investments. It matters whether investments help growth or just tie up money.”

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