After the resignation of Jüri Ratas (Estonian Centre Party) on January 13th, due to an inquiry entailing alleged corruption charges against his party, Kaja Kallas, the centre-right Reform Party’s leader, has become the first female Estonian Prime Minister. The list of the leading women in Northern Europe is growing faster. This is good news for equal opportunities, open society, and meritocracy. Despite Kallas’ victory in the general elections back in 2019 (28% of the votes), Ratas – whose party ranked second with 24.7% – preferred to form a coalition with the national-conservative Isamaa and the far-right populist EKRE, Conservative People’s Party of Estonia. Finally, on January 25th Kallas was sworn in and the wind of change has since been blowing in Estonia. Which, in the past thirty years has already shown good economic growth, flexibility, and resilience to geopolitical circumstances. Kallas’ new government will nevertheless face many challenges.
From energy to employment, from foreign policy tensions to relations with the EU, all while keeping the values of freedom, individual responsibility, and tolerance at the centre of its agenda. Kallas excluded EKRE from the cabinet. Its anti-European, anti-immigration, and nationalist policies and rhetoric aren’t compatible with her values. The new administration is likely to promote human rights and open society-style policies. Personal freedom and competition are the keys to a responsible citizens’ government and the major objectives of the new PM’s liberal policy. Kallas has already given clear signals of open-mindedness and inclusiveness. The new government consists of a gender-balanced cabinet, equally split in terms of portfolios with the coalition partner, the Centre Party. Their alliance encompasses the two biggest parties in the 1.3 million people country, representing a comfortable majority in the Parliament, a positive signal of stability also for foreign investors.
Antitrust lawyer, daughter of Siim Kallas – former Estonian PM and European Commissioner – the Reform Party’s Chairwoman will carry on with market-oriented policies. Of course, Kallas’ priority will be the fight against Covid-19 and the administration of vaccines to the population. She has promised to keep Estonia open as much as possible so that adults can go to work, children to school and economic activity can continue as much as possible under the present dire circumstances. From the security development including private actors to modern youth and cultural policies. From family policies to free entrepreneurship. Progressive on social issues (gay marriage), open to ecology (limit investments in the fossil industry), Kaja Kallas will give the priority to clean energy and digitalization, issues she has dealt with for several years as an MEP (2014-2018).
The defence of personal freedom, a fair tax system, social inclusion, high-quality education, human dignity, and power to the local governments are the policies Kallas is going to push forward. In this sense, her government will be aligned with traditional Western and European Union values. Estonia is now entering a new phase: the pro-European, pro-entrepreneurship, and pro-business Reform Party has to face the economy in turmoil. The new government is expected to avoid protectionist policies. The support of the Estonian 0% corporate tax on the re-invested income as well as the cut on the flat income tax reflect the classically liberal economic posture of Kallas’ party. Competitiveness, technological innovation, and strategic decision-making are equally at the centre of the government’s programs. Active and staunch NATO member, Estonia will have also to deal with the challenges of economic uncertainties, unemployment (around 7% in 2020), climate issues.
Add to this the migration challenge and Russia’s attempts to subtle influence the course of Tallinn’s foreign policy. Furthermore, the government will also face the revitalization of Estonian rural areas, the problems related to the aging infrastructure and modernising education at schools. While keeping the individual at the centre of the society, Kallas wants to make Estonia more competitive. Liberal-conservative ideas are the cornerstone of the Squirrel Party, which under Kaja Kallas’ leadership in the 2019 elections scored its best result ever. Kallas is young and dynamic, but she will have to find the balance between the control of the pandemic and the economic activity. Her agenda and the challenges Estonia will face are diverse and complex. The final test for Kallas will, however, be the Estonian general election taking place in March 2023.