Estonia parties seal coalition deal supporting NATO, EU ties

Tallinn (AFP) - The three parties set to form Estonia's next coalition government pledged on Thursday to keep the small Baltic state firmly rooted in the European Union and NATO.

The centrist Centre party, leftist Social Democrat SDE, and conservative IRL began formal coalition talks on Wednesday after embattled Prime Minister Taavi Roivas, leader of the centre-right Reform party, lost a confidence vote in parliament.

The trio that will command a comfortable 56-seat majority in Estonia's 101-seat parliament moved quickly to ensure stability as the country gears up to assume the EU's rotating presidency in the second half of 2017.

"We will adhere unconditionally to the current principles of security and foreign policy; our membership in NATO and the EU is the paramount guarantee for our security," the parties said in the joint statement confirming their cooperation.

They also vowed to spend the NATO recommended amount of at least 2.0 percent of GDP on defence, a point that US president-elect Donald Trump said during his campaign he would press with NATO allies.

"Our parties are responsible for establishing a government which has to put an end to the economic stagnation in Estonia, guard our security, increase social well-being and boost up population numbers," they added.

President Kersti Kaljulaid must designate a prime minister within two weeks, after which the new leader will face a confidence vote.

Centre party leader Juri Ratas, 38, is tipped for the job.

The respected deputy speaker of parliament became the party's new leader last weekend replacing Edgar Savisaar, 66, whose perceived ties to Russia had scared off potential coalition partners amid heightened tensions with Moscow.

The Centre party is popular among Estonia's sizeable ethnic Russian minority who account for a quarter of the 1.3 million population.

- Cooperation 'frozen' -

Ratas has been at pains to stress that a memorandum of understanding signed by Savissar with Russian President Vladimir Putin's United Russia party "never set off cooperation between the two parties."

"Since relations with Russia are very difficult and complex, the protocol has been frozen for many years," Ratas told AFP via email, adding that his party supports the EU sanctions on Russia triggered by its 2014 annexation of the Crimean peninsula from Ukraine.

Analysts in Tallinn however suggest that tearing up the memorandum would risk alienating the Centre Party's ethnic Russian supporters.

The new coalition's other priorities include measures to boost economic and population growth in order to avert a demographic crisis.

Their joint statement called for "serious measures to improve the business and economic environment in order to put an end to economic stagnation," and also said that measures designed to raise the birth rate were a top priority.

Long a paragon of fiscal responsibility in the EU, which it joined in 2004, Estonia posted 1.2 percent economic growth in 2015, with a 1.8 percent expansion expected this year, according to OECD estimates. Joblessness hovers around seven percent.

Deep reforms and years of painful austerity paved the way to Estonia's 2011 eurozone entry.

Roivas's three-party government collapsed on Monday after his SDE and IRL junior coalition partners demanded he resign as prime minister over poor leadership on the economy, while also accusing him of seeking a backroom political alliance with the popular Ratas.

Roivas however refused to step down, triggering Wednesday's vote of no confidence.