Following an election last month, the Estonian parliament resolved on Wednesday to retain Prime Minister Kaja Kallas despite her proposals to raise taxes and defense spending in response to perceived Russian threats.
Due to the ongoing conflict in Ukraine and Russia’s desire to dismantle current European security standards, the new three-party coalition of Prime Minister Kallas warned that “Estonia will for the next several years face the most challenging security scenario since World War II.”
The prime minister’s liberal Reform party formed a coalition with two other liberal parties, Estonia 200 and the center-left Social Democrat Party, after securing 60 of 101 ballots in the March general election.
To balance the budget, the coalition has pledged to increase the value-added tax and income tax by two percentage points and to increase defense spending from 2.85 percent of GDP in 2023 to three percent of GDP in 2027.
