Estonia's centre-right coalition wins election

Reuters News
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Posted: Mar 18, 2011 4:30 PM
Estonia's centre-right coalition wins election

By David Mardiste

TALLINN (Reuters) - Estonia's prime minister won elections on Sunday and he said he wanted to keep the current center-right coalition after it successfully launched the euro and got the Baltic state on a path out of a deep recession.

Analysts expect a new center-right government to maintain fiscal restraint in the debt-ridden single currency zone. Keeping a tight rein on finances allowed the nation of 1.3 million to become the 17th euro zone member in January.

With almost all votes counted, the Reform Party of Prime Minister Andrus Ansip had won 33 seats while current junior coalition partner, Pro Patria and Res Republica Union, won 23.

That gives a total 56 seats in the 101-seat house, six more than the parties together won in the last election.

Ansip told Estonian television after the election that the coalition talks would not be easy, despite the win by the two current partners, and said: "We have been through difficult times and I do not want to change partners."

RECOVERY

The Reform Party campaigned under a slogan of "You can be sure" and touted its credentials as a good economic manager.

Estonia has the lowest debt burden in the European Union and one of the lowest fiscal deficits.

"The key issue is how do we get out of the recession and back on to the road to success -- it is about the future," said civil servant Siiri Aulik, 43.

Most opinion polls had shown Reform winning the vote, though one on Tuesday predicted Ansip might need to negotiate with a third party, possibly the center-left Social Democrats.

The Social Democrats came in third with 19 seats.

The Center Party, the main opposition group, was hit by allegations it asked for funding from Russia, Estonia's neighbor which is traditionally regarded with distrust. The party denied the allegations. It came second with 26 seats.

Russia has often criticized Estonia for failing to properly integrate its large Russian-speaking minority, many of whom do not have citizenship and cannot vote in national elections. Estonia has rejected such criticism.

Estonia's economic output dropped 14 percent during the 2009 recession, the third worst in the EU after fellow Baltic states Latvia and Lithuania.

The government had to cut spending to keep its budget deficit within euro-zone limits to adopt the currency.

Estonia remains one of the poorest countries in the EU, which it entered in 2004, the same year it joined NATO.

Its fiscal situation is sound -- the European Commission has forecast a total public sector budget deficit of 1.6 percent of output for 2011, in line with the euro area average.

State debt, forecast at 9.5 percent of output for this year, will be by far the lowest in the euro zone and well below the average 86.5 percent of gross domestic product. The government has pledged to get the budget back in balance by 2014.

(Reporting by David Mardiste, additional reporting by Patrick Lannin in Stockholm; Editing by Matthew Jones)