Estonian PM Vows More Defense Spending in New Ruling Coalition

(Bloomberg) -- Estonian Prime Minister Kaja Kallas vowed higher defense spending after finalizing a deal for a new governing coalition following her victory in last month’s elections, extending her tenure as one of Europe’s most ardent backers of Ukraine in its fight against Russia.

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The alliance, to be sworn in next week, will swap out one of the three parties in Kallas’s outgoing cabinet for a new administration focused on reigning in fiscal deficits and promoting socially progressive policies as well as boosting the Baltic nation’s defense.

Members of Kallas’s center-right Reform Party will dominate ministerial posts after their commanding win in the March 5 vote.

“Without security we don’t have to talk about anything else,” Kallas said at a news conference in Tallinn on Saturday afternoon. “That’s why we are increasing our defense expenditure to 3% (of GDP) in the coming years.”

Under her leadership, Estonia has stood out as the biggest contributor of weapons aid to Ukraine on a per-capita basis. Alongside Baltic neighbors Latvia and Lithuania, the country has pushed hard for tough sanctions to punish Russia for its invasion of Ukraine.

Kallas, 45, is a former lawyer and the daughter of former Prime Minister and European Commissioner Siim Kallas. Like many in the Baltics, her family was directly affected by the Soviet Union’s mass deportations in the 1940s and 1950s.

The premier’s third government since she first took office in 2021 will also include Estonia 200 and the Social Democrats. The parties described the coalition talks as arduous, agreeing to tax hikes, a minimum wage rise and marriage equality.

“We can’t live above our means. The crises of the last few years have taken us to a place where there is a big deficit in the budget,” Kallas said.

With a civil union law that’s been in limbo since 2014, a decision to adopt full marriage equality would make Estonia the first of 15 former Soviet republics to do so.

(Updates paragraphs four, seven and eight with quotes and coalition deal details.)

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