Bloomberg News

Estonia’s Premier Ansip, Europe’s Longest Serving, Will Resign

February 23, 2014

Estonian Prime Minister Andrus Ansip, Europe’s longest-serving head of government, will resign before the end of his term to improve his Reform Party’s chances of winning the March 2015 general election.

Ansip, 57, who became prime minister in April 2005, will submit his resignation to President Toomas Ilves on March 4, he said today in a speech in the southern town of Tartu. Ilves will have two weeks to nominate his candidate to form the new government.

An avid cross-country skier and cyclist, Ansip steered the Baltic nation through its worst recession on record in 2008-2009, when economic output shrank by a fifth. He imposed austerity measures exceeding 10 percent of gross domestic product to guide the country into the euro area in 2011 as the first former Soviet republic to join.

“Even though Ansip has been successful, people are becoming quite tired of him and his governments,” said Andres Kasekamp, professor of Baltic Politics at the University of Tartu. “There’s been a vague feeling of frustration in Estonia the last couple of years, that things aren’t changing for the better. It’s sort of a shakeup to appease this feeling that there needs to be a change.”

Growth in the $22 billion-economy unexpectedly came to a halt last quarter, stagnating for the first time in almost four years amid shrinking transportation revenue and sagging exports. The central bank and the Finance Ministry predict growth will rebound from last year’s 0.7 percent on improving exports and higher wages.

Party Support

Public support for Reform has see-sawed since Ansip’s re-election in 2011 after scandals over party financing, meddling in public-media editorial appointments and tax plans burdening its key entrepreneur supporters. Backing for Reform rose to 24 percent in January, the second-highest behind the opposition Center Party, after dropping to 18 percent in November, the lowest since 2005, according to the polling company TNS Emor.

Reform Party board members and lawmakers have so far met with “one possible prime minister candidate,” European Transport Commissioner and former Prime Minister Siim Kallas, Ansip told a news conference on Feb. 20. Kallas, who served as prime minister in 2002-2003, was endorsed by the Reform Party board to form the new government in case Ansip resigns early, the Postimees newspaper reported Feb. 21. Local media said last week Ansip may switch places with Kallas within one month.

‘Potential Candidate’

Kallas, the first central bank governor in 1991-1995 after Estonia regained independence from the Soviet Union, is “ready to be considered as a potential candidate” for premier’s post even before his mandate ends, his spokeswoman, Helen Kearns, said in a Feb. 18 e-mail.

Also a former finance and foreign minister, Kallas is the honorary chairman of the Reform Party, which has stood for low taxes and capping social spending.

Kallas would focus on narrowing the income gap with neighboring Finland, while maintaining the policy of no borrowing, he told the private Kuku radio station in an interview on Feb. 21. He would also encourage more active political discussion, he said.

To contact the reporter on this story: Ott Ummelas in Tallinn at oummelas@bloomberg.net

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net


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