Estonian Prime Minister Juri Ratas resigned on Wednesday after his Centre Party came under investigation for corruption, raising the prospect of a new ruling coalition in the Baltic eurozone nation.
Elections are unlikely and President Kersti Kaljulaid said she would ask the leader of the opposition liberal Reform Party, Kaja Kallas, to form a government.
Kallas, who would be Estonia’s first female prime minister, would still require approval by parliament.
The outgoing government, which stays in office until a new one is found, includes the far-right EKRE party.
One of the suspects in the investigation is an adviser to Finance Minister Martin Helme from EKRE.
Ratas announced his resignation on Facebook after an hours-long meeting of his party’s board in the night.
He said he had not made “any malicious or knowingly wrong decisions” but wanted to “shed light” on the case.
The investigation centres on a property company called Porto Franco which received a large state loan and struck a lucrative deal with city authorities in the capital Tallinn, whose mayor is also from the party.
Hillar Teder, a businessman and the father of the company’s owner, donated large sums to the Centre Party.
– Far-right out? –
Political analyst Rein Toomla from the Johan Skytte Institute of Political Studies said it was “quite possible” that Ratas would stay on as a minister in a Kallas cabinet.
He said any future participation in the government by EKRE, which is also anti-EU, was “highly unlikely”.
The resignation could also scupper plans for a controversial referendum on same-sex marriage that the coalition had been planning to hold this spring.
New elections would only take place if no candidate for prime minister can command a parliamentary majority.
Estonia last went to the polls in 2019.
The Reform Party came first in those elections but failed to clinch a deal for a majority coalition.
Instead, the Centre Party forged a coalition with EKRE and the right-wing Isamaa conservatives.
Toomla said a grand coalition between Reform, Centre, Isamaa and the Social Democrats was “the most sensible option in the current complicated situation”.
Such an alliance “would ensure the biggest support for the government” in its fight against the coronavirus pandemic and to steer an economic recovery, he said.
The Centre and Reform parties have alternated in government over the nearly three decades since Estonia broke free from the crumbling Soviet Union.
Both strongly support Estonia’s EU and NATO membership, which they see as a buffer against Soviet-era master Russia.
They have favoured austerity to keep spending in check, giving the country one of the eurozone’s lowest debt-to-GDP ratios.