The new Estonian government has been officially appointed. Its first priority is to improve state finances

HELSINKI — Estonia’s president officially named the Baltic country’s new government on Monday after lawmakers gave the green light to Prime Minister-designate Kristen Michal’s three-party coalition cabinet.

Addressing the new cabinet, which is due to be sworn in on Tuesday, President Alar Karis said the government’s comfortable majority in the 101-seat Riigikogu, or parliament, carries a “special responsibility”.

According to a revised government programme approved on Friday, Michal’s first cabinet will focus on improving Estonia’s ailing public finances by, among other things, raising income tax and value-added tax, in addition to increasing excise duties on alcohol, tobacco and petrol.

In a 64-27 vote, lawmakers approved the government proposed by Michal, a veteran politician but prime minister from the ruling center-right Reform Party.

Michal, 49, who previously served as climate, justice and economy minister, was chosen to become Estonia’s new prime minister in late June, just days after his predecessor Kaja Kallas was chosen to be the European Union’s new foreign policy chief – a position she will take up later this year.

Kallas, the first woman to head the Estonian government, officially resigned a week ago, after which Michal began to consider the possibility of a broad-based coalition government. After intensive talks with the parties last week, he decided to keep the composition of Kallas’s outgoing government with the main partner of the Reform party supported by the centre-left Social Democrats and the liberal Estonia 200 party.

Beyond finances, the new cabinet also pledges to continue investing heavily in the defense and security of this small NATO country of 1.3 million people, bordering Russia to the east.

In the key government positions, Margus Tsahkna, a member of the Estonia 200 group, will remain as Minister of Foreign Affairs and Lauri Läänemets, a member of the Social Democratic Party, as Minister of the Interior. Jürgen Ligi, a former member of the Reform Party, will return to the government and take over the Finance portfolio.

Michal has been active in the Reform Party, the dominant party in Estonia, since the late 1990s. He served as Minister of Climate Affairs in Kallas’ last cabinet, which took office in April 2023.

Michal has also served as secretary of the Reform Party and as a member of the Tallinn City Council. He is expected to succeed Kallas as Reform Party chairman in the autumn.