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17 October, 2012  ▪  Erkki Bahovski

Estonia: New Parliament Heralded Decisive Shift to the Right

Elections to the new Estonian Parliament, the unicameral Riigikogu (as it is called in Estonian), on 20 September 1992 marked a watershed in the Estonian politics and laid the foundation for further successful development.

Why a watershed? Until then, Estonian politics had been dominated by and large by left-wing political groups, either the successors to the Estonian Communist Party or the Popular Front which followed a more moderate course. Right-wing parties which had taken a more nationalist and liberal path (there is no contradiction here, E.B.) had been clearly less visible during the transition period of 1987 to 1991.

The adoption of the new Constitution in the summer of 1992 meant also that the parties had no time to hold proper election campaigns and this was probably why the right-wing Isamaa (Fatherland) took a landslide victory gaining 29 seats out of the 101 seats in the Riigikogu (28% of the votes). Since the potential allies Moderates (Mõõdukad) received 12 seats (9.73%) and the nationalist ERSP (Estonian National Independence Party) 10 seats (8.79%) the seeds for the Triple Union had been sown and the ground fertilized for the emergence of 32-year-old Mart Laar as prime minister.

The Popular Front ranked only 3rd with 15 seats (12.25%). Their failure can be explained by the fact that the Royalists obtained 8 seats (7.12%) and this meant less seats for the Popular Front. Some think that the election victory of the right-wing parties can be attributed to this Estonian individualism.

The Royalists wanted Estonia to be ruled by a king (who was to be brought from Sweden) and their actions were not taken very seriously, even though some of them gained a lot of media attention (e.g. for bringing a stuffed marten to the Parliament as the speaker's surname was Nugis, meaning marten in Estonian). In 1995, they were not re-elected.

Unlike the pre-war 100-seat parliament, Riigikogu had 101 seats in order to avoid political deadlocks. The election threshold of 5% was also important because it prevented small parties from being elected and thus boosted political consolidation meaning that less time was wasted on political horse trading (as is often the case with smaller parties who tend to blackmail larger parties by being able to influence the final balance of votes).

The election victory of Isamaa with Mart Laar as the new Prime Minister marked a decisive shift to the right unlike in most of the Eastern European countries which continued to be ruled by ex-communists or their associates. Laar was very strongly anti-communist.

The emergence of Laar meant also the start or re-start of very fundamental reforms: privatization, de-collectivization, the introduction of flat-rate taxes and the abolition of customs tariffs. The image of Estonia being the most liberal country in Eastern Europe was created namely via the reforms of 1992 to 1994 when Mart Laar and the Triple Union were in power.

Laar had two examples to follow. He has said on many occasions that British Prime Minister Margaret Thatcher was one of his favourite politicians. It was Thatcher who broke the power of British trade unions and started very large privatization in the United Kingdom. Laar did essentially the same thing: he did not support collective farms and opened Estonia’s borders to foreign competition. Unlike other countries in Eastern Europe, Estonia had practically no customs tariffs (they were re-introduced with Estonia’s admission to the EU) and sometimes Laar is accused of destroying Estonian agriculture.

Laar has himself admitted that the only book he had read on economic policies was that by Milton Friedman. So Laar and his government took the line of very strict monetary policy which has dominated in Estonia ever since. The new Estonian currency, the Kroon, was introduced before Laar, but his government created the tradition of a balanced budget. Only a few later governments have broken this unwritten rule and even then it has been possible to restore the budget balance very quickly. A balanced budget helped Estonia enormously in surviving the economic crisis and in starting a remarkable recovery as the country has no debt.

Consequently, the transition from the Soviet era Supreme Council to the Riigikogu was not only formal, but also substantial. The September elections of the new parliament heralded the beginning of a new time and signalled a decisive farewell to the Soviet past.

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