Estonian Prime Minister Kaja Kallas has pulled the plug on her liberal Reform Party’s fractious coalition with the populist centre-left Centre Party, claiming that she needs to form a new government to handle the challenge of Russia’s invasion of Ukraine.

"At the present moment, more than ever, Estonia needs a functioning government based on common values. The security situation in Europe does not give me any opportunity as prime minister to continue cooperation with the Centre Party, which, against the backdrop of its internal division, is unable to put Estonia's interests above the interests of the party and its various wings," Kallas said.

Kallas, leader of the Reform Party, announced on the afternoon of June 3 that she had asked the president to dismiss the Centre Party ministers, and has made a proposal to opposition parties Isamaa and the Social Democratics to start coalition talks, according to BNS, a Baltic news wire service. The president has signed the request.

The 16-month Reform-Centre party coalition has been hampered by worse and worse squabbling over recent months, ahead of a general election scheduled for next March. The Centre party had repeatedly proposed measures, such as increased child support,  to help Estonians cope with the country’s cost of living crisis, which the free market Reform party saw as populist ploys to revive the Centre party’s flagging support.

There is also speculation that Kallas made a pre-emptive move amid rumours that the Centre party had been in talks with the radical rightwing Estonian Conservative People's Party (EKRE) to rebuild their own coalition, which broke up in January 2021.

Reform party’s support has also grown during the Ukraine crisis, boosted by Kallas’ strong stance against Russia, while Centre’s support has fallen amid the backlash against Russia because of the party’s onetime close links with Russian President Vladimir Putin’s United Russia party. A recent poll put Reform at 34%, double Centre's 17% support. Currently in the 101-seat parliament, Reform has 34 seats, Centre 26, EKRE 19, Ismaa 12 and the Social Democrats 10.

Kallas said that for her the last straw was when the bill on preschool education in the Estonian language, approved by the government by consensus, was rejected in parliament by the votes of the Centre Party and EKRE on June 1.

"I believed that February 24 [the invasion of Ukraine] and the genocide being perpetrated by Russia in Ukraine had opened the eyes of all the political parties in the Estonian parliament, the Riigikogu, to the importance for Estonia's independence of our common understanding of the dangers that we face as a country neighbouring Russia. Unfortunately, it turned out the day before yesterday that there are two parties in the Riigikogu that, even in the current situation, are unable to pull themselves together and stand up for the protection of our independence and constitutional values," she said.

Kallas said that the Estonian language was vital to securing the future of the Estonian people.

"We will secure this future not only by increasing military spending, but first and foremost by the unity of our people and the unwavering will to defend our independence. The prerequisite and mainstay of this is command of the Estonian language. In a situation where the Centre Party is actively working in the government against the fundamental values that are most important to Estonia, we cannot continue to cooperate with them anymore," she said. 

As well as the pre-school language issue, Kallas pointed to the fact that most of the ministers of the Centre party, which has traditionally had strong ethnic Russian support, do not have security clearance.

"If we add to this the fact that no minister of the Centre Party other than Kristian Jaani and Eva-Maria Liimets has permission to access Nato secrets, then it is not possible to rule the country with such a composition of the ministerial corps in time of war. That is why I formalised the state of affairs that has actually been in place for a long time and took proposals for the dismissal of the Centre Party ministers to Kadriorg [the presidential seat]," Kallas said.

Kallas will now try to form a new coalition with the opposition Social Democrat and centre-right Isamaa parties. "Estonia needs a stable government that can address the major challenges facing the country," the premier added.

Helir-Valdor Seeder, chairman of the Isamaa party – which is likely to hold the balance of power in any coalition – told Estonian daily Postimees that he was ready to negotiate. "Isamaa wants to participate in the process," Seeder said.

Juri Ratas, chairman of the Centre Party and parliamentary speaker, described Kallas’ decision as incomprehensible, saying it must be designed to divert attention from the problems affecting Estonian society. Estonia’s cost of living is soaring, with inflation hitting 20.1% in May, the highest figure in the EU.

"It is quite possible that with this move the Reform Party is trying to distract attention from the problems that plague Estonian society," he said. "If Kaja Kallas finds raising family allowances, lowering fuel excise duties and offering residents of Estonia relief from record high inflation not to her liking, she should say so publicly or even resign," Ratas said. "That would have been a fair and statesmanlike step, given the fact that the prime minister has herself repeatedly indicated that she would resign."

Appearing on the ETV politics discussion show Esimene studio, Ratas did not rule out rebuilding the coalition with the Reform party but insisted that "a new coalition must be formed. Estonia needs a functioning government, that much is clear."

Lauri Laanemets, chairman of the opposition Estonian Social Democratic Party (SDE), said he understood Kallas’ decision as the coalition has been unable to work together for several weeks already, while in the midst of the biggest security crisis since Estonia regained its independence and in the face of a looming cost of living crisis.

"For the Social Democrats, it is important that in the current security situation we have an Estonia-centred and pro-European government. I am of the opinion that Estonia must quickly get a functioning government that is not a government of doubters or a government of hesitators," he said.

If Reform is not able to form a government with the two smaller opposition parties, it is likely that Centre could try to rebuild its coalition with EKRE and Isamma, with which it was in government from 2019-2021.

According to Laanemets, preparations for this new coalition have been made actively over the past week. He said such restoration of such a coalition, especially in the current security situation, is a "real security threat to the Estonian state, its allied relations and also the economy". Martin Helme, EKRE leader, has accused the government of whipping up "hysteria" over the war.

According to President Alar Karis, the collapse of the coalition of the Reform Party and the Centre Party had been evident for some time.

"Today this coalition conclusively came to an end. We must now act quickly and must not lose time. Estonia urgently needs a capable coalition and a capable government able to make decisions and lead the country," he said.

"Times are turbulent both at home and abroad. Here in Europe, we are in the midst of the most acute security crisis in decades. We have unresolved energy security issues. Then there is the worsening of socio-economic problems, rising electricity, heating and gas bills that threaten the livelihoods of many. On top of all that, there is a lack of knowledge about where to find cover for rising budget expenditures," the president said.