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Estonian PM submits resignation: President`s spokesman

Last Updated: Tuesday, March 4, 2014 - 18:54

Tallin: Estonia`s three-term Prime Minister Andrus Ansip submitted his resignation on Tuesday in a long-planned move to pave the way for his successor to lead a new government into a general election next year.

Ansip announced last month he would resign, along with his cabinet, and his Reform Party has picked Siim Kallis, a vice-president of the European Commission, to form a new coalition if he is nominated by the country`s president.

A spokesman for Estonian PresidentToomas Hendrik Ilves told Reuters that Ansip had submitted his resignation. The president has 14 days to formally nominate a new candidate for prime minister who will then nominate a cabinet.

Under Ansip, Estonia`s longest-serving prime minister who has held office since 2005, the small Baltic country has been praised by analysts as a model of northern European austerity pitted against crisis-hit southern Europe.

Ansip`s government stayed in place in 2011 elections even after the country`s economic output had fallen by 14 percent in 2009 due to the global financial crisis and the collapse of a real estate price bubble fueled by cheap and easy credit from Nordic banks.

But Ansip`s centre-right coalition has been struggling in polls amid signs of voter fatigue at years of a government focused on fiscal austerity as well as several high profile party funding scandals. The centre-left opposition has been gaining popularity.

A key policy difference between the current ruling coalition and the centre-left opposition is over Estonia`s flat 21 percent personal income tax, to be reduced to 20 percent in 2015.

The opposition parties would like to move towards a progressive tax policy with higher rates for higher earners, as applied by most developed countries.

First Published: Tuesday, March 4, 2014 - 18:54
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