HELSINKI — Estonia’s center-right Reform Party is forming a coalition government with two parties. This will end a month-long political deadlock in the Baltic country.

After disputes over spending and welfare policy, Kallas was thrown out of the two-party coalition by the Center Party on June 3. This was in response to rising household costs and high inflation.

The Reform Party, a politically liberal party that advocates a conservative fiscal platform, announced late Friday that it had reached a coalition agreement with the Social Democrats and the small conservative Fatherland (“Isamaa”) parties.

Together, the three parties have a comfortable 56-seat majority in the 101-seat Riigikogu legislature. The arrangement, which will be finalized in the coming days, allows Kallas to avoid leading a minority government.

Postimees Estonia’s most popular newspaper reports that Kallas, 45, will be heading the new government. President Alar Karis is expected to appoint him by mid-July. The newspaper stated that Kallas must first be formally removed before being reappointed.

Estonia will hold a general election in March, so the new government won’t last long.

Karis stated that the new Cabinet needs to be prepared for Estonia’s economic woes as well as the consequences of Russia’s invasion.

“Estonia will soon have new ministers, who must quickly begin work to guide our people through inflation. And what lies ahead in autumn and winter with regard to energy prices,” Karis stated. He also said that Europe was in a security crisis because of Moscow’s war against Ukraine.

Estonia’s current inflation rate is the highest among the 19-nation Eurozone countries. In June 2012, it was 22%, according to Eurostat. Inflation in the Baltic nation with 1.3 million inhabitants is mainly due to high energy prices.


This story corrects Kaja Kallas age to 45.