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Estonia Set for New Coalition Including Controversial Populists

Estonia Set for New Coalition Including Controversial Populists

(Bloomberg) -- Estonia moved toward a new governing coalition that includes a controversial anti-immigrant party, signaling the further spread of populism in the European Union.

Prime Minister Juri Ratas’s ruling Center Party, which snubbed the election-winning Reform party and instead invited the euroskeptic EKRE to talks, overcame opposition from his party’s Russian-speaking members to agree on an alliance that also includes the conservative Isamaa, a junior member of the outgoing government.

The move risks further eroding unity inside the world’s largest trading bloc, where the rise of nationalist politicians has prompted clashes on issues from migration to democratic standards. The Estonian coalition, which would control 57 of parliament’s 100 seats, still needs a formal mandate from President Kersti Kaljulaid, who on Friday gave Reform the first stab at forming a government.

Under the agreement, approved by the three parties’ councils on Saturday, the coalition will conduct "an independent and consistent foreign and security policy based on EU and NATO membership.” It will also push ahead with a partial revamp of the pension system that the central bank has called “a very negative step,” and pledged to make support for the high-speed Rail Baltica link contingent on the level of EU aid.

Center and Reform had previously pledged to shun EKRE, which came third in last month’s parliamentary elections and more than doubled its support by railing against immigrants. EKRE has compared the EU to the Soviet Union and vowed to claw back sovereignty. Its ministerial portfolios also include the finance minister’s position, under the agreement.

Reform’s Kaja Kallas, who by law has 14 days to form a coalition, said on Friday she’d present her plan to the parliament on April 15, and will try to win over Center and Isamaa lawmakers to back the agreement she expects to clinch with the Social Democrats. Even as one Center lawmaker has already defected, citing opposition to co-opting EKRE, Kallas herself told public broadcaster ERR she doesn’t believe she’ll become the premier.

To contact the reporter on this story: Ott Ummelas in Tallinn at oummelas@bloomberg.net

To contact the editors responsible for this story: Andrea Dudik at adudik@bloomberg.net, Nicholas Larkin, James Amott

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