Estonia’s Prime Minister Kallas remains in office and promises higher defense spending

TALLINN (Reuters) – Estonia’s parliament on Wednesday voted to keep Prime Minister Kaja Kallas in power after last month’s elections, a nod to her plans to increase taxes and defense spending amid perceived threats from neighboring Russia.

“The ongoing war in Ukraine and Russia’s desire to destroy existing European security principles will, in the coming years, put Estonia in its most difficult security situation since World War II,” Kallas’ new three-party coalition said.

The prime minister’s liberal Reform Party won the general election in March, agreeing to form a coalition with another liberal party, Estonia 200, and the centre-left Social Democrats party, which won a total of 60 out of 101 votes in parliament.

Estonia’s defense spending will increase to 3% of gross domestic product (GDP) by 2027 from 2.85% in 2023, and VAT and personal income tax will increase by two percentage points to balance the budget, the coalition said.

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(Reporting by Andrius Sytas, editing by Terje Solsvik)

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