Estonia is holding its first election as a eurozone member, with the centre-right government hoping for an unprecedented second term for steering one of Europe’s most depressed economies back to growth.
The Baltic country of 1.3 million became the 17th nation to adopt the euro on January 1 after enduring its deepest recession since regaining independence from the Soviet Union in 1991.
Economic output plunged a staggering 14% in 2009, leaving one in five workers without a job. Fuelled by strong exports, growth has returned and the jobless rate has dropped, but at 14% it is still among the highest in the European Union.
Unlike Irish voters, who punished their government last month for their own boom-to-bust experience, Estonians appear to be have retained confidence in the two-party coalition of prime minister Andrus Ansip.
Recent polls suggest his centre-right Reform Party and its more conservative partner, known by its Estonian initials IRL, could win more than half of the votes and secure a majority in the 101-seat parliament. Currently they govern in a minority with 50 seats.
That would be a first in Estonia, where no government before Mr Ansip’s has served a full term since Western-style democracy was introduced following five decades of Soviet occupation.
“This has brought us political stability,” Mr Ansip, 54, told reporters on Thursday.
Mr Ansip has won approval both in European capitals and at home for his handling of the economic crisis, which ended years of roaring growth as a housing bubble popped and the global financial meltdown sapped all hopes of a quick recovery. His government introduced tough austerity measures to bring down the deficit – it is now among the lowest in the 27-nation EU – and keep Estonia’s euro hopes on track.
The eurozone entry, capping a two-decade-long effort of closer integration with the West, was a strong boost for the government, even though it occurred in the midst of a European debt crisis.
The most likely outcome is that Mr Ansip’s Reform Party and IRL remain in power, possibly with the support of the Social Democrats, the only centre-right party that wants to scrap Estonia’s flat-tax system for progressive taxation.