Estonian Prime Minister Kaja Kallas, who scored a resounding reelection victory last month, is coming under pressure as critics say she broke a promise not to raise taxes.
(Bloomberg) — Estonian Prime Minister Kaja Kallas, who scored a resounding reelection victory last month, is coming under pressure as critics say she broke a promise not to raise taxes.
The premier met a clutch of protesters led by her predecessor, Juri Ratas, as she arrived for the first meeting of her new government in Tallinn on Thursday. Kallas’s Reform Party dropped 2 percentage points to 24%, according to a Norstat poll published Tuesday, after unveiling an increase in income and sales taxes this month.
Her party was a champion of fiscal austerity after the 2008 global financial crisis as the nation sought to join Europe’s single currency. Kallas has similarly styled herself a fiscal hawk, including in the run-up to the March 5 election.
“Read my lips: taxes will not rise. Period,” she told parliament in October, parroting a famous line from former President George H. W. Bush. Bush served one term as US leader. His 1992 defeat by Bill Clinton was attributed by many to his break with the tax pledge.
Also echoing the 41st US president, Kallas said Thursday she had to make unpopular decisions to bring to heel a budget deficit that stands at 4.3% of gross domestic product and has prompted unease at the country’s central bank as well as Fitch Ratings.
In the shadow of the war in Ukraine, Kallas cited Estonia’s ambition to ramp up defense spending to 3% of GDP.
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