Estonia's PM resigns over corruption scandal in his party

Estonia's Prime Minister Juri Ratas arrives for an EU summit at the European Council building in Brussels, Thursday, Oct. 15, 2020. (Olivier Hoslet, Pool via AP)

HELSINKI — Estonia's prime minister resigned Wednesday over a corruption scandal involving a key official of his Center Party suspected of accepting a private donation for the party in exchange for a political favour on a real estate deal, prompting new talks on forming a new ruling coalition.

The resignation of Prime Minister Juri Ratas, who is also the Center Party's leader, automatically triggers the resignation of Estonia's three-party coalition government, but doesn't automatically mean a new election.

Ratas said early Wednesday on his Facebook page that he would step down as "the suspicion expressed by the Public Prosecutor's Office .... does not mean that someone is definitely guilty but they will inevitably cast a serious shadow over all those involved."

"In such a situation, it seems only right that, by resigning myself, I will give the opportunity to shed light on all the facts and come to clarity," Ratas wrote on Facebook.

Ratas said he personally hasn't done anything wrong.

"Despite taking political responsibility, I can say with all my heart that, as prime minister, I have not made any malicious or deliberately wrong decisions," he wrote on Facebook.

After Ratas' announcement, parties immediately started talks on cobbling together a new government. Estonian President Kersti Kaljulaid said she would propose that Kaja Kallas, chairwoman of the main opposition, centre-right Reform Party, which emerged as the winner of the 2019 general election, to form the new Cabinet.

Ratas has led a majority coalition of his left-leaning Center Party, the nationalist EKRE party and the conservative Fatherland party since April 2019. He has held the post of prime minister of the Baltic country of 1.3 million since November 2016.

There are currently five political parties represented at Estonia's 101-seat Riigikogu legislature, or Parliament.

Only a limited number of combinations exist for a majority coalition, particularly as the Reform Party has ruled out co-operation with the populist EKRE, Estonia's third-largest party, which runs largely on an anti-immigration and anti-European Union agenda.

On Tuesday, Estonia's security police said it was investigating the offices of state credit agency KredEx over suspicions of corruption regarding a 39 million-euro ($48 million) loan granted to the Porto Franco real estate complex in the harbour district of the capital, Tallinn.

The Public Prosecutor's Office said separately it suspected the Center Party and five people of criminal involvement in the Porto Franco real estate case including party secretary Mihhail Korb, real estate businessman Hillar Teder and Kersti Kraht, an advisor to the country's finance minister. Korb announced his resignation late Tuesday.

As the largest political party in Tallinn, the Center Party controls the office of mayor and has final say over how to develop public infrastructure projects such as roads and transport in the capital. Estonian media reported that Tallinn Mayor Mihhail Kolvart has been questioned in the case but isn't suspected of any wrongdoing.

Teder, whose son Rauno Teder is the main shareholder in Porto Franco, is suspected of cutting a deal with Korb on facilitating access routes to the Porto Franco estate in the harbour district in return for a one million-euro donation to Center. In 2015, Hillar Teder was a suspect in a corruption case case involving former Tallinn Mayor and Center Party leader Edgar Savisaar.

Ratas insisted the real estate project has had no influence in government decision making.

Estonia is a member of the European Union and NATO since 2004.