Estonia's Prime Minister Kaja Kallas won a mandate from MPs at an extraordinary sitting of the country's parliament, the Riigikogu, on Friday.
MPs voted by a margin of 52-26 to give Kallas and her centre-right Reform Party the opportunity to form a new three-party coalition government with the Social Democrats and the small, conservative Isamaa, or Fatherland, party.
Kallas must now present her new government to Estonia's President Alar Karis.
"This parliament has turned out to be relatively difficult for forming a government," said Professor Leif Kalev from Tallinn University.
"We have five parties in parliament and now almost all coalition combinations have been tried. Basically, we have just eight months until the election so I think probably this government will survive until then," he told Euronews.
The three parties together muster a comfortable 56-seat majority at the 101-seat Riigikogu legislature. The coalition arrangement prevents Kallas, who became Estonia’s first female prime minister in January 2021, from having to govern with a one-party minority Cabinet.
Kaja Kallas handed in her government's resignation on Thursday, after a month of political stalemate in the nation of 1.3 million people.
The Reform Party had been running Estonia as a minority government since Kallas kicked out the left-leaning Centre Party from their two-party coalition in June. The parties had substantial differences over spending and welfare policies amid increasing Estonian household costs because of high inflation.
"The Centre Party was previously the minor partner and they proposed some measures to address the cost of living crisis and rising inflation, but the Reform Party didn't want to go forward with them and the government fell,"
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