Estonia's Prime Minister Kaja Kallas steps down to become EU's top diplomat

HELSINKI -- Estonia’s Prime Minister Kaja Kallas has stepped down as the leader of the Baltic country to become the foreign policy chief of the European Union later this year.

Kallas, Estonia’s first female prime minister, handed in her formal resignation to President Alar Karis during a brief meeting at the Presidential Palace in the capital, Tallinn, on Monday.

Estonia under Kallas, 47, has been one of Europe’s most vocal backers of Ukraine following the full-scale Russian invasion in February 2022. She replaces Josep Borrell of Spain, who has served as the EU foreign policy chief since 2019.

Summing up Kallas’ 3 1/2 years at the helm of the nation of 1.3 million, Karis said in a statement that “it has been a time full of crises, the milestones (such as) the coronavirus, the economic recession and the war in Europe, when Russia destroyed our previous security picture with its aggression in Ukraine”.

The prime minister’s move automatically triggered the resignation of Kallas’ three-party coalition Cabinet, made up of her center-right Reform Party, the Social Democratic Party and the liberal Estonia 200 party. It will continue as a caretaker government until the new Cabinet is sworn in, most likely in early August.

In the last meeting of the outgoing Cabinet on Monday, Kallas underscored her government’s efforts to boost the security of Estonia, a NATO member that neighbors Russia.

“We have invested more in national defense than ever before and increased the annual defense budget to 1.4 billion euros (about $1.5 billion), which is 3% of GDP,” Kallas said, adding that in the past two years, the state defense budget has increased by nearly 70%. “These decisions help to ensure that Estonia is firmly protected and a safe place to live.”

The Reform Party announced on June 29 that it chose party veteran and Climate Minister Kristen Michal as the prime minister candidate to replace Kallas who represented Estonia at a NATO summit in Washington last week. Under Kallas' leadership, Reform scored an overwhelming victory in the 2023 general election and holds a mandate to the prime minister post.

The Cabinet's composition is likely to remain the same but Michal, who is set to succeed Kallas also as the Reform Party's chair, is currently holding talks with both the Social Democrats and the Estonia 200 to revise the current 4-year government program the three parties had originally agreed last year.

Michal’s nomination for Estonia's top job will have to be approved by Karis and the 101-seat parliament, or Riigikogu, where the coalition holds a comfortable majority. He has been serving as the minister for climate affairs since April last year. The 49-year-old former economics and justice minister has been active in the Reform Party, Estonia’s key political establishment, since the late 1990s.

Michal is known for a long and acclaimed political career focused on Estonia’s internal affairs but lacks international experience — almost the complete opposite of Kallas who has excelled in international arenas but was clearly out of her comfort zone when it came to domestic politics, leading to a major dip in her popularity among Estonians over the past year.