Analytics, Employment, Estonia

According to information that has been leaked into media, the Reform Party and PRU intend to initiate coalition negotiations with the People's Union on Friday already.

The three coalition parties have been arguing for a while already about the Labour Contract act and new unemployment compensations that will enter into force from July 1 and on Friday, party chairmen Andrus Ansip, Mart Laar and Jüri Pihl held a meeting in order to achieve an agreement, but failed to do so.

The Reform Party leadership convened at 15 o'clock on Friday to discuss the political situation as well as options for cutting the State budget.

The Social Democrats do not want to agree with the Reform Party and PRU planning to abruptly cut the unemployment compensations that would enter into force while maintaining the provisions in the Labour Contract Act that would facilitate making employees redundant. Social Democrats would prefer raising the unemployment insurance tax rate to 4% instead of previously agreed 3% – that would provide the Unemployment Insurance Fund with more resources for paying compensations. The other two parties, however, rigidly oppose the tax surge.