Estonia, Legislation, Mergers and take-overs

According to the draft law, local municipalities have till June 30, 2014 for voluntary mergers. The government will start issuing merger recommendations to local municipalities that haven’t started a merger with another municipality by then. Although then also a public referendum will be held in the parish or town about merger, the merger will eventually be decided upon with government decree.

The bill determines the basis and order of implementing the local municipalities reform, deadlines, lists regional centres around which the mergers should take place, and general principles, rights and obligations accompanying the change of administrative territorial order.

The ministry said that they wish to include in the discussion of the bill as many of the people whom the reform would affect.

It is not yet certain if the government would support the bill. Just two weeks ago, prime minister, Reform Party chairman Andrus Ansip ruled out the possibility of administrative reform based on regional centres resulting in forced merger of municipalities. "As liberals, the Reform Party members support voluntary merger. We are certainly not ready to support forced merger of local municipalities," Ansip said in the Riigikogu information two weeks ago.

Regional minister Siim Valmar Kiisler thinks that no changes will take place unless is some force applied. "When I became the regional affairs minister in January 2008, I supported voluntary merger but after I had worked for six months, I realised that when everything is voluntary, then everything stays the way it is today," Kiisler said in an interview to the Monday issue of Eesti Päevaleht. "The logic of the whole new bill is to be as voluntary as possible," he said.

As the result of the reform, local municpalities with at least 5,000 inhabitants will be formed and every parish that thus emerges, should contain at least one regional centre listed in the bill. The regional centres were chosen in cooperation with local municipality unions and county governors and there are around 60 of them across Estonia.

After the local municipalities reform is completed, the position of the regional affairs minister will disappear from January 1, 2018.