Estonia's parliament voted on Wednesday in favour of Prime Minister Kaja Kallas staying in office following last month's election, giving a nod to her plans to raise taxes and defence spending in the face of perceived threats from neighbour Russia.
"The ongoing war in Ukraine and Russia's desire to destroy the existing European security principles will for the next few years put Estonia in the most difficult security situation since World War Two," Kallas' new three-party coalition said.
The prime minister's liberal Reform party won the March general election and agreed on a coalition with another liberal party, Estonia 200, and the centre-left Social Democrat Party, commanding in total 60 of 101 votes in parliament.
Estonian defence spending will increase to 3% of gross domestic product (GDP) by 2027 from 2.85% in 2023, and value added tax and the income tax will rise by two percentage points to balance the budget, the coalition said.
(Reporting by Andrius Sytas, editing by Terje Solsvik)
