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Estonian PM eyes new term with far-right gains to cloud coalition-building

TALLINN (Reuters) - Estonians head to the polls on Sunday with incumbent centre-left Prime Minister Juri Ratas the frontrunner, although he would face a difficult task forging a parliament majority due to expected far-right gains.

FILE PHOTO: Estonia's Prime Minister Juri Ratas attends a summit between Arab league and European Union member states, in the Red Sea resort of Sharm el-Sheikh, Egypt, February 25, 2019. REUTERS/Mohamed Abd El Ghany

The far-right EKRE is seen more than doubling its vote, pushing a nationalist agenda.

Estonia enjoys strong economic growth and low unemployment, but regional differences in the country of just 1.3 million people are vast.

EKRE’s heartland are the counties furthest from the capital where its promise to shake up politics has resonated with many voters. A fiercely anti-immigrant message lifted its support during the European migration crisis in 2015 and opinion polls suggest it has held on to the gains since then.

A lot of their supporters are like 52-year-old entrepreneur Mati Vaartnou, from the island of Saaremaa, far from the capital. “An increasing number of people understand that the current parties will not change anything,” he said.

EKRE’s increased support, part of the rise of far-right populist parties across much of Europe, means building a strong coalition in the fragmented parliament will be difficult as all other parties have ruled out governing with EKRE.

“I am sure that there will be an effort to find any other combination to form a government, just as long as we are not in it,” Martin Helme, one of EKRE’s leaders, sitting in his office in front of a map of Estonia before Moscow’s 1940 occupation.

EKRE’s success could lead to a coalition of Estonia’s main rivals - Ratas’ traditionally pro-Russian Centre and pro-Western Reform – which have not governed together since 2003.

An opinion poll by public broadcaster ERR showed Centre, whose core supporters are Estonia’s Russian-speakers and which has a co-operation pact with Russian President Vladimir Putin’s United Russia, would remain biggest with 28 percent of votes.

Reform polled at 24 percent and EKRE at 17 percent while Ratas’ current coalition partners, the Social Democrats and the conservative Fatherland, stood at around 10 percent each.

Estonia hit the headlines last year for one of the largest money laundering scandals, with Danish lender Danske Bank saying its Estonian branch helped funnel money from Russia and other ex-Soviet states.

While Danske Bank has acknowledged that its money laundering controls in Estonia have been insufficient, the scandal has not become central to the election campaign, with voters more focussed on economic and cultural issues.

Centre sparked protests over plans to close the only Estonian-language high school in Kohtla-Jarve, a mostly Russian-speaking town near the Russian border.

And Ratas’ push to reform taxation, including hiking excise duties, has also angered Estonians, prompting people to head south to neighbouring Latvia to buy cheaper alcohol.

“Estonian people are not like the French who burn cars in the streets,” Reform leader Kaja Kallas told Reuters. “They just show their protest by not playing that game - they just go to Latvia to buy beers for the sauna.”

Reporting by Tarmo Virki, additional reporting by John O’Donnell; Editing by Alison Williams