FES BRIEFING ESTONIA Trade Union Monitor February 2023 POLITICAL, ECONOMIC AND SOCIAL FRAMEWORK mely withdrawals from the labour market. A corresponding amendment to the law was passed on 8 February 2023. POLITICAL CONTEXT Political developments in Estonia in 2022 and early 2023 we­re defined by three major factors. First, the Russian aggressi­on against Ukraine has had a significant impact on the eco­nomies of EU countries, including Estonia. On one hand, the war has resulted in substantial rises in energy prices, as well as consumer prices in general. At the same time, an embar­go on imports of a variety of raw materials from Russia has led to a drop in manufacturing. Second, a new government coalition composed of the Reform Party, the Pro Patria Party (Isamaa) and the Social Democratic Party(SDE) was formed and took office on 18 July 2022. Third, preparations are un­derway for the elections of the Riigikogu(parliament), sche­duled for the first weekend of March 2023. The high-level tripartite social dialogue on labour and social policy issues, with the participation of the government, trade unions and employers, is mentioned in the coalition treaty of 15 July 2023 as follows:“We will continue with high-level tri­lateral negotiations with the Estonian Trade Union Confe­deration and the Estonian Employers’ Confederation in mat­ters concerning the labour market.” Nevertheless, just two tripartite meetings took place during the reporting period. The first discussed the situation of refugees from Ukraine and measures to support their integration into Estonia’s labour market(April 2022), while another focused on the EU green transition, issues related to social protection and ways of im­proving the working population’s health(October 2022). It is worth mentioning that the tripartite goodwill agreement on the reform of old-age pension schemes under favourable conditions was signed by the Ministry of Social Affairs(Mo­SA), and trade union and employer confederations on 2 May 2022. The document approved major steps to be taken in the long term(2031–2036 and, exceptionally for the oil shale in­dustry, until 2050) to reform old-age pensions in order to im­prove the sustainability of the scheme and to prevent unti­Union and employer representatives signed another triparti­te agreement with the MoSA on increasing the flexibility of the working time regulation for certain activities and profes­sional groups, on 17 October 2022. Changes to the working time regulation became law in November 2022. The parliament adopted several amendments to the Emplo­yment Contracts Act. The liability of the lead contractor for the subcontractors’ obligation to pay wages to employees was enacted in October 2022. According to the amend­ments to the Unemployment Insurance Act, adopted in December 2022, the eligibility period to receive unemploy­ment insurance benefits will be linked to the level of registe­red unemployment. Thus unemployment insurance benefits could be granted for a certain period, extended to 60 or 120 days according to the special formula that considers increa­ses in unemployment compared with the reference period. This amendment will take effect from 1 July 2023. ECONOMIC AND SOCIAL SITUATION The Estonian economy has so far performed better than average. Despite the rapid rise in the cost of living, demand remained strong in 2022. But a substantial drop in consumer confidence became evident in falling consumption starting from January 2023. High inflation is now increasingly affecting economic growth. Increased general government spending will be the main factor that lifts growth to 0.4 per cent in 2023 after its 0.5 per cent decline in 2022. The last quarter-on-quarter growth was seen in the fourth quarter of 2021. After reaching 19.4 per cent in 2022, inflation is expected to fall to 9.3 per cent this year, while energy prices remain con­sistently high. Purchasing power decreased by 9 per cent in 2022. Purchasing power as well as demand in both Estonia’s 1