Sunday's election outcome in Estonia could mean a shift to the right for the former Soviet country.
Prime Minister Andrus Ansip said he will re-examine his coalition government today and could dump his centre-left partner in favour of the nationalist Pro Patria-Res Publica bloc.
Voters gave Mr Ansip's Reform Party 12 new seats in the 101-seat parliament, upping its count to 31. That is two seats more than the left-leaning Centre Party which has been part of a coalition with Mr Ansip and a third party, the People's Union.
Prime Minister Ansip now wants a coalition that is a better fit with his neo-liberal platform.
Policies like a 0% corporate tax rate for re-invested income earned him praise late last year from visiting US President George W Bush.
Pro Patria, which won an unexpected 19 seats this weekend, would help shift Estonia's ruling government to the right. Market analysts say the new coalition could also move up Estonia's timetable to adopting the Euro currency.
'If a coalition with right-wing domination is formed, the outlook for euro adoption is expected to improve and most probably 2010 set as a target', said Kristel Kivinurm-Priisalm, head of asset management at the Trigon Capital investment group.
Some economists, however, believe Mr Ansip's tax cuts have helped overheat Estonia's economy. High inflation, 5.1% in January, is one of the key reasons why Estonia did not enter the Eurozone this year as planned.
A Reform Party spokeswoman said the party would set up a coalition negotiating team on Wednesday.
This was the first national parliamentary election in the world that allowed voting via the Internet. More then 30,000 votes were cast online and the overall turnout rose to 61%.
