​Systems of multilevel governance

Representation: Local interests are represented towards the central government via the Association of Estonian Cities and Municipalities (AECM), an association that was established as a result of the merger of the Association of Rural Municipalities of Estonia (AME) and the Association of Estonian Cities (AEC) in 2018. With a view to uniform representation of local authorities' interests vis-à-vis the central government, the AECM (previously the AEC and AME jointly) runs what is called the Local Government Associations Co-operation Assembly (LGACA).

Information: Local government associations have direct access with active user rights to the official electronic law drafting system. They can thus be informed and provide views on legislation as it is being drafted.

Consultation: The Rules of Procedure of the Government stipulate that prior to submission of a draft to the Government of the Republic or its signing by a minister, the draft shall be approved by other ministries and the Government Office and the concerned ministers. The draft shall also be approved by national associations of local governments if the draft concerns the general interests of local governments.

Consultations are carried out with both associations, and sometimes, according to need, with individual local authorities as well. If the Ministry sets up a working body, a consultation group, the association is sometimes asked to participate. If the Ministry has adopted 'Good Engagement Practices' procedure, the associations may be contacted in the early stages of the law making process. Associations maintain very good cooperation with the chancellor of justice, who is responsible for verifying the constitutionality of legislation.

According to article 65(3) of the Local Government Organisation Act, rural municipality and city councils and associations of local authorities have the right to submit proposals to the Government of the Republic for the passage or amendment of Acts and other legislation.

Paragraph 46 of the State Budget Act focuses on the relationship between the State budget and local government budgets. It specifies that 'representatives of the local governments and national associations of local governments and the representatives of the Government of the Republic shall conduct negotiations with the objective to agree on the following issues: 1) the amount and principles of receipt of transferable taxes; 2) the principles of distribution, conditions of use, principles of formation of amount, and the amounts of support specified in subsection (1) of this section for the budget strategy period and budgetary year; 3) the principles of covering the expenses of the state functions imposed on a local government by law; 4) the methodology of recording the information specified in clauses 1) and 2) of this subsection in the budget strategy and the draft state budget; 5) the measures for ensuring financial discipline and amount of surplus or deficit of the consolidated budget of a local government for the budget strategy period.' If no agreement is reached, the issue is decided by the Government during the process of establishing the state budget strategy or draft state budget. The agreement reached or the protocol of disagreements is added to the state budget strategy or the draft state budget. Since 1994, annual negotiations are held, initially concerning the grants of the Budget Equalisation Fund from the State to local government and since 2015 also on a wider set of issues listed above.

In addition, ministries have adopted 'Good Engagement Practices,' and in this framework the associations are consulted.

Coordination:

Estonia's EU policy is reflected in positions reached in the process of cooperation involving the Parliament (Riigikogu) and the citizens, the government and its officials, Estonia's local authorities and their associations. The corresponding principle, laid down in the strategy document 'Estonia's European Union Policy 2015-2019' and updated with the document 'Estonia's European Union Policy Priorities 2020-2021' (available only in Estonian), forms the basis for national association of local authorities such as the Association of Estonian Cities and Municipalities (AECM) to participate actively in this process. The AECM also plays an active role in representing local interests in European affairs.

The EU Secretariat, a subunit of the Government Office, is responsible for the overall coordination of European Union affairs in Estonia. The primary responsibilities of the EU Secretariat are:

• To support the Prime Minister in EU-related matters. On behalf of the Prime Minister, the EU Secretariat leads the preparation of Estonia's positions for the European Council. It also participates in the preparation of Government's positions in all councils, intergovernmental conference (IGC), and EU external affairs.
• To ensure effective inter-ministerial cooperation in EU affairs. As the line ministries are responsible for performing EU related tasks within their respective competencies, effective inter-ministerial coordination is necessary to ensure the coherence of Estonian EU policy.

Beside those main functions, the EU Secretariat has several additional tasks, such as informing the Commission about the transposition of EU legislation into national legislation.