All laws must be approved by the Riigikogu before entering into force. The right to initiate a law belongs to Riigikogu members, fractions, committees, and the government. A majority of the significant drafts discussed in the Riigikogu comes from government officials, while a smaller proportion is prepared by parties via their Riigikogu fractions. Although commissions or Riigikogu members personally are entitled to present drafts, this happens only rarely.

Drafts presented by the government have usually been discussed beforehand by the state political leadership, and a decision is therefore usually reached more quickly in these cases. Only rarely would the Riigikogu reject a draft that has already been approved by the government. The open meetings of the Riigikogu offer members an opportunity to voice their opinions. This guarantees that those who present a draft must publicly defend it in the Riigikogu.

The future of a draft also rests with the Riigikogu — its legislative passage can either be suspended altogether, approved or rejected. Most of the essential work in preparing a draft is done in the standing committees of the Riigikogu, of which there are 10 in total. The most important of these are the Finance, Legal and Constitutional committees. In accordance with the decisions of the Board of the Riigikogu, further decisions about each draft in parliament depend on one of the standing committees. The committee examines motions to amend, suggests when to discuss the drafts, and whether and when to submit the draft to its final reading.

At the final reading, the draft is approved by a simple majority vote — more Riigikogu members have to be in favour than against. The regular sessions of the Riigikogu have no rule regarding quorum, i.e. the right to decide does not depend on the number of deputies present. At extraordinary sessions, however, over half of the Riigikogu members must be present.

One of the most significant discussion topics that gives rise to serious political intrigues is the state budget, which has to be passed as a law every year. The sole right to draft a budget belongs to the government, whose work is co-ordinated by the Ministry of Finance. The legislative passage of the budget through the Riigikogu is supervised by the Finance Committee. Throughout the history of Estonian parliamentarianism, problems connected with the state budget have always raised the most intense political debate, and the Finance Committee is frequently faced with the task of going through hundreds of amendments presented by Riigikogu members. The budget must reach the Riigikogu three months before the start of a new financial year (i.e. by 1 October at the latest). The Riigikogu has to pass it by 1 March of the financial year at the latest, otherwise extraordinary Riigikogu elections will be announced, and the state will function on the basis of the previous year’s budget.

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