Signing Letter of Guarantee Was Foolish, Kallas Says ({{commentsTotal}})

Siim Kallas
Siim Kallas Source: Photo: Postimees/Scanpix

Siim Kallas, the European Commissioner for Transport who is considered the likely next prime minister, admitted signing a letter of guarantee for a vast sum 20 years ago, when he was the head of the Bank of Estonia, calling it a "foolish" thing to do.

“It probably went like this - and this had happened before - that we made a sample of what a deal should look like. Whether it was written by one of our employees or someone from over there, is a different matter and impossible to determine now,” Kallas told the daily Eesti Päevaleht that broke the story about a week ago.

Documents acquired by daily Eesti Päevaleht revealed that when Siim Kallas led the Bank of Estonia in the beginning of the 1990s, over one billion kroons (over 80 million euros) worth of financial guarantees were issued. Kallas initially denied giving guarantees.

“I probably signed it, which was foolish and thoughtless. Even though I knew perfectly well that it won’t cost anything because this piece of paper wouldn’t get the money moving,” he now told Eesti Päevaleht in an interview.

According to Kallas, the document was drafted when an idea was floated to create a reserve for supporting banks. Kallas said he never thought he was signing a valid document. 

Although the guarantees were valid until 2004, the bank accounts have no record of it.

Mart Laar, the chairman of the supervisory board of the Bank of Estonia, said an investigation into the giant guarantee has been launched.

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