Karu: While we might exit the emergency situation, the crisis will linger

Kaimar Karu.
Kaimar Karu. Source: Siim Lõvi /ERR

Former Minister of Foreign Trade and IT Kaimar Karu, who has been removed from office by the leaders of the Conservative People's Party of Estonia (EKRE), did not expect it to happen in the midst of the emergency situation and a double crisis.

Karu, an IT specialist with no previous political experience, stepped into the position in November. He disagreed with the party on a number of issues including changes to the Aliens Act which regulates migration. Party chairman Mart Helme told him he was being recalled from office on Friday. He was not a member of the EKRE, or any other party, which become a contentious issue with other members of the EKRE. Karu has been replaced by Raul Siem, a former advisor to Mart Helme.

In a long interview with ERR's Toomas Sildam, conducted on Monday while Karu was still in office, he talks about when Estonia might exit the crisis. This crisis cannot be put in a box and filed away. It will forever remain in our economy, our lives and we will learn to live with it, he believes.

What would you recommend to an acquaintance from the private sector who has been extended an invitation to become minister – take the offer or reject it?

They should accept. Knowing that it's temporary. However, I believe the job would be much easier if the entrepreneur had already tied themselves to the inviting party. It makes life easier.

"It is a political position for realizing political agenda. Every significant position needs to be taken for everything it's got," EKRE deputy chair, Minister of Finance Martin Helme said. How would you translate this message?

I suppose I have been translating it for the past five and a half months. Of course, it's a political position and, of course, it needs to be taken for everything it offers. Every position and role should be made maximum use of. Why do something if you do not plan to do it all the way.

The relevant question is what those efforts are aimed at.

My starting point was two-pronged right from the beginning. That I will act based on the coalition agreement. And the answer to the question of what I want to achieve is simple: to do as much good as possible. That is what capitalizing on my role meant to me.

How often did you think in those five and half months that you made a mistake and should have remained with your consultancy firm in London?

Not once. Even after last Friday (which is when Mart Helme informed Karu of his removal – ed).

Are you now convinced that it is impossible to be an apolitical specialist minister who is not a member of the party?

I'm not sure there is such a rule as Estonia has had specialist ministers who were not party members in the past. I do not think it's impossible.

I might not amplify the party's every message [as minister], but can I work without clashing with them? It seemed possible to me. While it has now turned out it was not enough.

What could EKRE not squeeze out of the foreign trade and IT portfolio during your time in office?

I don't know the answer. I do not know what they failed to achieve because I was minister.

You received a call from EKRE chairman Mart Helme at 8.20 a.m. on Friday, April 17 to tell you that he will make a proposal to the PM for your removal from office based on unsuccessful cooperation with EKRE. I'm sure you suspected this might happen?

I suspected such a situation could arrive one day. That for various reasons a conversation could take place – I'm not sure I was waiting for a call – and we would part ways.

Was I prepared for such a call? Yes.

Whether I still thought that after the call? Not so much, because I did not expect that call in the middle of the emergency situation.

That is what has caused me the most concern, given me a headache and baffled me since Friday morning. Of course, a sensible agreement for exiting a situation where cooperation is unsuccessful can be made, but for it to happen during the emergency situation when everyone should be focused on solving it… I don't know.

The incoming minister, recent adviser to Mart Helme, EKRE politician Raul Siem said that Mart Helme asked him to serve as foreign trade minister two weeks ago. Helme said nothing to you back then?

I first learned of the plan on Friday [April 17].

That is not being fair to one's people.

(Sighs). Different leaders, different styles. Different convictions.

Kaimar Karu. Source: Siim Lõvi/ERR

"He is not a conservative, he's a liberal," Mart Helme sighed on his Sunday talk show when talking about to you. Did it really take EKRE leaders over five months to realize that?

(Laughs) Listening to and reading different opinions [from EKRE], it took fewer than five months. It is likely they gave up [on me] some time ago.

How long did it take them to realize I was unsuitable? It is difficult for me to comment on.

I would, however, comment on the "conservative versus liberal" topic. I understand the allure of labeling people good and bad, black and white. But it doesn't work. Allow me to give just one example. Basic income has been discussed in many countries, including Estonia, during the emergency. It has been promoted rather by people sporting a more liberal ideology, socialists even we might even say. But if we look at EKRE supporters, we have also seen proposals for basic exemption from that camp for which it should be a different world entirely.

Some people who know EKRE said the breaking point came in January when you failed to coordinate the Ministry of Internal Affairs' amendments to the Aliens Act prohibiting foreign students from working for more than 16 hours a week and their children from living in Estonia during their parents' studies. You did remember at the time that Mart Helme was EKRE chairman?

I did.

The document was not of high priority for me. Bills move between ministries for coordination all the time. Even if I understand where certain proposals are coming from, I'm under no obligation to agree on ways for hitting those targets. The idea of coordination between ministries is to come up with tools for achieving long-term goals. Without feedback from other ministries on whether measures are considered expedient, what would be the point of coordination rounds?

You did not realize the reaction such a decision might spark?

At the time, I did not believe an ordinary coordination round between ministries would blow up to become such an… incident.

Are you a member of the so-called Party of Officials as put by EKRE members in recent days?

It is an interesting construct – Party of Officials. I believe we need to work with specialists. Experts from outside ministries and from within – people who have spent a long time concentrating on certain topics, who can pick up on nuances. The role of ministers is to notice universal patterns and pick up on faint signals.

If you have a single topic but five commentators and ten opinions, you need to be able to see the roots of different viewpoints and return to the beginning – why are we doing this? A lot of conflicts, not just in politics, are created because people are concentrating on the how instead of the why of it all.

Can you say whether hostility toward strangers is a sincere conviction of EKRE leaders, an act or carefully considered flirting with voters?

This would require me to interpret what is going on in people's heads. (Pauses) I would rather not.

Could Estonia do without foreign labor in all walks of life?

The short answer is no.

The longer answer is that it depends on the field and the purpose of using foreign labor.

Estonia has a lot of jobs and roles where salaries have traditionally been modest and where the cheapest labor is used that often comes from outside the country. On the one hand, I believe such attitudes are not sensible as we should be moving toward not having to rely on cheap labor.

Can we make progress to that effect in the next five to ten years? Yes, and we need to.

On the other hand, these changes will not happen overnight as our farmers are in a more complicated situation than many of their European counterparts. Climate, subsidies etc. mean that it is often more expensive to produce things here. And if we were to hire people and pay them market salary, our prices would be so high that perhaps no one would buy our goods, companies would be forced to close shop and we would just have more unemployed people.

Regarding other fields… If we want to be strong in international competition, we need to make use of international experience and know-how. It is good to have people from other countries working high-value-added jobs as it provides us with know-how and income in the form of labor taxes.

I see high-paying jobs filled by foreigners as a competitive edge for Estonia – when a person who could work anywhere in the world chooses to come to Estonia and integrate into our society, it is a bonus. Of course, when someone comes for a year just to write their thesis, we cannot expect them to learn Estonian. But we will still benefit from their presence.

Kaimar Karu. Source: Siim Lõvi /ERR

Did you hope the PM could still change something after you received the call to tell you that you were fired on Friday?

The question of what would happen now and who would have to decide what did cross my mind. Also, in terms of whether the PM could interfere. What would happen were the PM to tell EKRE to make it work until the end of the emergency situation?

The prime minister could have given Helme the green light but said that you don't replace ministers in the middle of a crisis and that the matter would be discussed once the emergency situation ends.

That could have been one possible reaction. I cannot comment on why he chose not to react this way or what were his considerations.

The situation is complicated as it is due to the emergency situation and the spread of the virus. What would be the safest decision? I don't know.

What did Ratas say when he called you after Helme on Friday?

We talked about Helme's phone call and the next steps. He listened to what I had to say. It was a report, a description of the situation.

What were the next steps supposed to be?

I was given the day to decide whether I wanted to file my resignation that the PM would take to the president or whether he would go straight to Kadriorg with a document of his own. Those were the two options I was given [by Mart Helme] in the morning. I said I'd think about it and call the PM.

When I described the situation to the PM, he asked me for my opinion and I explained why leaving seemed insensible at the time. What came next was up to him.

Hannes Rumm has said that EKRE now governs the use of more money than any Estonian party has before, at least in this century, and that a borderline disobedient minister simply had to be replaced for that money to stay safely under the control of the party backroom. A conspiracy theory?

Speculation is just that until it is proven. Answering the question would require me to speculate as to people's motives… I do not want to do that.

KredEx will channel €1.5 billion and Enterprise Estonia (EAS) €35 million into saving the Estonian economy. That is a lot of money.

It is a colossal amount of money. But will it be enough? The sum should be tripled at least for EAS to cover the needs of struggling companies. The question is how to find the most effective model in the conditions of limited resources.

Have you discussed with EKRE leaders how to use this money, who to support and who not to support?

I have not. Some things were agreed on the level of leaders of coalition parties, that EAS direct subsidies would go to the tourism sector and companies demonstrating initiative in terms of innovation.

What is the interest rate for KredEx guaranteed loans?

It is usually quite high, around 6 percent. Right now, we are aiming for and hopefully will succeed having KredEx charge 1 percent or less on a 100 percent state guaranteed loan, while we will also ask banks to offer maximally favorable rates because their risks are far more modest for such loans.

In other words, the total interest rate for entrepreneurs could be around 2 percent with payment holiday effective immediately, so they would not have to pay anything, neither the principle amount of loan nor interest, for the remainder of this year.

In the interests of clarity – how many loans will KredEx guarantee and how?

It depends on the product. We have put together a measure for the tourism sector that has a 100 percent state guarantee. We are not requiring any guarantees from the owner. There is a limit to this measure as the EU does not allow us to guarantee anything over €800,000 this way. A proposal was made at last week's EU trade ministers' meeting to change the limit, which we supported. So, that ceiling will likely be raised in time.

Kaimar Karu. Source: Siim Lõvi /ERR

Allow me to recall that the office of minister is a "political position for realizing political agenda." What is EKRE's agenda for handing out the big bucks?

Sigh… This is where I will allow myself a deep sigh.

If you're asking me whether it was specifically discussed, the answer is that it was not. I proceeded based on the conviction that the agenda of EKRE, just like the agenda of the government as a whole, was to do as much good with this money as possible.

The Helme family's reluctance to help Bolt is the only such story?

Yes… In addition to the Tallink debates. Those are the two companies regarding which there has been polemic in terms of whether to support them.

I have always believed money should be allocated based on rules. That we cannot say certain companies are unsuitable while others must be supported. However, I believe some companies are just so important for Estonia that a different approach is warranted. Tallink is one such company that cannot be treated based on rules that apply to all other companies in trouble.

What should be done with Tallink? Should the state give them a loan of €150-200 million and buy a stake in the shipper?

First, we need an analysis of what would be the most sensible course of action. Personally, I would not rule out either possibility. Our goal is to find a custom fit for a company that employs over 6,000 people, ensures daily links with foreign countries and yields considerable tax revenue. If the best thing [for the state] is to own a part of the company, why not go that way. From there, the question would be whether to hold on to that stake or sell it after a while.

The same question has been raised regarding national airline Nordica that is asking the state for €20-30 million in crisis aid.

The same goes for Nordica. Their potential role and significance for Estonia is different from that of other companies. Will the state need such a company in the future?

Which company? The one operating local flights in the Nordics for major airlines or the one linking Tallinn to other capital cities?

That is a big difference. Operating regional flights in other countries cannot be a strategic goal for us. It has to be offering links between Tallinn and other larger cities in a situation where other airlines might be less motivated to offer such connections than normally.

That principle applies to all companies that will qualify for direct support or loan guarantees from the state – whether their business will continue as it has or whether they will revise their business model to make sure public funds are put to sensible use.

Last week, there was a lengthy debate in the government over whether and how to help private media that culminated in a decision to allocate €450,000 to support home delivery of newspapers. Where did you stand?

I told heads of publications that direct support in the volume discussed, which was €0.7-1.2 million over three months – is not sensible. I told them that we would gladly help, but we need to discuss other things we could do to weather this difficult situation. I did not take direct support off the table, but I wanted to discuss other options.

Would you also be willing – to quote Minister of Finance Martin Helme – to "buy a ticket to see the red hyenas that publish Eesti Päevaleht gradually go gaunt out of hunger"?

People might have different motives for making similar decisions.

I would have preferred a choice between several alternatives. I'm not ruling out direct support being the solution if we want people to be delivered newspapers every day they are published. But it is difficult to decide in a situation where a single solution is offered to a complicated problem.

Why do politicians use such sharp, insulting language?

You are making generalizations. Can you recall one time I have been coarse during my time as minister?


Politicians are different.

I have been criticized for staying out of the media and for my activities having remained unseen. When I think about the time I wake up in the morning and the hour at which I go to sleep and how I have virtually no free time, something is wrong with this picture. Perhaps people think that if you don't have sharp utterances and scandals, nothing is happening with you. But a minister just does their job. So what that positive events are covered more seldom than things that speak to the animal brain. (Smiles)

Still, the portal of entrepreneurs offering their help, mapping out personal protective gear production capacity, guidelines for making and wearing protective masks – all of it has been covered while not being scandalous in the least.

Kaimar Karu. Source: Siim Lõvi/ERR

How deep will our economy and companies sink in this crisis?

Rather deep. The tourism sector hit bottom first, while it indirectly counts for 8 percent of GDP. The business models and growth trends of 2019 will never return there. Or if they will, it will take a very long time.

The crisis will hit manufacturing after a certain delay. They will start to feel the squeeze come summer. Their recovery will depend on outside orders, movement of goods, courage to invest in other countries. Whether companies will dial things back and borders remain closed. Whether contracts with Estonian exporters will be retained or put on hold.

We don't know. There is a lot of uncharted territory ahead.

And let us not forget that the fate of the Estonian economy depends on decisions we make here only in part. We need to do everything we can to avoid a major crash and to be ready to get back in the saddle once the crisis looks like it's passing. We need to think about the day after tomorrow.

Will we see less openness in the near future?

Exactly. It is coming. Things might take a turn for the regional. For example, as concerns tourism, I cannot possibly imagine Estonia seeing more than a few people from places beyond Finland, Sweden and perhaps Latvia and Lithuania this year. This is where rules [for containing the pandemic] enter play that are completely different for Sweden and Finland. When can we open our borders and how to avoid new outbreaks? It's complicated.

When can we say Estonia has exited the crisis?

What does that even mean? The aftershock of the crisis – that we have changed our customs, behavior, business processes – will last for years. Perhaps we shouldn't even be talking about exiting the crisis, we can exit the emergency situation. The crisis cannot be put in a box and filed away. It will forever remain in our economy, our lives and we will learn to live with it.

I believe we need to allow for a lot of freedom for experimenting in situations where we lack experience. We would be in a good position as a country and five steps ahead of everyone else if we learned from this crisis that our economy, society and politics needs to be rendered less fragile and able to adjust faster.

Were you able to determine over what has been nearly half a year whether Estonia's e-voting is transparent, verifiable and secure?

There have been various comments and criticism regarding verifiability, some of which I agree with. Work is underway to improve transparency and better explain how the system works to have currently questionable aspects not raise any more questions.

Will you dare use e-voting at the next elections?

Yes, as I have before.

You can add "2019-2020 – minister of foreign trade and IT, Republic of Estonia" to your international CV. Not bad?

I will be able to do that indeed.

Will you be relaunching your consultancy firm?

Possibly. If you have spent the past month living and working to bring Estonia out of the emergency situation successfully, it is difficult to realign your thoughts in terms of what you would like to do next.

Back to London?

It is possible I will stay in Estonia, while I might also return to London or go somewhere else for that matter. The past five and a half months have given me certainty that things can be achieved in Estonia, also as reflected in positive feedback and frankly baffling levels of support from entrepreneurs and professional associations. Their preparedness for cooperation has been incredibly positive, which is why it is sad to have to step aside. Work will be left unfinished.

Does it feel bitter?

(Pauses) Rather, it feels sad.

What will become of politics for you?

Even after serving as minister when I engaged in politics as much as I needed to and as little as possible, I have not developed ambitions to go into politics.

Will you be offering consultations at your firm on "How to pass by politics without being burned?" and "Values versus party agenda in politics?" from now on?

You may have just given me a title for my book.

Kaimar Karu. Source: Siim Lõvi /ERR


Download the ERR News app for Android and iOS now and never miss an update!

Editor: Marcus Turovski

Hea lugeja, näeme et kasutate vanemat brauseri versiooni või vähelevinud brauserit.

Parema ja terviklikuma kasutajakogemuse tagamiseks soovitame alla laadida uusim versioon mõnest meie toetatud brauserist: