The current coalition's tendency to borrow its way out of crisis will come at a price later on, said former European Commissioner and Reform MP Siim Kallas, as is its tendency to bestow gifts on private sector favorites.
Kallas viewed the significant increase in the country's debt burden under the current coalition of Center, EKRE and Isamaa, and in the wake of the COVID-19 pandemic, as a drastic change of mindset in the management of the Estonian state, with balancing income and expenses being rendered irrelevant and in the heat of the large-scale borrowing.
"I can't give up the old-fashioned, orthodox approach that debt is alien, loaned bread and chips don't last for long," Kallas said on ERR politics discussion show "Otse uudistemajast" Wednesday.
"I believe in the principle of budget balance and that someone has to pay off a loan in the end. I have a question about what happens next. There can be a situation where you no longer worry about having to balance your pocket book. For whatever reason, I can take out a loan and cover my expenses," Kallas went on.
"This brings with it an illusion that you will then be able to meet all their needs. But you will not be able to - new expenses will arise immediately, many people will be dissatisfied, there will be areas where there is still a lack of money," he added, giving the example of Niccolo Machiavelli's idea that a ruler must not be a gift-giver, since in so doing they do good to a few, but bad to many.
"After all, when you share money, no one will thank you for it, everyone asks what will happen next and why was I given so little," said Kallas, citing the case of the Porto Franco real estate development, which received a large state loan recently.
"If he gets €40 million (the Porto Franco figure was close to this – ed.), the other person will wonder why they only got €100,000," Kallas went on.
Kallas said that the loan was not some sort of magic wand that can stimulate development, as evidenced by Greece and Italy, who did take out loans, even as borrowing can sometimes be a useful thing.
At the end of the day, a loan still needs repaying, Kallas said, adding that a Reform-led coalition would be very careful if it were in office in the current sector, and would live up to its name in bringing about structural and fiscal reforms, as well as taking care of the hard-hit tourist sector over the longer term.
A directly elected president would require the role getting more executive powers
Kallas also talked about presidential elections, ahead of next year's election and in the light of his 2016 bid, which saw him get the highest level of votes from the electoral college.
Kallas said that this had been a bit of a sore point for Estonian democracy – not that he had not become president, but that procedures seemed to have failed.
He also said he had no desire to run for the office again.
The current incumbent, Kersti Kaljulaid, was voted by a special council of Riigikogu elders four years ago after regular rounds of voting at the Riigikogu and then in the regional electoral colleges had drawn a blank.
A direct election by the public, while being hugely attractive to many, and not something he would oppose in principle, would need to specify exactly who was being voted for, so as not to conflict with the Riigikogu – itself voted for by the people.
One way round this would be to give the president more executive powers than the role currently has, but then this could also cause conflict with the government of the day, he said.
Siim Kallas is a former European Commissioner, and is now deputy speaker at the Riigikogu. He was also prime minister in the early 2000s.
Editor: Andrew Whyte