Kallas: Greece a good example of how a country in debt will not remain free

Reform leader Kaja Kallas.
Reform leader Kaja Kallas. Source: Ken Mürk/ERR

Reform Party chairwoman Kaja Kallas tells ERR in an interview that Greece's example should be a warning in terms of a country in debt losing the ability to make its own decisions. Kallas also confirms that the Riigikogu opposition will deploy obstruction tactics against the marriage referendum bill.

You quoted Ardo Hansson at the Reform Party's virtual general assembly that took place over the weekend in that remedying the fiscal deficit created by the previous and current governments over four years would require €450 million worth of tax hikes or spending cuts every year. Why would we hike taxes and which taxes would you raise?

As I said in my speech, difficult decisions and debates are needed. Difficult choices are needed to bring us out of this deficit, as pointed out by Ardo Hansson. I cannot tell you what we should hike or cut right now. What I mean is that these debates and decisions lie in our future. Because the current government seems to have absolutely no intention of making them.

Is there a rough idea of how much of that sum could be covered using tax hikes and how much using cuts?

No. Because we are given very little information about the fiscal position. That question should be put to the government. The Estonian Fiscal Council has said that steps need to be taken to move closer to fiscal balance, while we can see no such steps, no cutbacks or efforts to find that money. We need to move toward restoring balance, taking those steps, while I cannot tell you what to cut or which taxes to hike without a detailed overview of the budget.

Is balancing the budget inside the next four years necessary or could we opt for a softer landing so to speak, do it over a longer period of time to avoid draconian austerity measures?

It is impossible to restore that balance over the next four years. It is unrealistic. I believe everyone can understand that €450 million worth of austerity cannot be found in that time. Fiscal deficit will be with us for a long time, but we should at least have the will to reduce it. It does not currently exist.

Isn't €450 million annually a slight exaggeration?

It is not. It comes from what [former Bank of Estonia governor] Ardo Hansson has written and is based on current and forecast deficit figures. It is based on expert opinions.

Would an activity plan for remedying the deficit be your first order of business were you part of the government and the one making decisions?

We would start the process of returning to tidy state finances. It will not happen overnight. A deficit of this magnitude cannot be immediately dealt with. But we would at least take steps toward restoring balance and covering the deficit.

You said in your general assembly speech that "a country that cannot pay its bills will not remain free for long." Are we in danger of becoming insolvent and who would be the creditors in that case?

Those who have issued the loans. We need look no further than Greece. They owed a lot of money to German creditors and Greece is still very much dependent on Germany today. A creditor will always gain a measure of control over you if you cannot repay your loan. Therefore, a country that cannot afford to pay its bills will not be free where it matters.

When and as a result of what kind of behavior could we end up in this worst-case scenario?

You can borrow more to repay existing loans at first. But a wall will be hit at one point and all those loans will end up costing too much. Greece is once again a good example as it was told by its German creditors what it needed to do. The Greek people were not happy about losing the ability to make their own decisions. I cannot give you a timetable, but it took a few elections cycles before things got really bad in Greece.

You urged people to answer "no" to the marriage plebiscite question in your speech. What is your opinion of the Social Democratic Party's (SDE) plan of blocking the bill in the Riigikogu using obstruction tactics?

If you read of listened to my speech, you will know that I said that the first struggle needs to be against this referendum over the rights of minorities. We talked about preventing the referendum. After that came the realization that if the referendum will go ahead, people need to write "NO" on the ballot paper irrespective of the phrasing of the question.

What about the social democrats' obstruction plan?

It was not SDE's idea but rather what the opposition had discussed before. They were simply the ones to table it. We have said from the first that the referendum needs to be blocked because it is fundamentally wrong [to use a referendum to determine minority rights], it will split society and needs to be prevented using whatever tools the opposition's toolbox holds.

Have you discussed and coordinated the initiative with SDE?

Yes, of course.

The opposition is planning to drag out the processing of the referendum resolution in the Riigikogu?


Political scientist Tõnis Saarts said last week that the coalition was put together for the strategic purpose of avoiding the Reform Party becoming the kingmaker of Estonian politics again, only allowing the Center Party to rule at its mercy. What is your opinion of this train of thought?

I understand that Isamaa and Center hoped everything would be better and that they would be holding the trump cards when they entered into a coalition with the Conservative People's Party (EKRE), while everyone realizes today that they miscalculated. They are not free in this coalition and it is not solving a single problem Estonia faces. The only thing this coalition does is run after EKRE, with both Isamaa and Center their hostages. I of course understand the underlying pragmatic consideration.

You made a proposal to Center Party chair, Prime Minister Jüri Ratas last week to meet regularly. Was it sincere?

Of course it was sincere.

Have you been in touch since?

We will try to find the time to meet, so there would be a regular meeting between the PM and opposition leader.

Are you ready to offer Ratas the prime minister's seat in exchange for a new coalition with the Reform Party?

First of all, no such talks are underway at this time. So, there is no need to offer or withdraw anything. It is not relevant at the moment.

Would such a step back by the Reform Party help curb damage and a split in society at one point?

I will not be presenting any condition we have or have not discussed via the media. You cannot say such proposals have been made either. Let's leave that topic for the negotiations.

What are the current government's decisions that Reform would immediately reverse had it the chance?

First of all. The makeup of the current Riigikogu would not allow us to form a government on our own. A coalition with other parliamentary parties, some of which are members of the current coalition, would need to be formed. What can or cannot be reversed would depend on what we could agree on. But one thing we would definitely cancel is this referendum.


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Editor: Marcus Turovski

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