Siim Kallas: The EU will not allow itself to be taken hostage

Toomas Sildam's interview with Siim Kallas.
Toomas Sildam's interview with Siim Kallas. Source: Priit Mürk/ERR

No one can take the European Union hostage, former Vice President of the European Commission Siim Kallas said on Wednesday when a veto by Poland and Hungary threatened the use of €1.8 trillion for the benefit of all 27 member states. Looking at the last 30 years, Kallas finds embracing parliamentary democracy to have been Estonia's greatest achievement.

The EU currently has 27 members. How many will there be two years from now?

(Bursts out in laughter) Well… I believe it will still be 27. But you never know and it depends on certain developments regarding the next [EU] budget… But I reckon it will be 27.

In other words, you do not think Poland or Hungary are backing themselves out of the union?

They might be thrown out, but they will not be going anywhere themselves.

While EU25 could look like an easy fix, it does not sound good.

Well, of course, it sounds bad.

However, the seven-year budget process being complicated is hardly unusual. Those €1.8 trillion come in two parts. One trillion and seventy-four billion make up the seven-year budget that has been agreed on and approved. What we lack an agreement for are €750 billion [the EU coronavirus recovery fund], while Poland and Hungary have also threatened to disrupt the passing of the former sum because they disagree with political conditions [the rule of law obligation for use of funds] regarding which the EU does not seem to be backing down.

Is that the kind of EU we wanted?

(Pauses, visibly surprised) What kind did you want?

One of unity, friendship, common values and understanding of those values.

My dear friend… Do you believe there were fewer disagreements when the EU was made up of just six countries? France even temporarily left the EU in 1965.

But understand that no other union in the world has agreed on so many things. That is the strength of the EU. And looking at areas where the EU has exclusive competence, nothing has changed and that – a strong EU – is what we wanted.

I believe we need to be philosophical here – neither 25 nor 27 member states can realistically want only what they like best. Managing this body requires real finesse when compromising. It is baffling how agreements have eventually been reached even in the most difficult situations.

Yet, a situation where two member states are saying they do not agree to the new budget because 25 others have introduced a condition where access to funds will only be granted to countries that have rule of law, independent prosecution and courts seems unfamiliar. It seems self-explanatory, while two member states remain opposed.

What is the EU's single experience, principle and value? That the EU will not be taken hostage.

No country can – using whichever tricks – take the EU hostage.

Haven't Poland and Hungary done just that?

They haven't yet.

But they're trying?

Poland did once [in 2017] when it opposed Donald Tusk becoming Council president for the second time. Poland vetoed it and Tusk became president nonetheless. (Laughs) The EU will not allow itself to be held hostage and will find a way [to overcome the problem].

I would emphasize, provided I'm not prejudicing the interviewer's freedom to keep asking questions, that I looked at what the people think in Poland and Hungary. The figures are nothing short of baffling. For example, when it comes to appreciation for EU democracy, Denmark is first, while next comes Poland. EU approval – the average is 43 percent, while it is 56 percent in Poland and 53 in Hungary – both more than in Estonia by the way.

And thirdly – do you feel you are a citizen of Europe? Ireland first on 89 percent, Luxembourg second on 85 and Poland coming in third. I believe Hungary was seventh.

This means that the people of Poland and Hungary are very pro-Europe. The Polish government will be hard-pressed to see that battle through. There is the solution that Poland and Hungary will yield ground somewhere, a comma is added and everyone agrees.

Toomas Sildam's interview with Siim Kallas. Source: Priit Mürk/ERR

Are we seeing domestic problems of the Polish and Hungarian governments making their way to international relations?

They have pursued different and generally un-European policy. It has been tried in the past by Austria that had its membership suspended, causing major problems.

Poland and Hungary plotted a certain domestic policy course and told everyone who disagreed to sod off, while this has now put them in an impossible foreign policy position. Domestic reforms to dial back the independence of courts and the prosecution have become a foreign policy matter.

I do not know how far they will go. But if we were to put ourselves in the shoes of [Hungarian PM] Viktor Orban, a former liberal by the way, how far can he realistically go? You have plotted a collision course where either you give in first or where the EU yields ground, meaning that [German Chancellor] Angela Merkel will propose a suitable compromise.

Merkel's position is delicate of course because of the historic background of Poland and Germany… We all know what that means.

World War II.

The Second World War and even before that, during the time of Catherine the Great in the 18th century when Poland was liquidated with help from Prussia.

It is suspected Merkel will try to compromise no matter what to at least keep Poland from leaving.

That is where we are today (Wednesday – ed.), two member states are against the budget agreement. The EU is trying to find a way to bypass them. It is a very sensitive matter domestically in Poland and Hungary. And finally, the EU would like to see it solved without a conflict.

There was a situation in 2015 when a lot of powerful people in the EU, including German Finance Minister Wolfgang Schäuble, said that Greece could end up leaving the EU. I also wrote an article for EUobserver titled "Greece's Switch to Full Self-Sustainability" – go ahead if that is what you've decided.

But leaving the EU was still a taboo subject before Brexit. Chancellor Merkel eventually arrived at a compromise that saw the Greek government give in to all EU demands.

Coming to the domestic affairs of Poland and Hungary, is the conflict a sign of just how dangerous it is to make your domestic policy foreign?

Let us rephrase and say that it is dangerous to ignore foreign policy factors in domestic policy. This point was mirrored by [Estonia's first re-independent president] Lennar Meri when he said: slow it down, boys, the world does not understand us in some matters. I remember it very clearly.

It is the same for Poland and Hungary today – that if small countries (and Poland is also a small country) ignore foreign policy facts, they will sooner or later find themselves in a very difficult situation.

As European Commission vice president, you saw British PM David Cameron refuse to joint the first Greece aid package that was unpopular in the UK that prompted Merkel and Sarkozy to decide to move forward without the Brits. And they did.

It was done in two weeks. Precisely. Cameron said that he does not support the fiscal agreement and it was done without the Brits.

Perhaps it added to the Brits' bitterness and ended up contributing to Brexit?

The Brits were never all the way in. This goes back a long way to how they refused to partake in the project after WWII and were rebutted twice by President de Gaulle after that…

I have mixed feelings when it comes to the Brits. On the one hand, they were persistent proponents or market economy – entrepreneurial freedom, free trade… They were always on hand in those matters. But dealing with them in pretty much everything else was such a pain…

Toomas Sildam's interview with Siim Kallas. Source: Priit Mürk/ERR

Does that mean Brexit was good and good riddance?

I believe many welcome it. Leaving is no longer taboo. Thinking back to your question of what would happen were Poland and Hungary to leave… It is not as dangerous today as it was with Greece back in 2015.

While everyone would be glad if the Brits stayed in the EU, I watched British PM Boris Johnson's interview [on talks with the EU] yesterday and I can't deny it makes me mad when he says that everyone needs to understand we are an independent democratic country.

Alexis Tsipras said the same thing back in 2015, that they held a referendum and we need to accept the results. They were told that we can have a referendum in the EU on whether Greece should be bailed out or not and asked what they thought the outcome might be. (Laughs)

The EU did not.

No. (Laughs) The thing about Brits is that the Brexit campaign was built on lies, facts that were used proved untrue after a while… However, from a purely political leadership standpoint – I say that if you've decided to leave, then leave.

Without a deal if necessary?

Just so.

And that is what is happening?

Well… It is quite likely. There is one thing that has not been agreed – equal opportunity. This means market conditions, competition rules, fair competition… Everything that makes the EU what it is. And Britain is now a so-called third country – you want access to our market like Norway, you need to accept the rules.

[The EU's chief negotiator] Michel Barnier has said as much. That it needs to be understood that the Brits are leaving and not the EU and that if they want to continue working together, here are the conditions.

Do you believe Poland and Hungary will take their campaign all the way even if it ends up harming them?

I dare say today that they are more likely to give in as the EU will not surrender the rule of law issue. They are in a very difficult situation as they're on a collision course with no way out.

To what extent are the two countries lessening their own foreign policy influence? Or are they boosting it instead?

They are definitely not boosting it.

I dare say based on a decade's experience in the EU that because the union will not be taken hostage, all such steps harm one's authority. You are not a big player because you will be steamrolled in the end. Just like what happened to Poland with Tusk. Finland was steamrolled when they demanded Greece's wealth be held in ransom. Slovenia also ended up alone somewhere… Lithuania… In the end, a way was found to do things without them or bypass them. And they were played for fools.

If you want to do something strong in the EU, you need to be…

Germany or France?

Or the Netherlands… Europe has five key countries. France, Germany and the Benelux. They created Schengen and they stick together. Even though the Netherlands has also put its foot down in Brussels recently, for example, as concerns austerity. It is part of the game, but the country has not played itself out against the EU.

Perhaps the Commission and Parliament's recovery plan could be saved by adding a declaration according to which sticking to the rule of law principle would not apply to refugee and minority policy?

Yes, I have read about such a possibility. However, as you pointed out, the conflict did not start with refugee policy but rule of law in [in Poland and Hungary] or the independence of courts and the prosecution.

Perhaps the solution resides in moving a comma around that will allow everyone to say they've saved face. I do not know whether that would be acceptable for Poland and Hungary or other member states for that matter. It is worth keeping in mind that other countries have not had their final say.

Were you vice president of the Commission today, what advice would you have for President Ursula von der Leyen?

(Snorts) A provocative question. I am not, times have changed and I'm not sure to what extent my advice would be heeded as the environment in which one makes decisions is a complex phenomenon. Five countries… Your advice needs to be heard beyond the office of the Commission president.

But if the president asks, Mr. Kallas…

If the European Commission has decided that rule of law principles are the condition [for the use of the recovery fund], I would advocate against backing down.

Do you recall what the Estonian government has said about tying the EU recovery plan and budget to the rule of law principle?

The minister of finance [Martin Helme] said that the Republic of Estonia agrees to the entire recovery plan. I remember the interview clearly, it was a few months ago. That is what I take the government's position to be. I haven't noticed any others.

Toomas Sildam's interview with Siim Kallas. Source: Priit Mürk/ERR

What about now when we have a conflict between the EU25 versus Poland and Hungary?

I haven't noticed anything. We must also bear in mind that keeping quiet is a sign of wisdom if there are no other signs to be seen.

We should maintain a low profile here. It is not our battle.

I'm sure you understand the government's predicament where two partners feel they would like to support Poland and Hungary, while the Center Party would side with the EU25.

Serving in the government is not a matter of what one feels. It is responsibility. You need to think about what joining Poland and Hungary in their confrontation with the rest of the union would mean for Estonia. Let us not be hasty. (Smiles)

The EU has always found a solution in situations where there is none to be found thus far.

Agreed. Even if there is no solution, one will be found. What differs is the price. If the problem is that a few countries want to take the EU hostage, a solution will be found, while the would-be kidnappers will be stuck with the bill.

What could be the lesson from this face off?

Lesson for whom?

The EU and member states.

The situation is not as dramatic for the union as it was before Brexit as individual member states leaving is no longer a taboo.

What the member states will learn is that it is impossible to take the EU hostage. You need to be able to see others in the European Union.

I have been asked what I learned in Brussels. You learn to see other countries and peoples, their interests, history and everything they proceed from. You will not reach compromises otherwise.

It is a lesson for everyone, governments that come and go. Greece, 2015 – they get a radical government that slams its fist on the table [in Brussels] and says you will now do what we want. But that did not happen. In the end, they did what the majority wanted.

Former Bank of Estonia Governor Ardo Hansson says that Estonia is becoming Greece, while Greece today is becoming what Estonia used to be.

Indeed, Greece's finances are much tighter than Estonia's today.

Toomas Sildam's interview with Siim Kallas. Source: Priit Mürk/ERR

When Minister of Finance Martin Helme said a month ago that results of the U.S. presidential election had been falsified, with then Interior Minister Mart Helme adding that U.S. President-Elect Joe Biden is a corrupt character, you joined four former prime ministers and former President Toomas Hendrik Ilves in a statement that said, "responsibility for ensuring national security and good allied relations lies with the prime minister." What would you have done in the prime minister's shoes?

(Laughs) I would not have offered commentary on one of our closest allies' domestic matters or to which extent we find presidential candidates acceptable or unacceptable. It would have required me to be out of my mind.

The PM did not comment on it, ministers in his government did.

The PM is responsible. How they bear that responsibility is every prime minister's business.

The interior minister resigned.

Indeed, it is in the past now.

I wonder whether Joe Biden's administration will remember these insults or will they not affect Estonia-U.S. relations?

Everything is remembered. But emotions are not a big part of administration. Everything is surely remembered, but decisions are made based on more practical, pragmatic reasons.

A hypothetical security crisis where we would need the Americans would not see them refuse to help because of something we've said. There is no such scenario.

Therefore, people who say that foreign policy grandstanding, insulting other countries or their top politicians renders Estonia smaller and weaker are overdramatizing the situation?

They are not. Why? Ignoring foreign policy in its domestic counterpart is harmful. I stand by that.

Let us take the EU. The Estonian government, for example, during the time of Andrus Ansip, was always willing to cooperate in the EU, his opinion was heeded and he could talk to anyone. That is the way to go for a small country. Stay in the game and you will always find a way to solve a more specific problem.

We've had things where we differed from the EU mainstream and still got our solution. The latest touchstone with the EU was the income tax exemption that was accepted and kept in the end. You can get what you want if you remain sensible.

Let us change the topic completely. Estonia will mark the passing of 30 years since restoration of independence on August 20 next year. We have done quite well for ourselves?

Of course. We have done well. We also need to keep in mind that the people born during that time are turning 30. A completely new generation.

When Estonia restored its independence, Reform Party chairman Kaja Kallas was 14, former Social Minister Riina Sikkut 8, Conservative People's Party (EKRE) Riigikogu group head Siim Pohlak 6, former Social Democratic Party chairman Jevgeni Ossinovski 5, Minister of Social Affairs Tanel Kiik 2 and head of the Riigikogu Social Affairs Committee Tõnis Mölder 1 years of age. MP Ruuben Kaalep was born two years after independence was restored…

The generation currently in their 30s… I would like to know whether they are convinced independence will be retained or do they perceive dangers.

The younger generation in 1939 and 1940 largely ignored the danger posed by the international situation. I do not know how a modern 30-year-old looks on all of it. Those who were 15 [in 1991] still remember the Soviet period, while those who were only a few years old or born later have no direct link to what came before.

I would refrain from becoming very philosophical, but… the EU was created by people who had a single principle – to make sure war would never return. They were people who remembered WWII, had taken part in it. That generation is gone now. The idea that the EU was created so there would never be war in Europe again has also receded.

Thinking back to the last 30 years, are we not seeing the same thing to some extent – our independence has been safe and now, we have seen a second wave who thinks that things went wrong and could have been done differently.

Toomas Sildam's interview with Siim Kallas. Source: Priit Mürk/ERR

Should Estonia's slogan be "never an occupation again"?

Never again alone! That has been our slogan from the first. Never again alone!

We are still repeating it. Let us put it this way: you can never have enough allies or few enough enemies.

If we say that Estonia has done well as a country, we must also admit that this success has not reached everyone.

Yes, but… there is always social stratification. It is more modest in Estonia than in many other countries. In USA, one of the wealthiest countries in the world, there are a lot of people whom it hasn't reached. Stratification was hidden in societies like the Soviet Union, while in reality, people who rode in Chaikas and those who couldn't even dream of owning a car lived on different planets.

Estonia and Europe sport modest stratification. The superrich in USA are pulling ahead and the ranks of those left behind are swelling.

Even though you say Estonia sports modest stratification, anti-elite sentiment can clearly be felt.

I suppose it exists everywhere. The Vaps Movement of the 1930s was created to counter the elite based on this conviction that a group of people had seized everything there is and left us with nothing…

Let us say we all start out equal. But then, some fare better and some worse. Some get straight A's in school, while others fail classes. You accept it for a while, but then you start convincing yourself that the problem is somewhere else – not in me but the evaluators who give others undeserved A's and unfairly flunk me.

It is the same situation in business. While everyone initially thinks it's nice Estonia has successful companies, a part of people starts wondering why they are not sharing in the success.

Spoken like a true liberal.

I am [a liberal] and I've never made it a secret. Rather, I would say we need more of this kind of liberalism.

At the same time, it is quite cruel for a lot of people or at least painful.

It is quite noteworthy how Estonia levels these differences. All these various benefits… We do not have a system that favors stratification, we do not have superrich people like in Russia.

Senseless wealth?

There is no senseless wealth in Estonia. Starting with [the first German Chancellor] Otto von Bismarck, smart countries have always tried to balance stratification. However, it cannot be complete.

As put by [Russian opera singer] Fyodor Chaliapin who stepped up to the cloakroom attendant of the Bolshoi Theater [after the Bolsheviks' 1917 coup] and said that we now have a state where you and I get paid the same, and the attendant opined that it was a very fair country. Chaliapin answered by saying that in that case, the cloakroom attendant can now go on stage and sing.

A true story.

Toomas Sildam's interview with Siim Kallas. Source: Priit Mürk/ERR

I have sometimes asked the question of whether Estonia was on the winning side when the tragic and complicated 20th century ended?

I'm not sure about the winning side… It is a harsh word as it means there are losers somewhere. But there were more successful countries and those who fell behind, and we were definitely in the former group.

If someone wants to argue, which of our peers moved forward faster? Where are those who leapt further? Now, Latvia… Right now, everything is overshadowed by Covid, there is fear and uncertainty in terms of how we can beat it and comparisons are difficult to make. But when we used to compare ourselves to Latvia, we seemed to be doing better.

Almost 15 years ago, in October of 2006, President Toomas Hendrik Ilves phrased the task and obligation to hand over to the first generation brought up in re-independent Estonia a country that looks and feels like the occupation never happened. Have we managed it?

I cannot tell you. But visually speaking, Estonia today is colossally different from when it was occupied. When I was in charge of developing an agency (the savings funds government – ed.) during the Soviet period, I remember that a single new shop was built in Viljandi during the entire Soviet period. (Snorts) A single one, on the Paalalinn side of town, I think. The new generation cannot really understand that. Not to mention how it was with apartments and everything really.

In terms of mentality… I believe we have more or less gotten used to democracy. In any case, we have not yet felt the urge to dissolve the parliament and replace it with a dictator as happened in the 1930s.

We have embraced – and I find this to be the most important thing, also in terms of what Ilves said – parliamentary democracy. And neither EKRE nor anyone else is looking to radically change that. We stand apart from many others in this, including former peers.

And we could use more confidence, or?

We need more wisdom and energy.

It would be difficult to require something new from me. But those starting new things – companies or something else – today are between 20 and 50 years of age. The energetic generation as I like to call them. Everything depends on them. The next question is whether this energetic generation is best put to use in government agencies or state-owned companies of which we have plenty or whether they feel challenged by private business or going abroad.

That is the question. If we can put the energetic generation to work for Estonia in a future-oriented manner, we will be capable of the next developmental leap.

What about those over 50?

If the energetic generation creates opportunity, there will be work and sustenance also for us. No one says you cannot start a business when you're sixty.

Toomas Sildam's interview with Siim Kallas. Source: Priit Mürk/ERR


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Editor: Marcus Turovski

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