Siim Kallas: Crises require common sense

Siim Kallas.
Siim Kallas. Source: Siim Lõvi /ERR

No one saw the security crisis, virus crisis or energy crisis coming. Neither in Estonia nor elsewhere. Neither of the three crises has been manufactured by Estonia. They have hit us from the outside. They are the enemies against which the state must protect the Estonian people today. But we must not lose sight of the future in the process, Siim Kallas writes.

Protecting oneself requires pooling one's forces. A hundred years ago, Estonia fought a foreign enemy. And won.

The War of Independence was fought by a democratic Estonia headed by an elected parliament and government.

No one was silenced. The left-wing press demanded suing for peace even when the conditions were unrealistic.

The parliament was less than enthusiastic about the war until the Battle of Võnnu. Armed forces commander Johan Laidoner took flak both in the Constituent Assembly and the first Riigikogu during the war.

But how to organize the defense of one's people against three simultaneous foreign enemies, while not forgetting about the future?

Inevitably, society needs to share the burden of defending the country.

When France and Britain were compared during World War II, it was asked why France surrendered so easily, while Britain didn't. One answer is that defending the country was every young boy's business in Britain, while it was strictly the government's business in France.

Today, defending the country is not primarily a matter of arms, mobilized troops and requisitioned horses.

The main thing is money.

Education is the future.

We have decided that the pay of qualified teachers needs to reflect the value of their work and be at least 120 percent of average salary. This, coupled with the needs of higher education, requires at least €500 million.

A total of €240 million will be used to alleviate the effects of the energy crisis:

- €88 million for a 50 percent reduction of the power transmission fee,

- €52 million to cancel excise duty hikes,

- €79 million for the least fortunate households measure,

- €21 to temporarily abolish the gas transmission fee.

The Covid infection rate will soon start going up also in Estonia. This will bring growing healthcare expenses.

The Estonian state is asked to subsidize energy consumption on whichever level, complete with electrical heating, swimming pools and luxury vehicles. Why should the taxpayer who has none of these expenses agree to something like that? Why couldn't the taxpayer wish their money was spent on education instead?

The question of where to find the money is foremost in my book. The honest answer would be that we will hike VAT if necessary and pay support that way. This conviction that we can reach into the wallet of Germany for as much as we need might become a dangerous illusion. The Germans might at one point be fed up with others spending their money.

But then we can just borrow as much as we want!

Let us keep in mind that we will be making loan repayments of €472.4 million from the state budget this year. The sum is in the same ballpark as what our education needs or double the energy compensation budget. Had we not borrowed, we would have the necessary €472 million for education or the energy crisis today. And where is the money we borrowed? How was it spent? Where is the developmental leap that loan money delivered? A billion euros was distributed to citizens when the pension system was dismantled. Where did it end up? It was spent on large cars and more expensive dwellings.

The state pouring money into circulation causes inflation, with price hikes swallowing all additional benefits. It is an age-old fact of economics.

The situation is difficult. Even more difficult than the early 1990s. Crazy populism is today wielded by a party some members of which could still remember the decision-making and responsibility when independence had just been restored.

How about we try to look to tomorrow instead of just this afternoon! If only a little.


Follow ERR News on Facebook and Twitter 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: