Andrew Whyte: Pin the tail on the squirrel, or why Kaja Kallas won't resign

Andrew Whyte.
Andrew Whyte. Source: Nick Rawle

The question of Kaja Kallas' resignation as prime minister of Estonia appeared in the media, including calls to actually do so, through the latter half of this week, over revelations her husband had a stake in a company transporting manufactured items to Russia.

Yet these exhortations can only lead to something akin to the children's game, pin the tail on the donkey, or in this case, the squirrel – the symbol of the Reform Party.

For those not up to speed on the story, we found out this week that Arvo Hallik, Kallas' husband and a man who had up to now been the very definition of low-key, had a near-25 percent stake in Stark Logistics, the company which was shipping to Russia aerosol cans and similar products made by Metaprint, another Estonian firm.

As in, still doing so as of this week – Hallik is now cashing out – and with a company which made a turnover of around €1.5 million since the invasion of Ukraine began on February 24, Estonian Independence Day, last year.

Any profits would also be taxed and might contribute to Russian state coffers in that way.

All this while Kallas was one of the leading, if not the leading, after Volodymyr Zelenskyy, voice in the world calling for a tough line on Russia and doing business with Russia.

Hypocrisy? Maybe. Career ending? While the NATO secretary general post, for instance, is presumably gone forever – and it was never looking likely – back at home, there is no real reason for her to resign the position of prime minister.

First off the bat, Kaja Kallas does not need to resign. Estonians are nothing if not pragmatic. There is no strong falling-on-my-sword culture here; no dramatically taking one for the team and for the greater good, when one potentially did not need to.

Yes, people do sometimes cast themselves as the victim of the piece after being ousted, but in that case the decision was not theirs themselves to make.

But let's not only keep in mind how the situation looks in the context of the war in Ukraine, but also the context of the war on the ground as it is now, rather than in February 2022.

When the war started, it was one of the more dramatic things many of us would have witnessed in our lives. Personally, I'd need to go back to September 11, 2001 for something comparable.

Ground attack helicopters hunting in packs, dozens-of-kilometers-long armored columns in the major routes leading to Kyiv, the dreaded 'Z' symbol, Bucha, Bahkmut...

And as for now? Even relatively optimistic commentators in Estonia have started talking about a World War One-style deadlock, the fact that the Russian side is thoroughly dug in and literally entrenched. One can find parallels here from World War Two as well (eg. Stalingrad, not too far from Ukraine), if one is so inclined.

So just as it was less of a sin to have been exporting non-military, consumer goods on behalf of someone else, to Russia, up to February 23, 2022, surely there will be a time when it is less of a sin to do so after that date, as well. We may even be nearing that cut-off point, maybe a peace deal is coming – we'll know more next year.

Arvo Hallik has not broken any laws. The Metaprint goods were not on any sanctioned list. So if you want to take a purely legalistic view, he has done nothing "wrong," and the rest is down to a question of ethical interpretation – a point Kallas, a former lawyer herself, has made already.

We have actually been here already and with a major political leader of a country which, too, has been in the front rank of being tough on Russia and supportive of Ukraine, namely the U.K.

Last year, when it became clear that the wife of Prime Minister Rishi Sunak had a stake in an IT firm with operations in Russia, he essentially just said it was nothing to do with him.

The Hallik adventure may also seem like small potatoes compared with other business ties some people, yes including from and in Estonia, would still have with Russia – given the vast resources this petro-state has to offer; the riches of the orient, no less.

Mining concerns, precious metals, would be one such area that there would be scope for retaining non-sanctioned, non-illegal business interests in. Logistics as we have seen, is another.

Lots of smaller companies manufacturing items also will have production plants in Russia, and for that matter, in Ukraine.

But back to Estonia and any Kallas resignation.

Barring a palace coup or Reform's coalition partners turning on them, there's no real leeway for this.

Reform has 38 percent of the Riigikogu seats – Eesti 200, SDE, Isamaa and Center combined have 47 seats, so could not obtain the magic 51 needed for a majority, even if such a fractious alignment could hold it together.

The sixth party, EKRE, has 17 seats, more than any party other than Reform, albeit a long way behind, and as such is an alternative route.

It is a visceral queasiness about that alternative, however, for many people, which will keep Kallas and Reform on as the good guys even in the wake of everything that has gone on with Metatprint, and everything that Kallas has said about Russia and Ukraine, up to this past week.

If Reform were to go down the route of, let's say the Ides of September, and dispatch Kallas, Caesar-like, they better have someone good lined up as an alternative, while at the same time, unless they do – and unless that theoretical figure had a cluster of close supporters hedging them about – there would be absolutely no reason for this to get underway.

An explanation from the prime minister will likely suffice – indeed this has been suggested by one polling company in Estonia already – and while that may be accompanied by a Riigikogu vote of no-confidence, the latter would be a formality.

SDE and Eesti 200 don't want to be out of office, and the former have said the coalition will hold out while the latter are facing their own issues.

A no-confidence motion is not an especially imaginative or unusual step either. Kallas has already faced more than one.

When? Oh just over a couple of months ago. And she faced off the threat of one in mid-summer 2022.

Oh, and she easily survived one in mid-summer 2021. Do you see a pattern emerging here?

Kallas has not broken any laws herself, and presumably a constitutional route is not on the cards either.

As we've seen, there is not likely to be any preemptive act of noble resignation either. Doing so would be, at least in an Estonian context, a tacit conceding of guilt. And no one does that in Estonia.

Continued discussions on resignation simply lead people further and further out into the mire. Kallas' apparent bewilderment when the news broke at there having been anything wrong with potentially indirectly benefiting from Hallik's business interests is in fact, for her, the correct course of action.

People scratching their heads or asking "are you serious" is a good thing – those detractors then have to expend energy on outlining what exactly is wrong, and why. So Kallas has the initiative, in other words.

A full explanation may come this week and that will be that. As in: She's explained already, what more do you want?

In this sense, Kallas has the easy job. Not to violate Occam's razor, to stick to a consistent line – or alternatively to completely flip things around and start changing the story faster than people can keep up, then becomes a kind of pin the tail on the donkey media-fest. Or bobbing for apples, if it drags on into October.

Reform more than any other is the party of the monied, the successful, or the wannabe successful, but in this and any context it is simply in poor taste to lash out at those smart enough to succeed in this game, yet – there is no equivalent to the "eat the rich" thuggery which can be observed in many Western European countries.

More than that, the underlying principle is that everyone gets, if not their fair share, at least some share – provided you play by the rules, compared with the situation in larger countries, where it is much easier to get left out in the cold.

True, Kallas' predecessor as Reform leader and PM – Taavi Rõivas, once stepped down in the face of allegations – but not from the post of prime minister.

Plus Rõivas did not have the sheer backdrop, to the same extent anyway, of international media boosters – all the big publications that matter, Politico, Deutsche Welle, the FT, the BBC, and many more where Kallas has been a permanent fixture since even before the current phase of the war began.

This legacy," the Kallas effect" has not reached its expiry date just yet, in other words, and, barring a couple of pieces from the FT and Bloomberg, the majors may not have the flexibility or the interest to do a volte-face on Kallas this late in the day.

Ultimately many people in Estonia would see the blow to the country's reputation that would bring, known as "what the elephant thinks of us," as far outweighing Kallas and Hallik's alleged peccadilloes.

This is not just a passive strategy either; Kallas, Reform, the Estonian government, seem to have a highly effective network of stringers, fixers and influencers out there who can get to the international media when they need to, and fast.

Thus, damage limitation exercise had likely already gotten underway from last Wednesday afternoon when the story broke, at the very latest.

It may well be that in the anglosphere, for instance, "X-is-categorized-as-Y-and-so-therefore-Z-follows" and so a resignation might seem normal and natural, though if as we have seen with Sunak this was never on the cards there, it shouldn't be in Estonia either.

In Estonia, it can be more usual to hold to apparently diametrically opposing positions in separate compartments in your head and without fear of contradiction.

And since all will get their share as it were, it can sometimes be wiser to sit tight and get a good share, rather than a not so good one.

There will be more to come, of course, but unlikely anything which would act as further pressure for a Kallas resignation.

Much is in her court, too – it may be that she does not really like the position of prime minister.

The Estonian pragmatism might kick in again as it did with that other Estonian strong female lead of recent years, Kersti Kaljulaid. But this week's saga would not be the sole defining factor of such a decision.

So, expect the unexpected, except for those times when the expected will in fact come to pass.


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Editor: Marcus Turovski

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