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Interview: Siim Kallas on ambitions, Estonian politics, and EU presidency

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

Following the local elections in October this year, Reform Party founder, former prime minister, EU commissioner, and presidential candidate Siim Kallas took on the job of municipal mayor of Viimsi, a community on the outskirts of Tallinn. In his interview with ERR's Toomas Sildam, Kallas talks about local government, his party, the EU presidency, and perspectives in Estonian politics.

When you left Mustamäe in 1993, why did you decide to move to Viimsi?

People we know built terraced houses there, and I was invited to join. For visitors it was quite a long drive back then. Now there's a properly paved and lit road, but back then the road was full of potholes. I can remember how President Lennart Meri was on the way to us once. He got lost. We waited and waited, and then a bodyguard called and asked how to get there. It turned out that the president had driven up the road next to ours. And for years we had to shop at Selver in Pirita because there were no big shops in Viimsi. Now there are six of them in one place.

Viimsi is where the rich live, isn't it?

If you're talking about the likes of oligarchs, there are no big castles, but the average income is greater than elsewhere. It's one of the less prosperous middle class areas. Viimsi is more even than Nõmme (one of Tallinn's most expensive districts; ed.), where great residences were handed out to workers in the Soviet era and where you get very nice areas interspersed with run-down old houses. You see less of that in Viimsi.

You're Viimsi's municipal mayor, is there anything you need to worry about with a budget of some €30 million?

Viimsi has grown very quickly and is going through all the usual growing pains. When I moved here 24 years ago, 8,000 people lived here. The official number today is some 20,000, but according to a mobility study there are actually about 23,000. And there's room for more.

This is where the problems come from. Transport, for one thing. And storm water, at the moment several places are clogged up or flooded because of the rain. The infrastructure can't keep up, we don't have a proper culture center, we don't have sidewalks everywhere, childrens' playgrounds are too small and there are too few of them.

Something that is very important to me and the current local government is to take care of the forests, which are of key importance to the living environment in Viimsi. We want to get to an agreement with the state's forest management that there are no commercial forests in Viimsi, and that there is no point having a timber reserve here. On top of that there's social affairs, an area in dear need of renewal. Anything connected with education. There are plenty of kids in Viimsi, and we don't want people to drive them to school to Tallinn, but that they can find schools right here.

You're getting a state secondary school?

Yes, we're getting one. Then there are plans for one private school. The Young Talents School is important to the municipality, where we're merging the current music and art schools.

The small islands are worried about the future and sending pleas to the Riigikogu and to the government. Viimsi includes nine islands, of which Naissaar and Prangli have year-round residents. Who has to make sure there's a regular connection and guarantee that they have electricity? Prangli has been looked after, they have a regular ferry connection and other support. We're discussing with the residents of Naissaar soon how we can improve connections there. As someone who has dealt with transport (Kallas was the EU's transport commissioner from 2010 to 2014; ed.), I'm asking now what a sufficiently frequent connection is. For Estonia, two flights a day? That's something we still don't have with plenty of important places in Europe. In the case of Prangli or Naissaar, something similar is unthinkable, there are no resources for something like that. On the other hand, the people who live there understand that they're not in a suburb of Tallinn, and that's also one of the reasons why they live there.

The municipality of Viimsi has been affected by obscure suspicions that someone there is always corrupt. How much of this have you experienced yourself?

There's nothing of the sort. 25 or more years ago, when land was given back and redistributed, there were quite a lot of rushed decisions, but those times are over. Laws have been improved, supervision of all transactions has become more effective. Municipalities worldwide have issues related to construction permits and land, and that people would sometimes like to do things differently one way or another. But I haven't heard of a single accusation or suspicion in Viimsi.

The members of the previous municipal council are saying that also back then things were done properly. Of course this doesn't mean that something might not come up. But there's nothing I know of at this point.

A lot of people were surprised to hear that you are Viimsi's municipal mayor. Moving from the 12th floor of Brussels' Berlaymont building to Viimsi's local council office, to many this seems quite the fall.

What fall? I was deputy president of the European Commission until Nov. 1, 2014. Since then I've been a free man. The position of municipal mayor is another job that isn't very different from my previous ones. You have a plan, challenges, people, resources, problems to solve and problems you won't be able to solve. In that sense this is all very familiar.

There was the feeling and the question that yes, of course I'll write articles, but how many people will read them and how much will they actually influence events, and what kind of politics you're after when you publish your opinion on things. A municipality is a very real thing, and I'm very happy. This is very interesting.

There are those who suspect that the position of municipal mayor is your springboard to other places. Is it?

You know very well that I'm turning 70 next year. Let's take it one step at a time here. Of course becoming mayor came unexpected. Just yesterday some people from Viimsi told me that if people had known that I wanted to be mayor, I would have had twice as many votes. But there was no such plan at first. Then we had a good result and everyone expected that we would do something. We didn't have a definite candidate for mayor at that point, and I was worried that we might lose the momentum we had built up. So I agreed with Taavi Kotka (the current chairman of the municipal council; ed.) that we would take on this responsibility, and here we are, trying to do our best.

Couldn't you have stayed in Brussels, had you wanted to?

I lived there for then and a half years. That was enough. There are so many nice things in Estonia. Of course Brussels was great and interesting, everything was big, and I still go there from time to time, I've led a regional policy expert group there as well that made proposals how to simplify the rules of using funding. But still I think that my time to live and work in Brussels is over.

How much do you regret not going for the position of prime minister in 2014 and your unsuccessful candidacy in the presidential elections in 2016?

I never look back. If you allow yourself to suffer from things that went wrong or differently from what you hoped... There's no point. But the presidential campaign was very edifying, I did well, but the final result turned out to be different for reasons that didn't depend on me.

How does it feel to take these blows in Estonia? You're familiar with the experience by now.

You always have to be ready to deal with that.

A committee is about to assemble in the Riigikogu that will discuss whether or not to change the procedure of the presidential election, and how. What would be better, leaving everything the way it is, or elect the president either only in the Riigikogu or only in the Electoral College?

The current situation is bad, and the proposal to change something certainly is a good thing. What happened last time is what nobody believed would happen, with the elections looping from the Riigikogu to the Electoral College, and back to the Riigikogu again. I'm very much in favor of a change that actually gets us a result, and that a simple majority is enough.

I really wouldn't exclude the possibility of direct elections either, because then a candidate would win who manages to get at least 290,000 votes. But I can see problems there as well, as such a president would have a strong popular mandate like no one else has it, while in Estonia the president's powers are very limited.

I know that according to a proposal by the Justice Ministry the Electoral College could have more members (ERR News reported). That seems reasonable, as this would add legitimacy. In any case, all the considerations to change things are better than the current situation.

After the failed presidential elections in 2016 you talked about the possibility of a new political party. How has this idea developed?

Back then I expressed my opinion why the founding of a new political party would be difficult and hard. I've already been among the key people in the creation of a party (Kallas is one of the founders of the Reform Party; ed.), and to make it perfectly clear, I'm not planning to start another one. But generally speaking this kind of thing has always been around, and there has been just one parliamentary election where no new political group came up.

There are calls for a new party all the time. People go around talking about how the current parties can't manage, that something new is needed. And I would say go ahead and try.

Are you running in the 2019 parliamentary elections?

Listen, I've just been made the municipal mayor of Viimsi. We'll see what's next when it happens.

And how about the elections for the European Parliament in 2019?

Let's take it one thing at a time. Going back to Europe does seem interesting, but today let's take it one thing at a time.

And how about the 2021 presidential elections?

If I answer yes to all of these questions people will think I've gone mad. If I answer no, you won't believe me. Better to take it one thing at a time and see how things develop.

Who will win the next parliamentary elections?

Today I don't doubt that the Center Party will win. Today. They are... They're good. They're good in the sense of political work. They clearly scored points with the EU council presidency. Though there are the things as well where I'm rather critical.

They're popular today. They have a new generation of politicians. Jüri Ratas and Kadri Simson are old politicians...

Perhaps experienced politicians, rather?

Experienced, yes, in terms of their age they're young. But they're also followed by a new generation that is very sharp politically, and they are beginning to shape this party.

All of this doesn't mean that I want the Center Party to win. On the contrary, I don't want them to win.

How have the Center Party and Jüri Ratas handled themselves?

Humanly they've done well. Looking at the bigger picture... In democratic conditions it's extremely easy to criticize the government. I would be very careful. Once you're in government yourself you understand that two thirds of your decisions are debatable.

To what degree do you think is it true that the Center Party, after such a long time in opposition, is trying to push through as many of its promises as possible?

That's what they're doing. It's part of the Center Party's legacy that they play to several hundred thousand people who count themselves among the less financially secure, that has always been part of their politics. But the Center Party has nothing to say about the future, and that's where the Reform Party's chance is, if we can use it to our advantage.

Was it necessary for the Estonian society that the Center Party come out of their political isolation?

Politically, yes. It isn't natural that a party with the support of 30 percent of the voters wouldn't test its skills in government. But let's hope that this time is only short.

How is the Reform Party doing next to this new Center Party?

Though we've been doing well in the surveys, we can't be happy with being number two. And if we're number two in the 2019 elections, we'll remain in opposition for four years, because why shouldn't the Center Party continue with its already familiar partners.

But the Reform Party's task for these elections is clearly to win them. It's vital that we do better.

What does the Reform Party need to get there?

We need ideas that make us stand out. There are opportunities. The Center Party, despite people with a lot of potential, is relatively old-fashioned. Finland just turned 100, and I remember a time when we created a tax system in Estonia that was completely different from the Finnish one and that got Finnish entrepreneurs to come here with gleaming eyes. A lot of them stayed and brought their business here. The Finns saw us as an innovative country, a good place to develop their business. Today that isn't the case anymore.

As far as innovation is concerned, the current government is hopeless, they have nothing to contribute here. The Center Party has done well continuing with the digital and e-agenda, but there isn't anything new. And the tax system is making me laugh. You can't forget that 80 percent of companies are small and don't get government contracts, they don't depend on garbage disposal, free public transport, or road construction. IT, that's small businesses as well. What's this government's message to them? The tax system is now a negative issue only. We all understand that the state needs to spend. And I don't exclude the possibility that if I was a member of this coalition and I needed to increase spending, I would also raise taxes. But let's raise them in a fair and even way.

Should the new government have raised income or value-added tax, rather than piecing the budget together million by million getting the funds out of new or increased taxes?

It all depends on what is needed.

Money is needed to put campaign promises into practice.

Then basically income tax could have been raised, but evenly, so that nobody feels treated unfairly. If money is needed, VAT can be raised as well, but there you have to see how far people will go along with it. I believe that the balanced budget is one of Estonia's key ideas in recent decades, and we need to hold on to that. A balanced budget is in itself valuable. This depends on your attitude, and the way you think.

The Reform Party's ideas for the election campaign are one thing, but what about a leader that could help the party win the 2019 elections?

Today the party has a leader. The next party congress, where a new leader could be elected, will take place in January 2019. That's two months before the elections, which means that as a result of the internal vote we'd have to shift names around on the lists as well.

The Reform Party's general meeting is taking place in late May or early June 2018, where the subject will come up whether we want to extend the tenure of the current leadership, or make staff changes.

And yes, the question is whether or not to have new elections then. I'm in favor of it, holding new elections is sensible. It's a question of legitimacy. Either a new leadership is elected and the same chairman continues, or someone else becomes chairman. Either way, everybody would have to get arranged with the result.

We can't enter the campaign with a party whose leading group is divided. If we seriously want to talk about winning the elections, then we need everyone to work as a united team. The legitimacy gained by new internal elections would be an advantage.

It's reasonable to hold these elections in June. One more important thing, by the way: nobody in the Reform Party needs to be afraid of free elections. Hanno Pevkur was elected chairman the same way in January this year.

If Kaja Kallas asked her father Siim Kallas for advice whether or not to run for the chairmanship, what would his advice be?

Nice weather today, isn't it. Some snow. (Pauses.)

I couldn't say. (Pauses.) I can quote Kristen Michal (Reform's Tallinn section chairman and presumed contender for the chairmanship; ed.), who is influential in the Reform Party and who has said that the party will win the next elections only with the right leader and the right team, and that without such a leader there will be seven years of bad luck.

Well basically I see it the same way. If we can't or won't put together such a team... But let's not rush things. Don't ask me about someone so close to me. There is a whole bunch of others who think that they would be very good in that position.

Urmas Paet?

For instance.

Jürgen Ligi?

For instance. This is risky for the current chairman. But let's assume that we postpone these elections and extend the tenure of the current chairman and leadership. In that case there would be the notion that these people then think that they aren't given a chance, and they would enter the campaign holding a grudge. The voters understand this kind of thing perfectly. Tony Blair has said that a politician isn't an actor, but that they have to play the role and represent the point of view they genuinely believe in.

A few years ago you said that with the concept of the Reform Party votes can be won, but not hearts. How can the party reach people's hearts?

We need to understand what moves them. 25 years ago we had a dynamic generation of the age of 35 to 45. The same age group today as well as younger people can't imagine today that you can have money in your pocket, but that all of its value can suddenly be gone in a heartbeat. Today the euro is one of the pillars we rest on. But we've lived in a time when money was literally a joke. What's green paper that looks like a three-rouble bill, but isn't money? Answer: a three-rouble bill.

We need to be able to prove that the Reform Party can still unite innovative thinking with bold economic policy. All innovative decisions are painful in one way or another, it's not like they're ever only good for everybody. With economics and taxes there's always a winner and a loser. But the Reform Party can't base its politics on redistribution, free services, and other things of a similar kind. Our position still has to be that free public transport is a bad thing.

Can you sum up what is currently happening in the Reform Party?

We're looking for the kind of concept that could help us win the 2019 elections. Which people? Which ideas? Which political tactics? Today we don't have anything like this ready.

The current coalition emphasizes that hundreds of thousands of people are getting more than €60 a month thanks to raising their tax-free income to €500. For a lot of people that's a lot of money.

It is. But where do you get that money? This is redistribution. This money doesn't just fall out of the sky. Liberal economic policy also sees it as important to make sure those less financially secure get by, but in the case of the current government, that's their main idea. This isn't sustainable politics. Why €60? Why only so little? This is always the question with support. If you distribute something, the receiving end is never happy, because they think they got too little, and those who didn't get the same benefit at all are angry because something is taken away from them. This is the situation in Estonia today.

To what extent can you understand that Taavi Rõivas's government fell a year ago?

Of course I have my own opinion why it happened the way it did. One of the key issues were very bad personal relationships within the coalition. We can see now how Jüri Ratas as prime minister has managed to deal with extremely difficult situations in his own party, and we have to respect him for that. Taavi Rõivas couldn't manage the coalition.

The second problem from the start was the ambiguous and complicated coalition agreement. It pre-programmed endless infighting and conflict. After the 2015 parliamentary elections I immediately thought that nothing good would come of it. It makes sense to write down the concessions made to each party, but not what exactly has to happen in detail, and for four years. You need to be flexible, a lot of things won't work out, you need to look ahead and above all draw the lines you won't cross.

Is there a chance you yourself are going to run for chairman of the party after all?

I can tell you that I don't have such a plan, and that I won't run for party chairman. I leave that to younger people.

Do you hold a grudge against IRL and the Social Democrats?

What grudge? Anger isn't much help in politics. I don't hold any grudges. In a sense they took a very risky step offering the Center Party the position of prime minister, IRL got the presidency (President Kersti Kaljulaid is a former IRL member and after her election staffed her office mostly with IRL or ex-IRL people; ed.), and with that the coalition changed.

And the Reform Party slipped off into opposition.

This still isn't worth a grudge. You have to be able to look in the mirror. The liberal worldview is to first contemplate your own mistakes, and only then accuse others.

How likely do you think is a coalition of Estonia's two liberal forces, the Center Party and the Reform Party?

It would be extremely stupid to exclude the possibility. I don't think we should say which other party we won't work with. I wouldn't exclude it, I've been in government together with the Center Party. Only for a short time, granted, but we got quite a lot done.

You've said about currency reform that this was an Estonian project with Estonian substance. Do you see something of the kind today?

Estonia has plenty of substance in the area of IT. But that's the public sector, where we're number one with our e-solutions. I remember very well how 2001 the coalition's minister of the interior brought up the ID card project, and I as minister of finance wasn't his most enthusiastic supporter because the sum it required was relatively sizeable. Everybody agreed that we would introduce the ID cards, but whether or not we would include the chip, that's something we debated, because there was no application for it at the time. But we went for it, and that was an important decision that has great influence still today.

At the moment we see a lot of opposition against bigger projects, whether Rail Baltica or the new pulp mill planned for Tartu County...

... and the wind parks as well. We need to pay attention to the fact that these projects are for the future and for future development which a younger generation will profit from. A lot of the arguments brought against these projects are absurd. There are questions, of course, but some of the points against Rail Baltica, for example that it splits the country in two... What's that supposed to mean, splitting Estonia in two?

Well the railway will run north to south, through Estonia.

What, does that mean the Tallinn-Tartu highway also splits Estonia in two?

The railway is a lot wider.

Twice narrower! Don't forget, it's twice narrower than the Tallinn-Tartu highway. If you drive past Kuivajõe, say, there are tall concrete walls on either side. The railway is twice narrower.

What's the problem, then? Was too little explaining done?

I don't know. I don't know where the idea comes from that Estonia's countryside will be dug up and destroyed, like it never happened before that a railway was built through a swamp.

When Rail Baltica's supporters gather, they debate and fight as well. That's the younger public, though. They discuss how the Ülemiste shopping center will need to be changed, which industries the railway will help develop, what to move where, the Finns are very interested.

Some think about the future, others are afraid of that same future. Nobody knows anything yet about the pulp mill planned in Tartu County, but plenty of people are outspoken about their objections, forgetting how much technology is regulated today. So you throw your hands up in horror and talk to those who make the decisions, the Riigikogu, the government, the local councils.

And there's where the rift between political decision makers and common folk becomes apparent...

Good question.

Power alienates people.

Absolutely true, but where do you take the solution from? True though. We've seen it with Trump and Brexit.

How long will the current phase of economic growth last?

The current growth rate comes as a surprise to us all. The European economy is gigantic, and when growth picks up, it lasts for a while. In Estonia as well, if nothing bad happens. We're in a period of economic growth at the moment. Whether this will continue at 4 percent, I don't know, but it could go on at a few percent anyway.

There's no straightforward risk of a crisis to be seen at the moment. Though who knows, perhaps I'll have to explain a year from now what went differently anyway. The economists always have something to say about what's coming, and afterwards why it didn't turn out the way they expected.

If you think back to your office at the European Commission, does it worry you that the European Central Bank is buying bonds? Is it time to put an end to these programs?

Nothing bad has happened so far. One option is to say, within the limits of one's knowledge, that bond issues are a bad things, the Germans for example have been very critical of it. The other option is to trust the European Central Bank and Mario Draghi. There are very smart people at work, they won't let things get out of hand.

Will London and Brussels come to an agreement regarding Brexit?

The question is whether or not the Brits will give in. 27 member states won't make any concessions to the United Kingdom. If the Brits can't get arranged with this, then the EU will lose out on €50 billion in 2019, but will get its money back several times over through tariffs, adding 10 percent to the fees on private cars and 20 percent to the fees on trucks. Nissan has already talked to the British prime minister, they could move their production away from the UK. In a nutshell, if the Brits don't agree with the EU and a hard Brexit should happen, Europe doesn't stand to lose a lot. The truth is that the EU can make things very difficult for the UK.

Of course you can say that the Brits were never really EU members and never really wanted a strong European Union. They wanted to be in to keep the EU from interfering with their foreign trade.

Will there be a Brexit at all, or will the Brits simply hold a new referendum that will keep them in the EU?

They're talking about it, but I don't believe so. Democracy in Britain and elsewhere has recently been weakened, they can't get to such a decision, can't decide at all. The likelihood of the Brits leaving without an agreement is certainly great. Even if there is agreement on the conditions of Brexit, the next step are trade negotiations, and in those the EU won't move a millimeter. What matters there is that the EU has a population of 500 million compared to Britain's 60 million.

What's going to happen to Catalonia?

I think that they'll remain in Spain. It was clear from the beginning that the Spanish government under Mariano Rajoy or anyone else is ready to see to this by force, including the possibility of a civil war. There is no Spanish government that would be ready to let Catalonia leave.

Imagine you're the prime minister, and you're about to enter history as the prime minister who ceded Catalonia. They're not going to do it. Of course using force is always a bad idea, and hopefully they'll find another way, but it takes two to tango.

You've been critical of the Estonian presidency of the EU council. Why?

Everybody is saying that the officials did a good job, that Estonia left a really good impression, as always. That's a plus. There have been a great deal of presidencies that were badly organized, where you would end up waiting for the bus on some street corner. Estonia did very well here. But there hasn't been a political breakthrough.

What about the Tallinn Digital Summit?

I might believe it if I could see it, but it isn't clear what our digital footprint is in this issue. That everybody went around with computers, that's nice. But what has the Estonian presidency really achieved or carried out? When Lithuania presided over the EU council, the association agreement with Ukraine was signed, a great idea that was eventually derailed by [Ukrainian president] Janukovych that everyone connects with the time of the Lithuanian presidency.

The Posted Workers Directive was adopted under the Estonian presidency.

Hold on. People forget that the four freedoms (of the European Single Market, the free movement of goods, capital, services, and labor; ed.) were defined already in 1957. The free movement of labor has been the most contested throughout the years. [The directive] is a great victory of its opponents, and a principal one.

It's not that we're worried about our low salaries. The question is in the free movement of labor, and free choice looking for work. I agree that [French president Emmanuel] Macron needs to be supported, he really is a dynamic leader, and we're talking about one of his demands. But [the directive's] limitation of the free movement of labor will remain, nobody will go back on it. I can't go to France as freely anymore and offer my skills to an employer there. It's a great thing in theory that I'm getting paid as much as a local, but nobody is going to hire me anymore.

Editor: Dario Cavegn (editor and translator)

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