Interior minister confirms government ESM difference of opinion

Interior minister and deputy prime minister Mart Helme (EKRE).
Interior minister and deputy prime minister Mart Helme (EKRE). Source: Government Office.

Interior minister Mart Helme (EKRE) says that there are differing opinions on the European Stability Mechanism (ESM) and its reform, within the coalition government.

As reported by ERR News, finance minister Martin Helme (EKRE) unilaterally stated his desire that Estonia have a veto at the ESM, a Eurozone bailout program, at a meeting of finance ministers last week.

Prime Minister Jüri Ratas (Centre), as well as culture minister Tõnis Lukas (Isamaa) had both said that the government's official line was for no veto, effectively spelling a governmental split on the issue.

Members of the Riigikogu's European Union Affairs Committee (EUAC) asked Martin Helme for clarification on his stance earlier in the week, noting that the government's official line dated back to the previous coalition government, which had been approved by the EUAC to be bounced back to the current government. Thus it was implied Martin Helme had overstepped his powers on the matter.

Martin Helme a lone voice abroad

"What I can say is that in this government, there is a difference of opinion on the topic," Mart Helme, father of Martin, and also EKRE leader and deputy prime minister, said at the regular governmental press conference Thursday, ERR's online Estonian news reports.

"What I can say is that our party (ie. EKRE) does not at the moment support the ESM's reform, assuming unity on the issue evaporates," Mart Helme added.

"This is the current situation. But what the state of play will be when it comes to ratification, I can't right now say," he added.

Martin Helme had dissented on the condition of an 85 percent majority of votes needed in order for bank recapitalization bailouts in Eurozone countries to be carried out, at the finance ministers' meeting last week, but was a lone voice on the matter.

The bank recapitalization actions should only be taken if the roots of a crisis situation are primarily located in the financial sector of the country in question, and not directly related to fiscal or structural policies at state level, with the government seeking to finance a recapitalization at sustainable borrowing costs.

Moreover the ESM, according to its regulations, only offers a bank recapitalization support package if it can be established that neither the private market nor the member state will be able to conduct the needed recapitalization alone, without causing increased financial stress/instability.

Bailout programs initiated by the EU since 2008 for Eurozone member states have aimed at helping Cyprus and Greece (both twice), and Ireland, Portugal and Spain once each. Additionally, non-Eurozone bailout packages have been issued.

Centre originally opposed the ESM

Prime Minister Jüri Ratas rejected Martin Helme's record of disagreement and promised to approve the reform of the ESM at the Eurozone Summit this Friday. Ratas told daily Postimees Wednesday that Martin Helme should not have voiced his opinion without consulting him first, though added he understood the finance minister's caution in the matter.

For his part, Martin Helme said he was standing up for Estonia's position, and unfamiliarity with a minister doing this was at the root of much of the criticism of his actions.

The ESM, established in 2012, is based in Luxembourg and is a permanent safeguard on the Eurozone, with financial assistance programs for Eurozone member states when in financial difficulty, up to a maximum lending capacity of €700 billion.

Centre's present-day apparent support for the ESM goes against the party's stance when it was unveiled in 2012. The party, in opposition at the time, put forward a motion at the Riigikogu to reject the mechanism's original ratification in August of that year. The motion was defeated in the chamber.

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Editor: Andrew Whyte

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