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Seeder: Feels like Bank of Estonia has formed new party

Isamaa chairman Helir-Valdor Seeder.
Isamaa chairman Helir-Valdor Seeder. Source: Ken Mürk/ERR

Coalition party Isamaa chairman Helir-Valdor Seeder criticized the Bank of Estonia's press release and info hour about the pension reform on Monday, finding that the central bank's actions have begun to resemble those of a political party.

"To be honest, I can't understand why the Bank of Estonia published a press release without analysis right now, and the analysis — as I understand it — will be published only in November," Seeder said, speaking to ERR. "This leaves the impression that a new party has been formed in Estonia, which is politically intervening in policy and issuing press releases."

The country has already seen repeatedly how the Bank of Estonia has attempted to justify its initial position ex post facto and cement it into society, he continued.

"When the government coalition decided with its coalition agreement to make the second pension pillar voluntary, the Bank of Estonia's reaction immediately followed, which was emotional and not based on the analyses," Seeder told Uku Toom. "Now it is trying with its various little conferences and press releases to cement this message after the fact. But there is no analysis yet. The current one is just one example — a short press release, but there is no analysis."

According to Seeder, the Bank of Estonia's brief analysis published in press release form doesn't include anything new compared with prior positions.

"The message at this press conference was that the full analysis of the pension system will be completed by November," he said. "The question then arises: why did they have to hold a press conference that presented neither the analysis nor a shred of new info? Once again, all we heard were claims that the second pension pillar must be reformed and modernized, and that the second pension pillar must be retained."

He also found that the results of the Bank of Estonia's published summary indicate that the conditions of its analysis are faulty.

"The Bank of Estonia's evaluation that 'The mandatory pension, or second pension pillar, would disappear upon the implementation of the government's amendments' is not true," Seeder said. "The Bank of Estonia's claim is made all the stranger if we consider the fact that they attempted to gauge the effects of 10-30 percent of people exiting the second pension pillar. This in itself demonstrates that the Bank of Estonia expects that the majority of people will continue saving and investing."

According to the party chairman, 17 years of practice has shown that the compulsory second pension pillar system as currently in place has not justified itself.

"This is stronger than any sort of theoretical analysis," he continued. "17 years of practice has demonstrated that we need a serious reform, not just fine-tuning. And I believe that the path agreed upon by the coalition, to move forward with the second pillar being voluntary, has already had a very big positive impact. If we look at banks' behavior, funds' behavior, responses to the Bank of Estonia's own activity, the effects of the pension reform actually being analyzed — this alone already has a positive impact."

Centre still backs reform

The Centre Party stands with Isamaa in not wanting to abandon the planned pension reform.

"The Government of the Republic agreed today to move forward with the second pillar reform," Chairman of the Social Affairs Committee of the Riigikogu Tõnis Mölder (Centre) told Aktuaalne kaamera on Monday. "We will have to thoroughly discuss all analyses, but right now I see no reason to stop this reform based on this initial analysis."

Aktuaalne kaamera did not manage to get any comments from the coalition Conservative People's Party of Estonia (EKRE) regarding the matter.

The Reform Party, Estonia's biggest opposition party, however, is not in favor of the plan to make the second pension pillar voluntary.

"We should not be moving forward with this plan in any case, because as the Bank of Estonia's analysis indicated, this won't bring about any long-term benefits for Estonia's pensioners, and it will likely increase the tax burden as well as immigration pressure," Reform Party parliamentary group chairwoman Kaja Kallas said.


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Editor: Aili Vahtla

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