Parlt appoints Mart Laar chairman of Bank of Estonia supervisor

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Photo: Peeter Langovits

The Riigikogu on Tuesday appointed twice former prime minister and former minister of defense Mart Laar as chairman of the supervisory board of the Bank of Estonia effective from June 13.

The appointment of the Pro Patria and Res Publica Union (IRL) MP to the post was endorsed in the 101-seat chamber with votes 46 to 34 and four abstentions in a secret ballot. Ninety MPs were present during the vote.

The five-year term of the current chairman of the Bank of Estonia supervisory board, Jaan Mannik, ends on June 12.

Laar did not appear before lawmakers ahead of the vote.

President Toomas Hendrik Ilves presented the bill to appoint Laar chairman of the central bank's supervisory board on April 9.

Chairman of the parliamentary finance committee Sven Sester said that during a hearing of Laar in the finance committee at the beginning of last week some "three to five questions were put" to the candidate. "Of these three to five questions half were not related to economic or monetary policy to my view," Sester said.

The MP also said Laar told MPs he was ready to meet with all party groups to answer their questions, but that possibility was used only by the association of Democrats.

In the discussion the preceded the vote, Reform Party MP Aivar Soerd said that like it was briefly said in the finance committee, two directions could be observed in the central bank as regards the choice of tools for solving the debt crisis.

"Is the central bank's intervention in the bond market, alongside the plan to return tol Greece the interests earned by the central bank, an example of left-wing governance or right-wing governance of the central bank?" Soerd asked.

Sester said the governor of the Bank of Estonia, Ardo Hansson, has told the finance committee that the limit to which the central bank could participate in purchases of national treasury bonds had been reached.

Speaking on behalf of IRL, MP Kaia Iva said that monetary policy requires statesmanship, the ability to assert oneself, and conservatism, and wished Laar continued strength and stamina in his new position.

The chairman of opposition Social Democrats (SDE), Sven Mikser, said in his remarks that while Social Democrats, too, wish Mart Laar strength and stamina they cannot back his candidacy for the post of chairman of the Bank of Estonia supervisory board. He said this was due to SDE's belief that governance of the Bank of Estonia should not be politicized.

Mikser said that the chairman of the central bank's supervisory board has "mostly, but not always" been a member of the supervisory board from the academic community, the supervisory board representing a balance between academic and political members. He said that since re-politicization of the office of governor of the central bank failed when Ardo Hansson was chosen to succeed Andres Lipstok, a governor with Reform Party background, one is now seeking to increase political control over the central bank through the supervisor.

Mikser expressed SDE's dissatisfaction with the president's decision to nominate a politician for the post of chairman of the Bank of Estonian supervisory board despite his promise of the opposite made to politicians last year. SDE is, however, content with the recent appointments of Alar Karis as auditor general and Priit Pikamae as chairman of the Supreme court, the party leader added.

The chair of the opposition Center Party group, Kadri Simson, denounced what she called "party political agreement" by which the appointment of Laar allegedly took place.

Both Mikser and Simson criticized Laar for not leaving IRL after the appointment. Simson recalled that Mart Rask, former minister of justice, left the Reform Party when endorsed as chairman of the Supreme Court, while Andres Lipstok also left Reform after becoming governor of the central bank.

Laar told BNS last week he wouldn't answer the journalist's questions about monetary policy before taking up the position of chairman of the Bank of Estonia supervisory board.