Mart Laar: Estonia has an advantage over Europe in crisis

Mart Laar.

PHOTO: Liis Treimann

Crises cannot be solved based on fixed ideas as creative solutions are required, Mart Laar, former prime minister, chairman of the supervisory board of the Bank of Estonia who turns 60 today, says.

How have you been spending your time during the emergency situation?

When I am not doing banking work or writing books, I like to spend time on my balcony and in the garden as fresh air and silence are plentiful in the quiet Kassisaba district where I live – the nearness of the city center cannot really be felt here.

What is your opinion of the government’s handling of the crisis so far? Would you have done something differently?

It would be more than peculiar for former prime ministers to start lecturing incumbent governments today. The time for assessments will come after the crisis.

However, I can still commend the government. If only for managing to stay calm and make decisions. Decisions can go wrong during a crisis, but even a mistake is better than endless dawdling. The worst decision is failing to make one.

Having served as prime minister twice, your governments had to make difficult and unpopular opinions on both occasions. It was inevitable and anticipated in 1992 and 1994 as the state needed to get off the ground, while you also had to put together a negative supplementary budget right away in 1999 as economic growth had slowed. Should the government have cut the budget in addition to borrowing now?

I happened to be prime minister during crises both times and have some experience solving them.

The first lesson is that crises can be fundamentally different, which is why there is no one recipe for solving them. The crisis today is fundamentally different from the previous economic crisis, meaning that ways for solving it are also different.

This is the first time so many countries find themselves in crisis together and the first time that ties between them have been severed to such a degree.

The second thing I have learned is that crises cannot be solved based on fixed ideas, solutions must be creative. The circus revolving around the work permits of foreigners who got stuck in Estonia is a good example. That is why the Bank of Estonia has supported borrowing to overcome the crisis.

Estonia has an advantage over most European countries as its governments have managed to keep public debt low even during previous crises. While I sympathize with countries that are having serious problems in the current crisis, the saying about reaping what you sow comes to mind.

You wrote in the April 8 issue of Postimees that the first month of the crisis was enough to demonstrate how alone Estonia is in the world. Are you still pessimistic in terms of European cooperation and only consider working with the other Baltic countries realistic? Why not also Finland and Poland?

Despite all of these problems, I am not pessimistic about cooperation in Europe as it is working better than cooperation between nation states even now. However, the Baltics are still our closest partners in the EU.

While there might have been a time when it seemed the prime minister’s first visit should be to Finland, it should really be to Latvia. That requires a much greater contribution to Baltic cooperation. I have nothing against closer ties with Finland and Poland – it was the dream also in the 1930s – but it just won’t amount to much. The crisis at hand made that abundantly clear. If we do not give up this wishful thinking, we will find ourselves in a situation where we will have cooperation neither with Finland nor Latvia.

What is wrong with the EU to make its resilience in crises so poor? While the migration crisis really put European togetherness to the test, the situation today seems worse still. Why would it pay to trust more in NATO?

European integration has historically worked through crises and the lessons learned there. If during the migration crisis, the EU achieved very little, the recent flood of refugees was met with a much more effective response. As concerns NATO, its back is always against the wall. NATO cannot fail to help a member because it would be the end of the organization. The European Union on the other hand survived one of its most influential members leaving, while it remains to be seen whether the latter will too.

What is your opinion of the decision by the Conservative People’s Party (EKRE) to remove foreign trade and IT minister Kaimar Karu from office because he is not a member?

The person not being a member of the party cannot possibly serve as the primary reason for removing a minister. Estonia has had several ministers who have not wished to join parties. The main thing is for the minister to be familiar with the field and work hard.

How should Estonia plan its exit from the crisis? What do you feel should be kept in mind?

Exiting the crisis needs to be planned calmly and gradually. The situation in other countries needs to be monitored and steps coordinated – no one will be able to exit this crisis alone. Every action needs to be carefully considered.

In your Postimees article, you propose four priorities for Estonia for the post-crisis period. They are catching up to the world in terms of IT development, preferential financing of research and development, especially by boosting higher education funding and development of e-medicine and the Estonian Genome Project. Why these particular things and would you like to add anything to the list?

I highlighted these avenues not only because they have the potential to be international breakthroughs but largely because they have been overlooked recently. Rather, people tend to see sinking money in concrete as the best way out of the crisis.

I remain doubtful in terms of whether it is possible to solve a 21st century crisis using 20th century methods. In other words, by believing in the omnipotence of the state. State intervention, private companies relinquishing control to the state either partly or in full is seen as some sort of magic wand that can save them. I must admit that I’m much more partial to a national conservative attitude than a national socialist one.

Should Estonia make crisis aid available to Tallink?

I know too little in terms of details to speculate on why it was necessary to support Tallink but not some other companies. Those are government decisions and I don’t want to stick my nose in there.

Everyone knows you are always writing another book or several even. What are you working on today?

Your intelligence is correct. I just sent to print the second part of my memoirs “Ajaga võidu” (Race Against Time) that tells the story of Isamaa’s second government in 1999-2002, which is when Estonia was invited to join NATO and the beginning of the e-state. Because my memoirs seem to have sparked interest in Finland, the publisher has asked me to write something about Estonia in the Second World War.

What are your plans for when you are no longer Bank of Estonia supervisory board chair in 2023?

I will be honest and say that I do not concern myself with what I will be doing three years from now. The gods laugh when man makes plans. One needs to accept what’s coming, do one’s best and remain oneself. I dare say I will manage the latter. After all, I have so far.

To still try and answer your question, I suppose (or rather wish?) I will be involved with some major project I have been dreaming about for some time. For example, “The fight for memory in Estonia during the Soviet period.” My daughter and I have been thinking about an Estonian memorial sites book for some time and even done some interviews.

Anders Aslund has outright demanded I write a book about Central and Eastern Europe’s switch to market economy. My American and Polish friends have pointed out that “War in the Woods” has been all but sold out, while the world still lacks a book on armed resistance in Central and Eastern Europe after World War II.

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