Tales of the unexpected

Siim Kallas has been Estonia's prime minister for barely four months, and already he has gained a solid, pragmatic reputation around the country. But he had to make a few unexpected twists and turns to get there. Interview by Howard Jarvis.

Estonia's center-right three-party coalition government, made up of Prime Minister Mart Laar's Pro Patria Union, the Reform Party led by Siim Kallas, and the Moderates, was already on the way out.

When the decision was made last December that the Reform Party would desert the Tallinn City Coalition, made up of the same three parties, and strike up with the large opposition Center Party led by populist maverick Edgar Savisaar, total collapse was inevitable.

The Tallinn coalition fell, Savisaar became city mayor, and Laar resigned, leaving it to Kallas to form a coalition with Savisaar at the national level. But the strange alliance will be tested in local elections in October and national elections next year.

At the end of last year you shocked a lot of people by doing a 180-degree turn, from being part of a rightwing coalition to forging an alliance with a populist center-left party. What made you take such a radical step?

The big question that concerned my party and myself was the budget in Tallinn, which was too extensive. We could not accept this. Our party was completely exhausted, it needed a change. But we didn't resign, our partners did. This is important, because even today I would have preferred to keep the old coalition until the next elections.

In 1996, when we also fell out of a coalition government, our party lost support; our supporters prefer to have us in power. So, we had to find new ways to form another coalition. The Center Party had waited for this opportunity for several years. They were ready. The coalition negotiations were tough, very intensive. But the main question was, could we find a balance. We did. My main task today is to keep our coalition agreement working.

For them, it sets priorities like additional money for pensions and schools, and for us there is a balanced budget and keeping the existing tax system. We agreed to postpone changes to the tax system until the next elections.

The balance is there. Some complain it's a Reform Party-dominated coalition, others say it's Center Party-dominated. We say it strikes the right balance.

But don't you think your parties are, ideologically speaking, poles apart?

Yes, they are different. But the crucial thing is we can agree. In some ideological matters, the Center Party is closer to us than the Moderates were. When we proposed the idea of a balanced budget, they said it had never been an issue. The Moderates, meanwhile, had always attacked the idea that the budget must be balanced. The Center Party also said they had nothing against low taxation. We were surprised we could reach a compromise so easily. At first view, we may seem contradictory parties. But there has been no desertion of supporters from either party.

So no traditional Reform Party supporters have run screaming at the sight of Edgar Savisaar?

We were initially a little afraid that we would lose support. We did a little market research and had discussions, and actually discovered no one was against it.

Did you lose anyone to Pro Patria?

No, vice versa. Our support actually increased. For the Center Party, it was hard to accept the 2 percent of gross domestic product for defense spending required by NATO. What may be a source of contention is the budget for 2003. We shall see.

Is this a coalition to last, or was it just a quick fix in a time of crisis?

We don't exclude the Center Party from any future coalition. But now we're in government we'll try to have a good election campaign. You don't go into elections thinking, "We will go into a coalition with this party, but not that party."

Many would describe Savisaar as an uncompromising personality. Can he be difficult to deal with?

In politics you cannot find a simple and smooth person. At this stage, as mayor he is very involved in managing the city, while I am very involved in managing governmental activities. So this has separated our activities quite a lot.

There's still 28 percent of the electorate who support no party at all. How will you motivate them before the local elections?

Almost 50 percent of people were undecided before the French presidential elections. It's normal that much of the electorate are busy with other matters and don't think these issues are so important. If things are going smoothly, it's logical a large proportion of the population feels indifferent to what's going on.

A year ago when I interviewed Mart Laar here at the prime minister's office, he said he had plans to focus on regional development, which had largely been ignored up to that point. It still is ignored - high unemployment in the northeast, failing industry.

I have visited Narva several times, and there are at least three very successful and advanced companies producing excellent goods and employing a large number of employees. But there is not enough skilled labor. I've cycled, actually, to remote areas of Estonia, and there are no small shops, let alone hotels. But you can also find areas that are very well developed.

Success can be achieved despite poor communications and a lack of roads. All countries, sadly, have places that get left behind in the process of change.

The geopolitical scene has altered completely since Sept. 11. Now it's likely that the Baltics, once in NATO, will have to work closely with Russia in ensuring stability in the region and cooperating militarily. There must be huge skepticism in Estonia about that.

It's good we don't have any hostile rhetoric in the country. Being a point of conflict between NATO and Russia is a very painful issue. Seeing that Russia has developed a closer relationship with the Western alliance makes our situation tremendously easier. Being such a small nail between two big powers has several hazards. We welcome the recent developments, and believe it will help our goal to become a member of NATO.

Your Foreign Ministry described Eurovision as a billion-dollar publicity campaign for a small country. Is it really as great as all that?

Well, concerning the number of interviews given to important foreign journalists this week, no doubt Estonia has never been so recognized as an existing country and Tallinn never so recognized as an existing town. No matter what your critical attitude to the musical side of the contest, this is a huge showbiz event. When we started to arrange the event we had painful discussions about funding and so on. Only now it's here will we discover if it was all worth it.