Academic journal article Demokratizatsiya

Reminiscing with the "Father of the Kroon": Interview with Siim Kallas

Academic journal article Demokratizatsiya

Reminiscing with the "Father of the Kroon": Interview with Siim Kallas

Article excerpt

There was something different in the eyes of Prime Minister Siim Kallas the November day that I went to interview him in his Tallinn office. There was still the drive and determination I remembered from when I worked for him several years back. However, there was something noticeably different--a look of sheer anticipation. This is not too surprising, considering he was off to Prague to receive Estonia's invitation to join NATO in the following week and to Brussels to gain the invitation to the European Union soon after in December. Estonia has symbolically completed its journey to "return to the West" under his watch.

The role played by Siim Kallas in the reform and development of Estonia cannot be underestimated. Known primarily as the "father of the kroon" for introducing the national currency against international advice, Kallas has many of the most significant achievements of Estonia's spectacular reform under his belt.

Born in 1948, Kallas rose through the bureaucracy to become deputy editor of the newspaper Rahva Haal. His first major contribution in the reform process came during the late Soviet days when he and three others proposed the so-called Isemajandav Eesti, a program of economic self-management to move Estonia away from the Soviet Union. Not coincidentally, the plan was known by its initials, IME, which means "miracle" in Estonian.

Siim Kallas was appointed the governor of the Bank of Estonia in 1991. Ambitiously moving the central bank immediately upon taking office, Kallas worked to give the country true independence from the Eastern empire with control of its own monetary policy. He introduced the kroon (the name of the Estonian currency that was illegally decirculated by the Soviets in 1940 upon military occupation) in 1992. Estonia was the first post-Soviet state to make such a move. With the help of returned assets hidden by friendly countries for over five decades, the new currency, which was pegged to the German mark, was fully backed. The kroon has remained totally stable since that day, never succumbing to revaluation, giving Estonians confidence to pursue economic activities.

After departing from the central bank in 1995, Kallas founded the Reform Party, a center-right party focused on liberal laissez-faire economics. Campaigning on less government and lower taxes, the Reform Party became one of the most successful parties in the country, playing a major role in most of the governing coalitions since 1995. The Reform Party also played a major role in Liberal International, the international grouping of parties pursuing similar economic policies, and reclaimed Estonia's seat in the organization that it helped to found during the interwar independence years.

From 1995-96, Kallas served as foreign minister. During this short period, Kallas managed to accelerate Estonia's European integration process. Under his watch, the energetic and youthful team in the Foreign Ministry put together the responses to the official EU questionnaire that eventually led to Estonia being included in the front-runners group to join the bloc.

After a period as an opposition MP, Kallas returned to the cabinet as finance minister in 1999 in a three-party, center-right coalition. His most remarkable achievement during this period was to meet his major campaign promise--to eliminate corporate income tax. But when the coalition crumbled in early 2002, Kallas worked out a deal with the opposition Center Party to put together a caretaker government until the next elections in March 2003. This propelled Kallas to the top job, and he soon became prime minister. As noted earlier, Kallas brought Estonia its coveted invitations to join both NATO and the European Union during his watch, and in Washington he became one of the most prominent and named allies of U.S. President George W. Bush's foreign policy.

Since the time this interview was conducted, Kallas chose to return to the Riigikogu as a member of parliament, despite his party's strong showing in the March 2003 elections and its participation in the current ruling coalition. …

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