Estonian Prime Minister Kaja Kallas had to resign at the very beginning of a scandal involving her husband, whose business has contacts with Russia. This was stated by Estonian President Alar Karis, calling the situation a “serious crisis” and a “moral problem.” According to media reports, Callas provided a loan of €350 thousand to Novaria Consult, through which her husband owned a 25 percent stake in the logistics company Stark Logistics, which continues to transport goods to Russia. Last week, Callas expressed regret over the situation, but said she had no intention of resigning. However, analysts believe that this scandal could cost the career of the current prime minister, who previously called for a complete severance of relations with the Russian Federation.
Estonian President Alar Karis said that Prime Minister Kaja Kallas should have resigned at the very beginning of the scandal involving her husband, whose business has contacts with Russia.
“I would prefer that the head of government resign at the very beginning of this chain of events that led to a serious crisis. This would save herself, her loved ones, the efficiency of the government and the credibility of the messages that Estonia sends to the world. But everyone in such a situation makes their own choice, assessing the seriousness of the moral problem,” the ERR portal quotes the Estonian president.
According to Caris, the Callas scandal is “a regrettable incident.”
“I don’t want to put myself in the shoes of the prime minister, but if I were the head of government, I would most likely have reacted faster and made a clear decision,” he said, adding that the problem would not have gone away, but it would not have gone away either. would escalate to the point where the president has to discuss this topic during meetings with foreign colleagues.
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Karis recommended that the Estonian Prime Minister come to Kadriorg, the residence of the President of Estonia, and “talk about this issue.”
Kallas later attended an extraordinary meeting of the special commission of the Riigikogu (Estonian parliament) to combat corruption, where she was asked, among other things, when exactly she issued a loan to her husband Arvo Hallik’s company and was asked to familiarize herself with the loan agreement.
According to media reports, we are talking about the fact that Callas provided a loan of €350 thousand to Novaria Consult, “through which Hallik owned a 25 percent stake in the logistics company Stark Logistics,” which continues to transport goods to Russia.
Kallas was unable to answer the special commission’s question, but promised to provide a loan agreement and soon did so.
“The politicians of EKREIKE (the common name for EKRE, Isamaa and the Center Party. – RT) may be surprised by my step… No matter what I answer them, they, like an old gramophone record, will repeat that my answers do not satisfy them,” Callas quotes ERR. “Because at the moment, the witch hunt is the only goal of the game for opposition politicians.”
Earlier, the leader of the Estonian Conservative People’s Party (EKRE), Martin Helme, said on Vikerraadio that Kallas can no longer be prime minister.
“A week ago, Kaya Callas should have said that she behaved incorrectly and cannot continue to hold this position… And the longer she clings to it (her chair – RT), the more expensive both her own reputation and the reputation of the Party will cost her in the end reforms, Eesti 200 and the Social Democrats and ultimately also the functioning of Estonian democracy. Therefore, the sooner this horror, which we now call the Kai Kallas Russian money scandal or the Russian business scandal, ends, the better for all of Estonia,” ERR quotes him as saying.
According to Helme, the Estonian Prime Minister says that Estonia should not do business with Russia, but that it itself is “a participant in this business through its investments.”
Meeting of the Estonian Parliament globallookpress.com © Erik Peinar / Parliament of Estonia / Xinhua
Details of the scandal
Let us recall that in August the ERR portal reported that the transport company Stark Logistics, partly owned by Callas’ husband Arvo Hallik, still continues to transport goods to Russia. At the same time, the material mentions Kallas’ statement that “no business relations should be conducted with the Russian Federation.”
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“I continue to hold the view that any business with Russia should cease as long as Russian aggression in Ukraine continues. And, as far as I know, my husband did this a month after the start of the war (Russian special operations in Ukraine – RT), said Kallas.
At the same time, she confirmed, citing the words of her husband, that at the moment the service is provided “to only one Estonian company and this project is also in the last stage.”
Answering a question from journalists, Callas clarified that she did not ask any questions when she gave a loan of €350 thousand to her husband’s company.
“I trust my husband. If he asks for a loan, then I give this loan if I have the opportunity to give it. Just as banks are not responsible for the business for which a loan is given, I am not responsible,” ERR quotes her as saying.
However, all this information caused a great resonance in Estonian society – opposition politicians demanded that Kallas resign.
Last week, the Estonian prime minister said that she regrets the situation with her husband’s business affairs related to the Russian Federation, but does not intend to leave her post.
“There should be no illusions”
As Evgeny Semibratov, deputy director of the Institute of Strategic Studies and Forecasts of RUDN, lecturer at the Knowledge Society, noted in a conversation with RT, Estonian President Karis is now trying to save his reputation in a situation where Prime Minister Kallas, who “so zealously” advocates an anti-Russian course, has found herself involved in her husband’s business affairs related to Russia.
“Karis wants to reduce the negative risks for herself that the scandal surrounding the prime minister and her husband caused. Despite Callas’s attempts to justify himself, I am sure that representatives of the opposition will try to spin this scandal even more. It cannot be ruled out that when they delve into the details of Callas’s husband’s business, they will find a lot more interesting things that could further discredit this family in the eyes of Estonian politicians who are concerned about maintaining the degree of Russophobia,” Semibratov said.
Prime Minister of Estonia Kaja Kallas globallookpress.com © Keystone Press Agency
According to him, Callas herself has long cultivated an anti-Russian course, including calling for a complete severance of relations with Russia and its isolation.
“Russophobia has long become a state-forming idea for the Baltic countries, and long before the start of the Northeast Military District in Ukraine. Therefore, it is clear that any scandal when one of the country’s leading politicians is involved in business matters relating to Russia will have very serious political consequences. And now this scandal could really cost the career of the current head of the Estonian government,” says Semibratov.
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A similar position is shared by senior researcher at IMEMO RAS Sergei Rekeda. At the same time, he believes that the statements of the President of Estonia about the desired resignation of Callas “will not play a key role in this story.”
“In the Estonian political system, the figure of the president is rather nominal; he performs mainly representative functions. His words are more of a recommendation for the real managers of Estonia, including Prime Minister Kallas, who actually heads the state in a parliamentary republic,” Rekeda explained in a commentary to RT.
He also noted that, while building a foreign policy in opposition to Russia, the ruling class in Estonia, closely associated with business, “often made money on Russian transit.”
“These ties did not stop, despite even the most acute and aggressive statements regarding Russia. Baltic business has always tried to make money from its proximity to the Russian Federation,” Rekeda noted.
According to analysts from the American Institute of International Finance (IIF), despite anti-Russian rhetoric, the Baltic countries, including Estonia, increased exports to Russia in early 2023, bypassing sanctions: supplies completely returned to pre-sanction levels.
“The Baltic countries are a hotbed of direct and indirect exports to Russia through Central Asia. They say they can’t reduce it because of the geographic proximity and all the trade connections that entails,” said IIF chief economist Robin Brooks, calling it an “disgrace.”
Tallinn business district Gettyimages.ru © Cavan Images
For his part, Sergei Rekeda noted that business in the Baltics is quite closely integrated with the political elite.
“There should be no illusions here: the family of the Prime Minister of Estonia could well have made money from the connections of their business with Russia under the guise of various schemes, which were relied upon as a kind of protection for the reputation of the Prime Minister. Kallas is still trying to present the situation to the population in a more favorable and neutral light,” he said.
Given these tactics of the Prime Minister, it is already clear that Callas will not want to resign, Rekeda predicted.
“This scheme with businesses related to Russia has worked for years. And now Callas will hope that when the information noise subsides, her husband’s company will be able to continue working. But as for the prime minister himself, given that the Russian factor was involved, under pressure from the parliamentary opposition she may be forced to resign,” concluded Rekeda.