A threat to Estonia’s long-term priority of enlargement?

1. How does the future of the EU after the Irish ‘No’ look like?

 

Attitudes towards the EU in Estonia must be interpreted in the context of the economic crisis that hit Estonia full force in the end of 2008 (GDP is forecasted to decline by 5.5 percent in 2009). In this context, membership in the EU is seen as a source of stability. In a recent speech to the Parliament on the government’s EU policy, Prime Minister Ansip called on the public to reflect on the situation that Estonia would be in today were it not a member of the European Union. According to Ansip, it would be clear that in that case: “Estonia’s security would be more fragile, the economic decline would be deeper and it would be inappropriate to use the word welfare to describe the ability of the citizens to cope economically. All European countries that do not belong to the EU, be they more prosperous than Estonia, such as Iceland, or poorer, such as Moldova, are having a harder time today than the countries that are members of the Union”.[1]

This sentiment appears to be shared by the general public: according to the recent Eurobarometer survey, Estonians are more confident than any other nation in the EU that their country has benefited from being a member of the Union (78 percent responded affirmatively to this question).[2]

The Estonian Parliament ratified the Lisbon Treaty on 11 June 2008 (one day before the Irish referendum) and the domestic ratification process was completed a week later with the President signing the relevant legislation. The Irish referendum result was perceived as a disappointment but Estonia’s leaders have insisted that the decisions of the Irish people “must be respected” and no one has the right to call on Ireland to halt its membership in the European Union.[3] According to President Ilves, “there are no simple solutions, but the solutions exist and the EU has to find them jointly”.[4] Estonia’s leaders have joined others in the EU in calling for continued ratification of the treaty in the other member states. The main value of the Lisbon Treaty for Estonia appears to lie in strengthening of the common foreign policy: “We cannot leave the EU without a common and strong foreign policy and without a strong decision-making mechanism”, said Ilves. [5] Another key concern is that the delay in the implementation of the Lisbon Treaty could have negative consequences for enlargement; a long-term priority for the Estonian government.[6] Public debate on the treaty has been sluggish, but according to Foreign Minister Paet, this is no fault of the government, as all documents related to domestic decision-making on the issue have been publicly accessible. In a democratic society, the media plays a central role in keeping up a debate: the Lisbon Treaty simply has not been a topic that would interest the Estonian media.[7]

Discussing EU candidates but not its future

The upcoming European Parliament (EP) elections are frequently in the news now, as parties are announcing their candidate lists. However, coverage of EP elections so far appears to be disconnected from any discussion of the EU’s future. The timing and circumstances of the 2009 EP elections in Estonia suggest that these elections will have strong ’second-order’ characteristics. Taking place two years after the last Riigikogu elections, with the government completing two years in office, these elections are genuine mid-term elections. The elections coincide with a major economic crisis that is already taking a toll on the support rates of the government parties. Furthermore, the EP elections in June are widely regarded as a warm-up for local government elections held in October 2009. Under these circumstances, party candidate selection is influenced by the understanding that the elections entail a vote of confidence in the government.

The government calls on citizens to actively participate in the elections (turnout in 2004 was a mere 27 percent). According to Prime Minister Ansip, five years of membership in the EU have clearly proven that negative scenarios and pre-accession fears have not materialized. Politicians who tried to demonize Estonia’s partnership with the EU (drawing parallels to occupying regimes of the past) have clearly been proven wrong.[8] A recent Eurobarometer survey showed that Estonians are better informed about upcoming EP elections than citizens in most other member states (46 percent were aware of the fact that EP elections will be held in 2009, compared to 26 percent in the EU as a whole), but they are not particularly interested in these elections (63 percent claimed not to be interested, compared to the EU average of 54 percent).[9]

There has been very little discussion about the formation of the new Commission, aside from some speculation about who will be nominated by the Estonian government as a candidate for the post of the Commissioner. Prime Minister Ansip said consultations have not started yet but that he personally believes that Siim Kallas has done very well as Vice-President of the Commission and should be given the chance to continue.[10]

2. Transatlantic relations renewed after President Bush: top priorities

 

Cooperation and stabilisation of the post-1991 security architecture

A strong and stable partnership between the United States and Europe, as well as the improvement of the international reputation of the USA, is a key priority for Estonia.[11] In his recent ‘advice’ to the president-elect of the United States, President Ilves argued that “(o)f all the international issues that will demand President Barack Obama’s attention, two will be increasingly urgent: restoring the still-fragile relationship with Europe and addressing the collapse of the continent’s post-1991 security architecture”. The top three Estonian priorities for re-vitalizing the EU-US relationship appear to be the following:

1) Developing a unified policy towards Russia. This is especially important in the wake of the Georgia conflict. Both the EU and the US must “continue defending the liberal democratic values that ended the cold war while working with a resurgent, authoritarian and resentful Russia”.[12] According to President Ilves, the United States must continue to defend liberal-democratic principles while proactively restoring its ties to Europe: “Otherwise, 2008 could go down in history as the year when the fundamental assumptions of the post-cold-war world ceased to apply. These assumptions include the ideas that aggression is unacceptable, that borders cannot be changed by force and that democratically elected governments and the rule of law should not be forsaken for pragmatic concerns”.[13]

The EU, in turn, must resist the temptation to give in to Realpolitik when dealing with Russia. While the call to treat Russia ‘as it is’ is often heard in EU circles, many EU leaders appear to forget that Russia ‘as it is’: “now ranks 147th in the world in fighting corruption (according to Transparency International) and 141st in freedom of the press (according to Reporters Without Borders), and in 2008 was downgraded by Freedom House from ‘partially free’ to ‘not free’”.[14]

2) Cooperation in solving regional conflicts from the Middle-East to Afghanistan and intensifying security cooperation under the NATO umbrella.

3) Cooperation in the sphere of energy and climate policy. According to Foreign Minister Paet, the US and the EU need to take into account the geopolitical aspect of the energy issue. Cooperation with the US is particularly critical in carrying out energy infrastructure projects in the Caspian and Black Sea region.[15]

3. Financial crisis and challenges of global governance: the EU response

 

Strengthening the market rules without enforcing protectionist measures

Among all EU member states, the Baltic countries have been hit particularly hard by the financial and economic crisis. While the Estonian economy expanded 10.4 percent in 2006 and 6.3 percent in 2007, it stopped growing in 2008, and the GDP is forecasted to decline by 5.5 per cent in 2009. The government has decided to implement massive budget cuts in order to reduce the budget deficit for 2009. The gloomy outlook has not changed the fundamental principles of the government’s economic policy: i.e. commitment to liberal markets and accession to the Eurozone at first opportunity.

In the government’s view, the international crisis of financial markets has “proven the need for a common monetary policy in Europe”.[16] The Euro is seen as “an irreplaceable promoter of market stability and guarantee of long-term economic growth“.[17] Joining the Eurozone is the Estonian government’s number one priority in the coming years. The government is determined to carry out the painful budget cuts at any cost in order to retain Euro-eligibility. The slowing economy has helped curb the high inflation rates, making accession to the Eurozone in 2011 a realistic prospect, provided that the budget deficit can be kept within limits. According to recent public opinion polls, about half of the population of Estonia supports changeover to the Euro, while 40 percent are against it.[18]

Maintaining an open economic space

In line with its long-term liberal market policies, the Estonian government rejects protectionist solutions to the global crisis, arguing that “calls to protect markets, for increased state intervention into the economy and the need to protect so-called ‘key sectors’” do not constitute the correct response to the crisis. An open economic space based on even competition rules should be maintained, expanded and strengthened. According to Prime Minister Ansip, “economic interdependence that goes along with openness helps alleviate the effects of the economic downturn and creates opportunities for new growth”.[19] The freedoms of the internal market should be extended and deepened, and reform of the Common Agricultural Policy should be sped up. The EU budget must give greater priority to innovation and development, both of which are the basis for the growth of economic competitiveness. The EU must “stand firm against attempts to build barriers in international trade” and the crisis should not be used as “an excuse to backtrack on attempts to liberalise the world economy”.[20] In particular, trade between the USA and the EU should be developed further. While partial “strengthening of market rules” (including regulation and control of financial institutions) might be necessary, such rules should not “cripple the market’s ability for self-regulation” or “create an environment in which market players do not feel their own responsibility”.[21]

 

 

 

[1] Speech by Prime Minister Andrus Ansip on the Government’s European Union policy in the Riigikogu, 9 December 2008, available at: http://www.valitsus.ee/?id=8809.
[2] Evelyn Kaldoja, ”Eestlased peavad ELi oma riigile kõige kasulikumaks,” Postimees, 28 January 2008, available at: http://www.postimees.ee/?id=74824.
[3] Government Press Release, ”Peaminister tutvustas Riigikogus Eesti seisukohti Euroopa Ülemkogul,” 16 June 2008, available at: http://www.valitsus.ee/?id=8314.
[4] “Estonian president ratifies Lisbon Treaty,” 19 June 2008, available at: http://www.eubusiness.com/news-eu/1213886834.3/ .
[5] Ibid.
[6] Ministry of Foreign Affairs Press Release, „Delays in Implementation of Lisbon Treaty Should Not Interfere with Expansion of European Union,“ 13 July 2008, available at: http://www.vm.ee/eng/kat_138/9902.html?arhiiv_kuup=kuup_2008.
[7] „Urmas Paet: Riikide vahel on alati parem rääkida kui mitte rääkida,” Pärnu Postimees, 9 May 2008, available at: http://www.vm.ee/est/kat_45/9688.html?arhiiv_kuup=kuup_2008
[8] Speech by Prime Minister Andrus Ansip on the Government’s European Union policy in the Riigikogu, 9 December 2008, available at: http://www.valitsus.ee/?id=8809.
[9] Evelyn Kaldoja, ”Eestlased peavad ELi oma riigile kõige kasulikumaks,” Postimees, 28 January 2009, available at: http://www.postimees.ee/?id=74824.
[10] Transcript of the IV session of the XI Riigikogu, „VV tegevus EL poliitika teostamisel,” 9 December 2008, available at: http://www.riigikogu.ee/?op=steno&stcommand=stenogramm&date=1228814686&toimetatud=0&toimetamata=1&paevakord=3238#pk3233.
[11] Erika Kalda and Erik Gamzejev, „President Ilves: “Surutisele vaatamata pole töö Eestis otsa lõppenud”, Põhjarannik, 19 November 2008, available at: http://www.president.ee/et/ametitegevus/intervjuud.php?gid=122096.
[12] President of Estonia Toomas Hendrik Ilves, “The Challenge in Europe: Only unified can the West defend itself. But first it must heal the transatlantic rift.” Newsweek, 31 December 2008, available at: http://www.newsweek.com/id/177415.
[13] Ibid.
[14] Ibid.
[15] Ministry of Foreign Affairs Press Release, „Eesti peab väga oluliseks ELi ja USA koostööd energiajulgeoleku suurendamisel,“ 9 January 2008, available at: http://www.vm.ee/est/kat_42/10518.html?arhiiv_kuup=kuup_2009_01.
[16] Speech by Prime Minister Andrus Ansip on the Government’s European Union policy in the Riigikogu, 9 December 2008, available at: http://www.valitsus.ee/?id=8809.
[17] Ibid.
[18] Government Press Release, „Eestis toetab eurole üleminekut pool elanikkonnast,” 18 December 2008, available at: http://www.valitsus.ee/?id=8854.
[19] Ibid.
[20] Ibid.
[21] Ibid.