According to a fresh poll, commissioned by the Institute for the Study of Societal Issues, 66 per cent, or two in three Estonian citizens are of the opinion that Kaja Kallas should step down as the prime minister of Estonia, in the wake of the scandal involving her loan to her husband’s company that has business interests in Russia; major Estonian newspapers have also called Kallas to resign and say the prime minister undermines the country’s democracy.
On the afternoon of 23 August, news broke that a transport company Stark Logistics, co-owned by Kaja Kallas’ husband Arvo Hallik, continued the haulage of goods to Russia after the outbreak of the full-scale war in Ukraine – despite the prime minister’s public criticism of the companies conducting business in Russia. The prime minister had a direct link to her husband’s business since she had loaned €370,000 to Arvo Hallik’s company Novaria Consult that owned 24.8 per cent of Stark Logistics (in the wake of the scandal, Hallik said that he will sell his shares in the logistics company).
Stark Logistics transported metal components for an aerosol can maker in Russia, owned by another Estonian company, Metaprint, and its Russian subsidiary, Aeroprom. Some of the transported components are now in the list of sanctioned goods. The Estonian newspaper Eesti Päevaleht reported that Stark Logistics has moved goods worth of €29 million to Russia since the start of the war – and made €1.6 million from this business.
Ever since the start of the war, Kallas has told the Estonian as well as the international media that “there must be no business with Russia”.
Pollster Norstat asked voting-age citizens of Estonia whether Kaja Kallas should resign as the head of government. Twenty-nine per cent answered “no” or “rather no”, 66 per cent “rather yes” or “yes”, and five per cent couldn’t say.
That the premier should resign was said by 99.5 per cent of the respondents who showed the Estonian Conservative People’s Party (EKRE) as their party preference, 93 per cent of the supporters of the Centre Party, 85 per cent of the supporters of Isamaa (all three are in the opposition) and 55 per cent of the supporters of the Social Democratic Party (part of the coalition government with Kaja Kallas-led Reform Party). Of voters of Estonia 200 (also part of the coalition government), 48 per cent said that the prime minister should resign and 47 per cent that she shouldn’t.
Of voters of the Reform Party, of which Kallas is the chair, 82 per cent think she should continue in office and 14 per cent think she should resign.
Respondents were asked to answer three more questions related to the controversy involving the prime minister’s husband. Eighty per cent of respondents think it is not moral for Estonian companies to do business in Russia now, 67 per cent do not believe Kaja Kallas was unaware of her husband’s business activities in Russia, and 69 per cent think the prime minister should disclose what she gave her husband’s company a loan for.
The online survey was carried out by interviewing 1,000 citizens aged 18 and above from 28-29 August.
Kaja Kallas has so far said in the public interviews that she has no intention to resign.
Newspapers: Kallas undermines democracy
Many major Estonian newspapers have called Kallas to resign, and some editorials also say that the prime minister is undermining Estonia’s democracy, in the light of Kallas’ initial refusal to attend a parliamentary committee to explain her conduct (she said on 30 August that she will attend sittings of two select committees of the parliament).
In its editorial titled “New phase of the crisis”, the conservative-leaning Postimees notes that the prime minister has declared to the public that her busy schedule does not allow her to attend the joint meeting of parliamentary committees. “But what could be more important than decisively ending to the current scandal with exhaustive answers?” the paper asks.
According to the paper, the Reform Party’s decision-makers are hoping that opponents will tire and the issue will die down.
The liberal Eesti Päevaleht, which titled its editorial “Prime minister is undermining democracy,” asks whether Kaja Kallas has decoupled herself from the Estonian legal system.
The paper states that the committees of the Estonian parliament (Estonia is a parliamentary republic) certainly have the right to demand the prime minister to attend their meeting when summoned, based on the parliament’s rules, but there is no punishment for the case the summons is ignored.
“In the current scandal, Kallas is behaving like those politicians who, in order to keep them out of the government, many voters cast their votes for the Reform Party in the last elections,” Eesti Päevaleht notes – a reference to the politicians of the former populist-leaning coalition of the Centre Party, EKRE and Isamaa, in power from 2019 to 2021.
“It’s fine if Kallas likes her current job. It’s fine if an analysis of foreign media suggests that her reputation as setter of ethical standards restricting Russia has not suffered much. But to continue as prime minister with a righteous face, you have to go through a purgatory, which includes an hour or two of answering questions from the parliament committees,” the paper says.
Õhtuleht, a tabloid, writes in its editorial, titled “Punishment of blind arrogance,” that the prime minister’s behaviour can only be described as a growing crisis of democracy in Estonia.
“Kallas’ current style – dodge, deny and run, thus feeding the crisis – is crossing a Rubicon after which it can no longer be cured by a simple retreat,” the paper finds.
“The Reform Party’s blind arrogance in domestic policy has claimed a new victim in the form of both Kallas’ political image and our domestic political balance,” Õhtuleht says.
Kallas to attend two select committees of the Estonian parliament
The Estonian president, Alar Karis, made a public statement on 28 August in connection with the scandal over Kallas’ husband’s business operations related to Russia, saying that it is also part of the job of government politicians to answer questions when they arise, and to do so in front of the Estonian parliament committees, regardless of whether the committee is headed by a representative of the opposition or the coalition.
“And especially when difficult and unpleasant issues have to be discussed, just as is appropriate and necessary in a normal parliamentary state, necessary for the functioning of democracy. The choices that leave the parliament aside in this situation will set a precedent for the future and shape the image of Estonian democracy,” he said, adding that “Estonia is a parliamentary state, which requires us all to respect the representative body elected by the people”.
On 30 August, Kaja Kallas said that she will attend sittings of two select committees of the parliament to speak about freight haulage to Russia by Stark Logistics. She will attend the meeting of the anti-corruption select committee on 4 September and the security agencies oversight select committee on 11 September.
Postimees: Loan provided by Kaja Kallas was used to build Stark’s warehouses
Meanwhile the Postimees newspaper reported that part of the €350,000 loaned by Kallas to her husband Arvo Hallik last year went for the launch of Stark Warehousing, a subsidiary of Stark Logistics – the company that transports metal components to a factory in Russia that produces aerosol cans.
That Kallas lent €350,000 to Hallik’s company Novaria Consult came to light in Kallas’ declaration of economic interests at the beginning of the summer. The premier later disclosed that she had lent her husband additionally €20,000.
So far, the parties have remained tight-lipped about the loan. All that is said is that it went for investment, but exactly where has not been disclosed. Kallas, too, said that when she lent money to Hallik, she didn’t inquire into exactly what her spouse was going to use it for.
It has now emerged that the money ended up in the Stark empire, or the group that has helped Metaprint, a producer aerosol cans, with transport services to Russia after the outbreak of the war in Ukraine.
Hallik owned nearly 25 per cent of Stark Logistics and was a board member and chief financial officer in that company. However, Stark Warehousing, which was set up in 2021 to manage the company’s warehouses, was essentially in his sole ownership for a long time (it now has additional shareholders).
Since Stark Warehousing’s annual report for 2022 says that the owner has provided to the company a short-term loan of over €400,000, and at that moment Arvo Hallik was the sole owner of the company, this begs the question of whether the loan given by Kaja Kallas could have been used to build the warehouse and start the company.
Hallik confirmed this: “I borrowed money from my wife for Novaria Consulting to make various investments. Among other things, I have also invested in the launch of the warehouse services company Stark Warehousing. The loan from my wife has since been fully repaid.”
PM’s coalition partner: Kallas has not given exhaustive answers
According to Jevgeni Ossinovski, the head of the Social Democrats’ faction in the Estonian parliament, Kaja Kallas has not given exhaustive answers about her husband’s business with Russia. Ossinovski said that the Social Democrats (who have nine seats in the 101-strong parliament) would like to continue in the current coalition with the Reform Party (37 seats) and the Estonia 200 (14 seats), and the scandal involving the prime minister must be resolved by Kallas and the Reform Party.
“I would separate two issues: we would definitely like to continue our cooperation with the Reform Party and the Estonia 200. We hope that the prime minister will be able to give exhaustive answers to the questions that have arisen – but I don’t think that has been done to date,” Ossinovski said at the morning programme of Estonian Public Broadcasting’s Vikerradio.
Ossinovski said the Social Democrats do not yet have enough information to decide on Kallas’ credibility.
“I hope that in the near future, however, she will be able to appear before the parliament to give the answers that the MPs and the parliament’s committees legitimately want. And when these answers are exhaustive, these explanations have been given, then it will be possible to move on. If that doesn’t happen, then I think that is where perhaps other decisions need to be considered. But today we are not there yet,” he added.
