President Karis on PM Kallas’ scandal: Doing business with Russia calls Estonia’s credibility into question

The Estonian president, Alar Karis, made a public statement on 28 August in connection with the scandal over the country’s prime minister Kaja Kallas’ husband’s business operations related to Russia, saying that when it comes to certain companies, this calls into question the credibility of the Estonian state in its interaction with its allies; the president also said the government politicians have to answer questions when they arise.

According to Karis, one of the tasks of the president and members of the government is to maintain Estonia’s internal stability and the country’s integrity in domestic and foreign policy.

“Imposing economic sanctions on Russia, which is waging a war of conquest in Ukraine, is a common policy of the European Union to contain the aggressor. Estonia has been one of the driving forces behind the sanctions policy. Many business operators engaging in business with Russia pulled out of that business for moral reasons during the year and a half after 24 February 2022. They did the right thing so as not to be associated with the aggressor state and its economic bloodstream,” the president said.

“But we know that not everyone in Europe has done this. Also in Estonia. When it comes to certain companies, this calls into question the credibility of the Estonian state in its interaction with our allies. The business activities of prime minister Kaja Kallas’ family member vis-a-vis Russia have raised many questions in the media and in society and have put the spotlight on the head of the government and the values that Estonia must follow,” Karis said.

Karis said 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.

“Estonia is a parliamentary state, which requires us all to respect the representative body elected by the people. The prime minister has told the public she has no plans to resign. The next steps by the prime minister will show how serious she considers the problem to be and what she believes is the right solution for the Estonian state. Of course, the parties in the governing coalition – the Reform Party, Estonia 200, the Social Democrats – also have an important role to play in this. As president, I consider it necessary to emphasise that Estonia needs a government capable of working and relying on internal trust,” the president said.

The Estonian prime minister Kaja Kallas at the government press conference on 24 August 2023. Photo by Stenbock House.

Kallas lent €370,000 to the company that has business interests in Russia

The Estonian Public Broadcasting reported on 23 August that Stark Logistics, a transport company partly owned by Kallas’s husband Arvo Hallik, has not ceased operations with Russia.

The company had continued shipments to Russia throughout the war in Ukraine that started on 24 February 2022. Ever since the war started, Kallas has told the Estonian as well as the international media that “there must be no business with Russia”.

The Estonian prime minister had a clear link to her husband’s business interests, since her declaration of economic interests, made public in June, revealed that she had lent €350,000 to Arvo Hallik’s company Novaria Consult that owns 24.8 per cent of Stark Logistics.

Kallas wrote to the Reform Party members on 23 August that she had lent another €20,000 to her husband’s company in June. At the government press conference on 24 August, she said that she had received both loans back.

Recent polls by two survey companies show that a majority of Estonians think the country’s prime minister, Kaja Kallas, should resign. Kallas said in an interview with the Estonian Public Broadcasting in the evening of 25 August that she isn’t planning to resign.

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