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"Estonian President: I would not say that we live better than Lithuanians", The Lithuania Tribune

12.11.2013

Ugnė Karaliūnaitė

The Lithuania Tribune presents an interview with the President of Estonia, Toomas Hendrik Ilves, conducted by Ugnė Karaliūnaitė of www.delfi.lt.

The success of small Baltic countries depends not only on the efforts of each country to attract attention of the world, but also on the internal collaboration of Lithuania, Latvia and Estonia. It is crucial for countries to show solidarity both in economical and political issues.

Estonian President Toomas Hendrik Ilves agreed to share his thoughts about co-operation of Baltic countries, the visit to the US President Barack Obama and threats that are coming from the East.

President of Estonia visited Lithuania at the beginning of November to take part in the biggest IT event 'ICT 2013' during Lithuanian presidency of Council of European Union. Leader of the country that introduced 'Skype' to the world is happily watching how information technologies are penetrating the life of a country and help to reduce bureaucracy.

DELFI: In Lithuania, Estonia is often referred to as an example of success in the IT sphere. But maybe IT is the only solution for small countries to survive in global world?

Estonian President Toomas Hendrik Ilves (THI): It is one area. I wouldn't stress the word 'small' so much. I would say that after 50 years of occupation there were some areas where we were 50 years behind.

But when we come to IT, this is one place where everyone was starting at the same level. We've been creative and innovative. It means that you can do all creative things even if you do not have enough money or are in positions where you can still have tough IT level even if your roads are still Soviet build.

One reason why we focused on IT is that there some things that you have to do if you don't have 200 or 300 million people in your country. IT helps to do want people can't do – simplify bureaucracy, tax returns, prescriptions. All these things can be done online much more easier.

Intellectual property is what matters, not how many products you have coming from the lines.

DELFI: Estonians have been using euro for three years. Latvians are preparing to join the eurozone next year. Lithuania has plans to have euro starting from 2015. Could you share Estonian experience of joining the eurozone. What mistakes could we escape?

THI: I would say my country had many positive effects – direct investment increased because of the confidence in the currency.

We had simplified things. We gained a part of security which we were missing before. If you are a small country it means you have a small currency. Something that is, of course, more vulnerable to outside influence.

Even if you have currency board system as we all did, it is still better to have currency that is taken seriously by people all over the world.

And of course, citizens benefited as well. It is much easier to travel. It is good for tourism. People do not have to change money.

DELFI: Lithuanians are afraid of sudden increase in prices. How did Estonia overcome this?

THI: I've already pointed out that the rise in prices in Estonia during the first year of the euro introduction was smaller than the inflation in Lithuania the same year. There is nothing inherent in the euro that makes prices rise. It has to do with the behaviour of people who exploit the euro to add something on, but, generally, the euro makes things cheaper because you see prices and can compare them in different countries.

DELFI: Did Estonia regulate how prices were changed from Estonian kroons to euro?

THI: You cannot regulate prices in capitalist economy. That would be a very extreme measure. We are not in favour of regulating prices, and if you do, you postpone the inevitable. You can think that you should stop prices from increasing because of the inflation criteria, but Lithuania meets them very well so there is no need to do that.

DELFI: Will Estonia benefit from Lithuania joining the eurozone?

THI: Every country that adopts the euro makes it stronger and more serious. Of course, it will benefit both countries. It will increase tourism and it will make it easier for us to travel, sell and buy goods from each other because of transaction costs.

DELFI: Estonia is way ahead of Lithuania in terms of average salary. Why do Estonians still live better than Lithuanians?

THI: I do not think that life in Estonia is much better. I think that our people, in fact, face very minor differences. If you look at salaries in Latvia, Estonia and Lithuania – they differs. But if you actually look at the salaries across Europe we are basically at the same range, so it is not a fare basis for comparisons.

DELFI: Baltic countries were dearly hit by the financial crisis, similarly to the rest of the world. Lithuania decided to cope with it by itself, meanwhile Latvia borrowed from the IMF. Whose decision was better?

THI: Estonians did not borrow from the IMF also. We obviously preferred that option. All of us in 2008 were wondering what shall we do now – money was running out, banks and companies could not get money, no one was buying. It was a tough situation. I would say that each country makes its own choices. We didn't go to the IMF as we did not need to do it.

DELFI: There is only one week left till the Eastern Partnership Summit in Vilnius. How it is going to end? What is it going to affect the Baltic countries?

THI: No one knows how it is going to end.

Clearly, Estonia has always been very supportive of the Eastern Partnership programme. We think it is good for Ukraine and Moldova. We think it is good for the entire EU. From our perspective people start taking Ukraine and Moldova more seriously.

The incredible pressure has been put on the countries by the Eurasian Customs Union – threats to cut gas, blockades and even worse.

The fact that the European Council is discussing the Eastern Partnership in Lithuania is not Lithuania's fault. It is completely unacceptable that Lithuania is a subject for blockades, because they happen to be in the presidency.

Lithuania is now subject to blackmail and punishment just because it is doing its European duty; this is unacceptable. We need to make sure that we have enough solidarity in Europe towards its member states.

DELFI: If the agreement is signed with Ukraine, will Lithuania feel pressure from the East further?

THI: Since it's completely bizarre behaviour to me anyway, I cannot predict whether this bizarre situation is going to be less bizarre or not.

DELFI: In 2007 Estonia suffered from serious cyber-attacks. Are Baltic countries ready for new ones?

THI: It's difficult to say. First of all, I do not know what other Baltic countries are doing but certainly in our case we finally done more than many other countries. But I would always argue that there are always more things to do.

We have been worried about cyber-security for years and years. After 2007 we've been even more active. Certainly, our governmental IT infrastructure is stronger in terms of protection of identities and access to data.

DELFI: Recently the information about alleged new information attacks against Lithuanian president and other politicians in Lithuania has leaked. You demonstrated support for our country. How should we react to such actions if they are taken by Russia?

THI: We've seen this many times before. So, it is not new and I would like to see the European Union work out a set of concrete measures that would be implemented.

This all is not new; it happens to the EU member states, mainly in the East and some others, for example, the tulip blockade of the Dutch. I find it really funny that the European external action service has not yet come up with a policy how to deal with threats against member states.

What is the point of the common foreign policy if we do not have a common policy of dealing with this kind of threats? And I hope that next Commission will start doing more work on this.

DELFI: At the end of August, you, Lithuanian and Latvian Presidents had a meeting with the US president Barack Obama. Lithuanian President Dalia Grybauskaitė said after it that she felt the interest of the US foreign policy to focus more on the Baltic and Nordic countries. Did you feel the same?

THI: They talked about it. They proposed this. The US is supportive, but we have to see what happens.

DELFI: The success of Baltic countries depends on collaboration. There are plans for 'Rail Baltica' railway, new nuclear power station and common market for electricity with Nordic countries. How would you describe the co-operation between our countries in these projects?

THI: Firstly, I want to say that having 160 km/h speed trains from Polish border to Kaunas is not 'Rail Baltica'. Estonia has brand new tracks running through the country with the brand new rail and legal speed is 120 km/h. 'Rail Baltica' is not a rail gauge. 'Rail Baltica' is a high speed trains railway. So, the idea of Lithuanians building different railroads in our region is not taken seriously.

DELFI: What about the new nuclear power plant project in Lithuania? Are Estonians still interested in it?

THI: Every since the agreement in 2006 in Trakai we have been interested, but it seems that conditions change every week or every month. So we don't know.

Original article on The Lithuania Tribune webpage.