Chairman of the Foreign Affairs Committee of the Riigikogu (Parliament of Estonia) Marko Mihkelson said that the committees as close partners wished to coordinate their further activities thoroughly in order to follow the same course in their foreign and security policy. According to him, preparations for the NATO Summit to be held in Vilnius in July and the expectations of the Baltic States will be the main topic of the meeting. “The most important for us is to achieve strong support for Ukraine, including a roadmap for becoming a member of NATO. Strengthening of our security and restoration of peace in the whole Europe also depend on Ukraine’s accession to NATO,” he added.
The debate on the Vilnius Summit will start today with a meeting with Minister of Foreign Affairs of Latvia Edgars Rinkevičs.
Other necessary steps for helping Ukraine, including cooperation in establishing and imposing sanctions against Russia as well as holding to account personally those responsible for the crime of aggression against Ukraine, will also be spoken about at the meeting of the Foreign Affairs Committees. At its plenary sitting the day before yesterday, the Riigikogu adopted a Statement in which it calls on establishing a special international tribunal under the auspices of the UN General Assembly.
On Friday, the Foreign Affairs Committees of Estonia, Latvia and Lithuania will also visit Inčukalns underground gas storage facility and discuss topics relating to energy security. On Saturday, the representatives of the Foreign Affairs Committees will meet with Mayor of Sigulda Līga Sausiņa.
Besides Mihkelson, members of the Foreign Affairs Committee of the Riigikogu Maria Jufereva-Skuratovski and Anti Poolamets will also attend the meeting in Latvia.
“It is extremely important for Estonia and the whole Europe that democracy in Belarus develops,” Hussar said. “The democratic opposition in Belarus plays an absolutely essential role in guiding the country to a democratic future,” he said, declaring that the Estonian parliament is firmly behind the democratic opposition in Belarus and eager to engage in close cooperation.
The President emphasised the importance of free and democratic Belarus to ensure the peace and stability of the region. He added that the future of Europe as well as Belarus depended largely on how Russia’s war in Ukraine would end and stressed the importance of Ukraine’s victory.
Tsikhanouskaya thanked Estonia for its forceful steps taken in support of Belarus but expressed a strong hope for even more international support. The parties were in full agreement that Lukashenka did not represent the whole country and that his regime could fall. If the country should consequently advance towards democracy, that would be a huge boon for Ukraine as well. But it is not impossible that Russia might have ambitions of taking over the country.
The situation in Belarus itself was another topic of discussion, with particular focus on positioning Russian nuclear weapons into Belarus, the situation of political prisoners, and the deportation of Ukrainian children by Russia with the collaboration of the Lukashenka regime.
Today, Tsikhanouskaya is meeting the Chairman of the Democratic Belarus Support Group of the Riigikogu, Urmas Reinsalu.
85 members of the Riigikogu voted in favour of passing of the Statement of the Riigikogu “On Accountability for the Crime of Aggression against Ukraine” (228 AE), submitted by 94 members of the Riigikogu. In the Statement, the Riigikogu commemorates all victims of the crimes of aggression, genocide and deportations committed by the Soviet Union and its successor the Russian Federation.
The Riigikogu underlines in the Statement that the Russian Federation’s war of aggression against Ukraine is the most outrageous act of aggression in Europe since the Second World War and requires an adequate legal response. According to the Statement, the crime of aggression is the supreme international crime which is the root cause of all other crimes perpetrated in Ukraine and which leads to the perpetration of further serious crimes, and the prosecution of the perpetrators of this crime is the duty of the international community as a whole. “It is the duty of the World to hold to account individually those involved in planning, preparing, initiating or executing the crime of aggression against Ukraine, in addition to perpetrators of genocide, crimes against humanity and war crimes,” the Statement says.
The Riigikogu points out that the crime of aggression is essentially a leadership crime. Already the Charter of the International Military Tribunal of Nuremberg formulated the principle that leaders, organizers, instigators and accomplices of a war of aggression participating in the formulation or execution of a war plan are responsible for all acts performed by any persons in execution of such plan. “Without a trial of the perpetrators of the crime aggression it will not be possible to achieve a just and lasting peace both in Ukraine and in the whole Europe,” emphasises the Statement, adding that a special international tribunal for the crime of aggression has to be established under the auspices of the UN General Assembly to prosecute the crime of aggression committed by the leadership of the Russian Federation.
In the Statement, the Riigikogu sets the establishment and launch of a special international tribunal for the crime of aggression against Ukraine as a priority in Estonia’s foreign policy activities. The Riigikogu calls on the Government and the President of the Republic to raise this issue at all meetings with other governments and Heads of State, in all international organisations where the Republic of Estonia is a member as well as at all international fora where the Republic of Estonia participates, and to strengthen the cooperation with the Ukrainian authorities in the investigation of the crime of aggression and in bringing criminals to justice. “The Riigikogu calls on national governments and parliaments around the world, especially Estonia’s allies, to actively support the establishment of a special international tribunal under the auspices of the UN General Assembly,” the Statement says.
Since the beginning of last year, the Riigikogu has adopted seven Statements and one Communication to condemn Russia’s activities and to express support to Ukraine. Among other things, the Riigikogu has recognised the actions committed by the Armed Forces of the Russian Federation in the military aggression against Ukraine as an act of genocide against the Ukrainian nation, and has declared Russia a terrorist regime and the Russian Federation a state sponsor of terrorism, whose actions we must confront together. The Riigikogu has also supported the establishment of a centre for investigating Russia’s crime of aggression by the European Union in The Hague, called on the countries of the world to contribute in every way to the activities of the centre, and to continue with efforts to set up an international special tribunal.
On 17 May this year, the Riigikogu passed the Statement submitted by 95 members of the Riigikogu in support of Ukraine’s wish to join NATO as the only way to ensure a rules-based world order, lasting peace and the security of the democratic countries of Europe.
During the visit, which lasts until Friday, the members of the Verkhovna Rada will meet with President of the Riigikogu (Parliament of Estonia) Lauri Hussar, Vice-Presidents of the Riigikogu Toomas Kivimägi and Jüri Ratas as well as members of the National Defence Committee of the Riigikogu and the Estonia-Ukraine Parliamentary Friendship Group. The delegation also plans to have meetings with the parliamentary groups of the Riigikogu.
Besides having meetings with members of the Riigikogu, the Ukrainian delegation will visit the Estonian Centre for International Development and meet with Minister of Health Riina Sikkut. The Ukrainian MPs will also meet with representatives of the Ministry of the Interior and the Rescue Board.
Mihkelson said that on Tuesday, the Chairs of the Foreign Affairs Committees of the parliaments of Estonia, Lithuania, Poland, Denmark, the United Kingdom and Ukraine would participate in the meeting of the US House Foreign Affairs Subcommittee on Europe to speak of their expectations for the NATO Summit to be held in Vilnius at the beginning of July. According to him, Estonia hopes the Summit will extend strong support for Ukraine, including the invitation to join NATO.
“In order to help Ukraine achieve a strategic victory over Russia, we must continue to raise the cost of aggression for Russia and hold personally accountable all those responsible for the crime of aggression against Ukraine,” Mihkelson said, adding that one of the issues of importance to Estonia at the Summit was the continued strengthening of deterrence and defence posture on NATO’s eastern flank and reaching an agreement to increase the defence spending of NATO countries.
Mihkelson said that he would also speak about the draft Statement on accountability for the crime of aggression against Ukraine that would be put to a final vote in the plenary of the Riigikogu this week. The draft Statement says that the crime of aggression is essentially a crime committed by the leadership of a country, and requests holding to account individually those involved in planning, preparation, launching and committing the crime of aggression against Ukraine. It also calls on raising the issue of establishing a special international tribunal at all meetings with the governments of other countries, in all international organisations where Estonia of is a member, and in all international forums where Estonia of participates.
On Monday and Tuesday, the Chairs of the Foreign Affairs Committees will meet with several senators and congressmen, and they also plan to have meetings at the Department of State and different think tanks.
From the United States, Mihkelson will travel to France, where he will participate in a seminar of the countries of NATO’s eastern flank at the French National Assembly on Thursday. The seminar will discuss support for Ukraine, and Europe’s new security architecture with delegates from Central and Eastern European countries.
Speaking to the Riigikogu, Kessler noted that, last year, the activities of the Financial Supervision Authority had been significantly affected by Russia’s war in Ukraine.
“With war and other deep crisis situations, the financial supervision visualises a grim picture of potential risks. For example, people become anxious and begin to withdraw their money from their bank accounts, jamming up even sound and normally functioning credit institutions. We call it a liquidity risk,” Kessler began. “For example, hostile persons attack the infrastructure of online governance and financial intermediaries in such a way that the necessary services in society freeze. This is the materialisation of a cyber risk. For example, pariah states take advantage of the financial system to buy the technology they need and other such things. For supervision, this means a breach of international financial sanctions. For example, our businesses wither because, due to sanctions and other constraints, companies can no longer trade with their usual partners and regions, and this leads to insolvency of businesses. For the Financial Supervision Authority, this means the materialisation of credit risk and worsening of credit quality.”
In Kessler’s words, the Financial Supervision Authority had mapped the risks related to the war in Ukraine and had directed the market participants’ focus to managing those risks immediately before the beginning of the war. “We stopped the activities of the only market participant who was significantly connected with risks from Russia, and eventually their authority was revoked. After the war broke out, we set up meetings with market participants, at first every other day and later every week and every month, according to the crisis or risk environment. We set up special reporting and prepared regular monitoring analyses to assess the need for immediate intervention by supervision. We can now conclude that the risks arising from the war were mapped in good time, measured, and managed in cooperation with the financial sector and other relevant authorities. They were managed in such a way that society and economy continued to function seamlessly in 2022,” Kessler said.
Another major issue last year, in Kessler’s words, had been an international mission’s assessment of Estonia’s capacity to prevent money laundering. He noted that the report had been published at the beginning of this year and according to it there were a few weak spots in the money laundering prevention system, for example certain moments in criminal proceedings as well as in crypto asset sector but in general the evaluators had thought that Estonia’s capacity to prevent money laundering was good, especially in banking, Kessler confirmed.
In his report, Kessler also looked at the risks in 2023. He pointed out the technological risks of financial intermediaries relating to online governance. He added that, in his opinion, inflation was the main risk affecting the financial market in 2023, and monetary policy as well as fiscal policy steps corresponded to that. In Kessler’s words, this year the credit risk is likely to increase, that is, there will be more cases where recipients of loans fail to duly meet their obligations.
The Chairman of the Management Board of the Financial Supervision Authority concluded his report by making a proposal to the Riigikogu to establish a financial ombudsman at the Financial Supervision Authority to better protect consumers and to resolve disputes.
During the debate, Andres Sutt took the floor as representative of the Estonian Reform Party Group.
The video recording of the sitting will be available to watch later on the Riigikogu YouTube channel.
(Please note that the recording will be uploaded with a delay.)
Minister of Finance Mart Võrklaev said that, for decades, Estonia had been known as a country with a low debt burden and sound public finances. “In earlier times, international organisations have often looked to Estonia and pointed us out as an example to other countries,” he said.
In Võrklaev’s words, the Government that had been in power in 2016 had put Estonia’s general government budget into deficit during rapid economic growth. One of the first major fiscal policy decisions had been to amend the basic Act on the state budget in order that it would be possible to draft the budget with a deficit. “As a result of the consequent COVID crisis, energy crisis and war, the deficit has aggravated rapidly and suddenly, amounting to minus 5.5% of GDP in 2020. As the budget was in deficit already before the crises, we fell deeper than we should have during the crisis and it will take years to climb out of this pit,” he explained.
Võrklaev said that the deficit that had emerged over recent years was of a permanent nature because both the expenses due to the crises and other added costs were mostly fixed costs. In addition, the Minister of Finance said that, because of Russia’s full-scale aggression in Ukraine that had started last February, Estonia had had to boost its defence spending to at least 3% of GDP. “Therefore, public costs have increased significantly but we have not increased our revenue at the same time,” the minister said.
Deputy Governor of the Bank of Estonia Ülo Kaasik said that the debate that had been raised was very important because it defined to a great degree in which direction the Estonian economy was moving and how that economy was managed. “First, today we should definitely make efforts to ensure the long-term sustainability of public finances because the budget deficit will become worryingly large and persistent in the next few years,” he began.
Second, Kaasik pointed out that the budgetary position should be improved as quickly as possible because that was necessary to ensure both the inner and outer balance of the economy. “A rapid price and salary growth is currently a threat to the competitiveness of our businesses, and the budget deficit may undoubtedly hinder this competitiveness even more,” the Deputy Governor thought.
Kaasik also said that if the budget balance was going to be restored with a longer delay and when the debt burden was greater, more extensive cuts would be needed to achieve it, and the impacts on the economy would probably also be more extensive. Third, he pointed out that it would probably be expedient to carry out a thorough review of general government expenditure and the tax system to find political agreements on how to ensure a sustained improvement in the state of public finances.
Deputy Governor of the Bank of Estonia said that today it was definitely necessary to make efforts to ensure the long-term sustainability of public finances because the budget deficit in the next few years was going to be worryingly large and persistent. “We should do this as quickly as possible and it would definitely be expedient to review both expenditure and revenue in different views and to try to reach a political agreement so that we would be able to ensure a better state of public finances in the long term,” Kaasik said in conclusion.
In his report, Chairman of the Fiscal Council Raul Eamets focused on two questions – what the current state of Estonia’s public finances was and how it had been formed, and what the fiscal policy should be like in the future. In Eamets’s words, it is necessary to go back in time two or three years in order to understand the current situation. “Fast-forward, I can already say that public expenditure has increased faster than public revenue and in order to offset this gap, it would be necessary to prop up the revenue side or to slow down the expenditure growth, or to do both at the same time,” he said.
Summing up last years, the Chairman of the Fiscal Council pointed out that the faster growth of expenses had begun in 2020 when, at the outbreak of the pandemic, the then Government had adopted a decision that the expenditure plans that had been made would not be amended but, on the contrary, the economy would be supported with the help of loan money. “In summary, in 2020, public expenditure increased not by 6% as had been initially planned, but by 13%, and the increase of public revenue remained practically zero,” Eamets noted.
The report of the Chairman of the Fiscal Council revealed that, in 2021, general government expenditure had increased by 6% from a very high reference base, and the rapid recovery of the economy in 2021 had brought about an increase in public revenue. “Tax revenue increased nearly 17% and the result was that budget deficit turned out to be much smaller than had been expected,” he said. At the same time, in Eamets’s words, the complicated situation with public finances had also been somewhat concealed by the reform of the second pillar pension, where the side effect had been that several hundreds of millions of euro worth of additional tax revenue had been accrued to the state. “It was one-off additional revenue which the state received at a complicated time, and we definitely cannot count on such revenues in such a volume in the years to come,” he added.
Concerning the year 2022, Eamets said that public expenditure had increased by 9–10%, but public revenue had increased even more rapidly. He recalled that, when the drafting of the state budget for 2022 had been started in autumn 2021, an economic growth of 4% and approximately the same increase in prices had been expected. In reality, however, a small economic downturn and a nearly 20%-per cent price rise had been seen. “Thanks to such a price rise, significantly more tax revenue was received than had been expected and tax revenues turned out to be higher by approximately 850 million euro than had been originally planned,” he gave an example. Eamets said that, again, similarly to 2021, an unexpected extra boost to public revenue had been seen, but we probably cannot count on similar volumes in a longer-term perspective.
In his report, the Chairman of the State Budget Control Select Committee Urmas Reinsalu discussed the impact of political choices on the state budget. He spoke of the general government balance of 2021 and 2022, which had been minus 2.4% and minus 0.9%, respectively. “These figures would have been positive, and we would have had a positive general government balance if no positive supplementary budgets had been made in spring 2021 as well as in spring 2022,” he said. In Reinsalu’s words, when the positive budgets had been made, then in 2021 it had been justified by the COVID crisis, and in 2022 it had been justified mainly by the energy crisis and in a smaller part, by the need to increase national defence spending.
Looking at the recent fixed costs in the perspective of the next four years, Reinsalu said that, in 2024–2026, the fixed costs for the state would increase by 4 billion euro. “As I said, costs have been occurred, four billion euro worth of decisions have been made, and this situation where we have a more than 4% deficit in the nominal balance is planned to be solved by a project where the minus will be increased by over 1% of GDP per year on an ongoing basis,” he said. Taken separately, this means regressive income tax exemption. “Cancel it, it is a luxury product,” Reinsalu advised.
During the debate, Lauri Laats from the Centre Party Group, Hendrik Johannes Terras from Estonia 200 Parliamentary Group, Aivar Kokk from Isamaa Parliamentary Group, Reili Rand from the Social Democratic Party Group, Maris Lauri from the Reform Party Group, Leo Kunnas from the Estonian Conservative People’s Party Group and Urmas Reinsalu from Isamaa Parliamentary Group took the floor. The Minister of Finance Mart Võrklaev also took part in the debate.
Hussar believes that Estonia and Germany have good relations and long-time fruitful cooperation. “I see an opportunity to develop the cooperation between our parliaments even further, because particularly in recent years the importance of interparliamentary diplomacy has significantly increased. Due to the war in Ukraine, it is ever more important to keep contacts, shape positions and coordinate opinions in order to send a clear signal that Russia’s aggression must be condemned in every way and Ukraine must be supported in every way, and that a stronger and more secure Europe must be built,” he said at the meeting with the Speaker of the Bundestag.
Hussar stated that the defence cooperation in the European Union and NATO was excellent and the will to defend was great, and that Estonia was constantly working on increasing its defence capability. He thanked Germany for its contribution to the security of our region, including to the Baltic air policing mission. “Our cooperation in donating field hospitals to Ukraine is also very important,” he added.
According to Hussar, besides defence cooperation, economic cooperation has also improved year by year and Germany has become an increasingly important partner for Estonia. “Our cooperation in developing IT solutions, including e-health solutions, has become much closer. The use of modern technology in the health sector and digital e-health solutions could become a model for the rest of Europe,” Hussar said.
Chairman of the Foreign Affairs Committee of the Riigikogu Marko Mihkelson and Chairman of the Estonia-Germany Parliamentary Friendship Group Andres Sutt also participated in the meeting of Hussar and Bas.
Photos (Erik Peinar / Chancellery of the Riigikogu)
The members of the Riigikogu underline in the draft Statement that the Russian Federation’s war of aggression against Ukraine is the most outrageous act of aggression in Europe since the Second World War and requires an adequate legal response. In their opinion, a crime of aggression is the supreme international crime, which is the root cause of all other crimes committed in Ukraine and leads to the commission of further serious crimes, and the prosecution of the perpetrators of this crime is the obligation of the international community as a whole. “It is the duty of the countries of the world to hold to account individually those involved in planning, preparing, initiating or committing the crime of aggression against Ukraine, in addition to perpetrators of genocide, crimes against humanity, and war crimes,” the draft Statement says.
According to the Statement, the crime of aggression by its essence is a crime committed by the leadership of a country. Already the Nuremberg Charter formulated the principle that the leaders, organisers, instigators and accomplices of a war of aggression who participate in the formulation or execution of the war plan are responsible for all acts performed by any persons in execution of such plan. “Without a trial of the perpetrators of the crime aggression it will not be possible to achieve a just and lasting peace both in Ukraine and in the whole Europe,” the authors of the draft Statement point out. They believe that a special international tribunal for the crime of aggression has to be established under the auspices of the UN General Assembly to prosecute the crime of aggression committed by the leadership of the Russian Federation.
In the draft Statement, the Riigikogu sets the establishment and launch of a Special International Tribunal for the crime of aggression against Ukraine as a priority in Estonia’s foreign policy activities.
The Riigikogu calls on the Government and the President of the Republic to raise this issue at all meetings with the Governments of other countries, in all international organisations where the Republic of Estonia is a member as well as at all international forums where the Republic of Estonia participates, and to strengthen the cooperation with the Government of Ukraine in the investigation of the crime of aggression and in bringing criminals to justice. “The Riigikogu calls on national governments and parliaments around the world, especially Estonia’s allies, to actively support the establishment of a Special International Tribunal under the auspices of the UN General Assembly,” the draft Statement says.
Since the beginning of last year, the Riigikogu has adopted six Statements and one Communication to condemn Russia’s activities and to express support to Ukraine. Among other things, the Riigikogu has recognised the actions committed by the Armed Forces of the Russian Federation in the military aggression against Ukraine as an act of genocide against the Ukrainian nation, and has declared Russia a terrorist regime and the Russian Federation a state sponsor of terrorism, whose actions we must confront together. The Riigikogu has also supported the establishment of a centre for investigating Russia’s crime of aggression by the European Union in The Hague, called on the countries of the world to contribute in every way to the activities of the centre, and to continue with efforts to set up a special international tribunal.
Most recently, on 17 May this year, the Riigikogu passed the Statement submitted by 95 members of the Riigikogu in support of Ukraine’s wish to join NATO as the only way to ensure a rules-based world order, lasting peace and the security of the democratic countries of Europe.
Chairman of the Foreign Affairs Committee of the Riigikogu Marko Mihkelson and Chairman of the Estonia-Germany Parliamentary Friendship Group of the Riigikogu Andres Sutt will also participate in the meeting of Hussar and Bas.
Besides the Riigikogu, Bas will also visit the Estonian Institute of Historical Memory (EIHM) and the NATO Cooperative Cyber Defence Centre of Excellence during her stay in Estonia.