3.01.

2007: ESTONIA: PRESIDENT AND PM DISCUSS

RELATIONS WITH RUSSIA AND ESTONIA´S FUTURE
UNCLAS TALLINN 000005

SIPDIS

SENSITIVE SIPDIS

C O R R E C T E D C O P Y (ADDED
EUROPEAN POLITICAL COLLECTIVE)

E.O. 12958: N/A

TAGS: PREL, EU, RU, EN
SUBJECT: ESTONIA: PRESIDENT AND
PM DISCUSS RELATIONS WITH
RUSSIA AND
ESTONIA´S FUTURE

1.(U) Summary. After visiting the

Embassy to sign the condolence
book for President Ford, both
President Ilves and Prime Minister
Ansip stayed to chat over coffee. Both
expressed optimism that the
March parliamentary elections would
produce a better government.
Ansip stated that his Reform Party
would never agree to serve in a
government with Savisaar as Prime
Minister or surrender the Foreign
Ministry to Savisaar´s Center Party.
Both Ilves and Ansip were also
highly critical of the current direction
of Russian policy.
Finally, both the President and the PM
believe that Estonia´s labor
shortage is a problem, though Ansip
said he thought a greater
problem is Estonian workers´ lower
productivity. Neither was eager
to see Estonia open up to economic
migrants from Russia. End
Summary.

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RELATIONS WITH RUSSIA
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2.(SBU) During his visit to the

Embassy, President Toomas Hendrik
Ilves mentioned that he has tried but
failed to come up with any
rational explanation for the Russian
Government´s increasingly
anti-Estonian rhetoric over the last
few months. His only
conclusion is that Russia is simply
behaving irrationally.
President Ilves then quoted an
ambassador from an EU country with
whom he met in Moscow while he was
Estonia´s Foreign Minister. The
ambassador told Ilves that "Russia is
a county in need of
psychiatric assistance rather than
economic aid." President Ilves
said that in face of these irrational
Russian attacks the best
policy choice for Estonia is to remain
calm and not react. Ilves
said that current Russian behavior
underlines why it is so important
that Estonia be as fully integrated as
possible into both NATO and
the EU.

3.(SBU) During his visit to the

Embassy, Prime Minister Andrus Ansip

said he was grateful that Ilves is

president because he carries with
him no Soviet baggage as he grew up
in the United States. This
allows President Ilves to make such
statements as Estonia would be
best off ignoring Russia´s attacks and
not have to worry about the
domestic political consequences of
alienating Estonian voters that
Ansip would face if he made similar
remarks. Ansip said that after
Russia´s President Putin met with EU
leaders in Finland and managed
to offend just about every major
European leader in the process,
Estonia is no longer one of the lone
voices in the EU pointing out
Russia´s irrational behavior.

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MARCH PARLIAMENTARY ELECTIONS
AND THE CENTER PARTY
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4.(SBU) As he has indicated in a

spate of year-end interviews, Ilves
said he will offer whichever party
gains the greatest number of
votes in the upcoming parliamentary
elections in March the first
opportunity to form a new
government - even if that should be
the
Center Party. Under Estonian law, the
winner will have two weeks in
which to form a government.
President Ilves doesn´t believe the
elections will result in any radical
changes in Estonian politics as
the Center Party and the like-minded
People´s Union are unlikely to
win enough seats to be able to govern
on their own. In the unlikely
event that such a coalition is formed,
however, Ilves said that
"unfortunately" he would have to
become "much more active" in order
to provide balance. But barring such
an occurrence, Ilves believes
that even if the Center Party´s is part
of the next government, its
populist approach would have to be
balanced out by other
right-leaning parties in the coalition.

5.(SBU) PM Ansip said that his party

´s goal in the upcoming
elections is to win more votes than
any other party. Only after the
elections will his Reform Party begin
thinking about possible
coalition partners. While PM Ansip
seemed happy with a recent poll
that indicated that 37% of those
polled would like to see him remain
as PM, he expressed his concern that
this support must first
translate into votes for the Reform
Party. When asked to speculate
about potential coalition partners
after the March elections, PM
Ansip mentioned the possibility of a
coalition with the other major
right-of-center party: the newly
joined Pro Patria and Res Publica
Union. But PM Ansip did not rule out a
new coalition with the
Center party. However, he stated
quite clearly that Reform would
never agree to a coalition with the
Center Party if this would make
Center´s Edgar Savisaar PM, nor
would Reform ever agree to give
Center the Foreign Minister´s
portfolio.

6.(SBU) As PM Ansip is currently in

coalition with Edgar Savisaar´s
Center Party, his criticism of the
Center Party was relatively
tempered. Perhaps another reason
that PM Ansip likes Ilves is that
the President is able to speak his
mind more freely on this topic as
well. Ilves called Edgar Savisaar
Estonia´s Hugo Chavez, a cheap
populist. Ilves stated that it is this
populism that keeps Savisaar
going. Elsewhere, someone like
Savisaar - someone who taped his
political opponents back in the early
1990s while Minister of the
Interior - would have been discredited
long ago. President Ilves
also implied that he does not trust
Savisaar´s Russian contacts,

pointing out the as the current

Minister of Economics Savisaar
regularly meets with Russian officials
during his trips to Russia
but never brings along anyone from
the Estonian Embassy. As a
result, no one in the Estonia
Government knows what Savisaar
discusses with his Russia colleagues.

7.(SBU) President Ilves´ hope is that

the March elections will bring
a new government that is less corrupt
and less prone to scandals.
He was particularly critical of another
current ruling coalition
member: the People´s Union. The
People´s Union has been at the
center of two recent scandals:
Minister of Agriculture Ester Tuiksoo
and the Werol rapeseed oil scandal
and ex-Minister of the
Environment Vilju Reiljan and the land
board scandal which forced
his resignation. It was apparent that
President Ilves hopes for a
new ruling coalition that will exclude
both the Center Party and the
People´s Union Party. While Ilves is
supposed to be the president
for all Estonians, he made it clear that
there are some Estonians
with whom he would prefer to work.

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ESTONIA´S ECONOMY
-----------------

8.(U) Turning to economic issues,

President Ilves acknowledged that
Estonia´s labor shortage will be a
major problem. Ilves said that
the big issue for debate in Estonia is
whether or not to import
labor from Russia and the former
Soviet Union, but added that
discussion of this should wait until the
Estonians can gauge the
impact of Romanian and Bulgarian
membership in the EU. Ilves said
that most of the big Western
European countries have closed their
doors to labor from Romania and
Bulgaria, so there´s a chance that
some Romanians and Bulgarians will
be interested in coming to work
here in Estonia.

9.(U) PM Ansip does not like the idea

of welcoming new immigrants
into Estonia´s labor market. First, he
argued that Estonia is still
trying to deal with the last wave of
immigrants brought in to supply
the Estonian labor market (i.e., the
Soviet-era immigrants brought
in from around the Soviet Union to
man Estonia´s factories). PM
Ansip stated that Estonia first needs
to finish this integration
task before embarking on any new
ones. Second, he said that there
is still room for the Estonian economy
to grow without expanding the
labor force. Ansip stated that Estonian
productivity is still only
half of what it is in Finland or
Sweden. In other words, Estonia´s
economy could continue to grow
without adding new workers.
However,
he did express a hope that Estonia´s
growth rate would cool off to
around 8-9% in 2007 rather than
continue at the 10-12% it
experienced in 2006.

GOLDSTEIN