PM Kallas' address to Riigikogu on the EU policy and priorities for 2022-2023

01.12.2021 | 14:48

Riigikogu, 23 November 2021
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Honourable Riigikogu, dear Ambassadors, distinguished listeners

In some ways, this is an unprecedented situation as I am presenting to you the annual review of  the European Union policy of the government for the second time this year. The first time was in March. Of course, the development of Europe is not only discussed once a year, but on a daily basis. These issues are also national and of considerable importance, which is why the development of Europe must be treated with prudent care. This relationship also works in the opposite direction – the key national issues discussed here – the coronavirus pandemic, fossil energy prices, the climate crisis, forestry strategy, inequality, and security – are also issues of importance for the whole Europe.

The development of Estonia and the development of the European Union are directly linked to each other. Policies of the European Union  also form the integral parts of the “Estonia 2035” umbrella strategy approved by the Riigikogu and other national development plans. The document on the EU policy priorities of the government for the next two years has been presented to you, and it is an excerpt from the most important developments, activities, interests, and positions that serve the development of Estonia. If Europe is strong, Estonia is strong – and vice versa. I hope that you will be as demanding on European Union matters as you are on national matters.

As this review is, among other things, an overview of the implementation of the current policy, I would like to highlight the following from the period 2020–2021:

Firstly, we reached an agreement on the budget of the European Union and the recovery and resilience plan that is favourable for Estonia. I thank the Riigikogu for the swift ratification of the agreement on own resources. Most countries have negotiated and approved investments and reforms in recovery plans by now. Agreements on just transition and the use of structural funds will also be reached soon. I am pleased with the creation of a just transition facility for Ida-Viru County and the fact that it is estimated that almost 3.3 billion euros of the support allocated to us will be invested in to the green transition.

Overcoming the health crisis and strengthening the overall resilience of the European Union have been key issues. We have always learned from crises – borders have remained open and the COVID-19 certificate of the European Union has become a global standard of trust. There is also a good exchangeof information, countries have shared crisis aid, an extensive economic package has been set up, and both vaccines and medicines have arrived on schedule. A comprehensive approach to security, crises, and resilience is here to stay.

Dear Riigikogu!

In March, I said that “aiming to reach the centre of European politics and decisions has been and should always be in the best interests of Estonia in every way, as this is the strongest guarantee for a small country for being able to determine our own fate and future.” Silence goes unnoticed and shouting is ignored, so we must inspire and be trustworthy and smart in the common interest. We can think of solidarity as an enlightened self-interest. The government does not want to turn its back on friends and allies. There is an old saying that a friend in need is a friend indeed. Demand and criticism are allowed if they serve the purpose of being forward-looking, and if for some reason Estonia should say “no”, then it should do so only to offer an even better solution.

Estonia consistently stands for European values and works to ensure that the voice of the European Union is effective and united in the world. It is important for Estonian people and companies that Estonia stands up for the four fundamental freedoms of the European Union and the internal market, and continues to stand up for the fifth fundamental freedom – the free movement of data – because data is at the core of the twin transition. Estonia supports the ambitious digital revolution and green transition. However, we want to make sure that attention is also paid to the social aspects of the transition – so that we do not forget the people in the middle of it all or leave anyone behind when implementing change. The people must be at the centre of green transition.

Dear Riigikogu!

The European Union is and will remain a source of peace and security. For me, the most important keywords for the coming period are trust and trustworthiness. Hando Runnel has said that “Sõber tunneb sõpra silmist, vaenlast vanast sõjafilmist” (a friend knows a friend in sight, and an enemy from an old war film). The heroes of old war films in the European Union have buried the hatchet but it is being replaced with new conflicts, driven by autocracy that fears its own people. Unfortunately, the isolation and forms of exercising authority that have accompanied the health crisis have exacerbated this authoritarian trend. Europe has also been a project of freedoms which means that these tendencies are particularly painful. Despite our desire to keep the world open, it seems to be on the path of polarisation again. Despite our belief that connections create cooperation and prosperity, they are also a source of conflict and a policy of discontent. Until now, we believed that the global economy and the exchange of ideas will advance all parties, and with it, the development will inevitably move towards democracy and a free market economy. We were naïve to believe that everyone wanted prosperity and good governance, technology and democracy, and to get rid of both authoritarian leaders and corruption. What has been achieved is also being used against freedom and for harassing neighbours and minorities.

By being in constant contact with others, we constantly compare ourselves to those who are better than us. Moderate envy is a driving force, but constant comparison with those who are better than us can cause endless dissatisfaction. We live in a time where there are more conflicts than ever before. In a polarised world, we inevitably have to make better choices about who we work with, who we are connected to, and how much interdependence we allow ourselves to ensure that we are in charge of the dependence and not the dependence in charge of us.

Dear Riigikogu!

Well-known foreign policy expert Mark Leonard says in his recent book that in the nuclear age, the cost of war is imperceptible. As a result, connectivity wars have become a new way of pursuing policy by other means. They cost less. They are more effective. As a result, they are becoming more and more common. The more they spread around the world, the more deadly they become compared to conventional warfare.Trusted connectivity has great potential. Globalisation and networking have helped to create new opportunities not only for small countries and start-ups, but have helped a large part of humanity escape poverty. The European Union, as the largest trader in the world, has played a key role in creating these new opportunities, both inside and outside Europe.

At the same time, connections and connectivity as a new and inexpensive way of conflict is a new level in which trust plays a key role. The world is not made up of black-and-white choices, because they are first and foremost issues of value in regards to trust. Although interest or geography may be the basis of cooperation, trust is based on common values, principles, and the agreements based on them. If values and rules differ, both border agreements and fences can reduce mistrust, as the poet Robert Frost has said, “Good fences make good neighbours.”

We can see this at the moment at the border between the European Union and Belarus, which is very close to us. Poland, Lithuania, and Latvia are defending the European border. The European Union cannot submit to the extortion of a dictator and the hybrid attack must be decisively stopped. Europe must act in unison here, and Belarus must allow the people who are being weaponised to return to their countries of origin. Belarus is responsible for systemic human rights violations against both its own and foreign citizens. Our actions cannot create a new channel for human trafficking in the European Union.

Dear Riigikogu!

The main driving force behind the European Union policy priorities of the government is to increase cooperation and trust, but also interdependence and solidarity between allies and partners within Europe. We must also offer these opportunities for cooperation to countries and organisations that stand up for a rules-based order and want to create a trust-based future. The human-centred digital revolution and the pursuit of climate and biodiversity goals in our operations and supply chains also play a part in this. Trust cannot be based on turning connections into traps, people into tools, or the common living environment into an unviable one. The focus of Tallinn Digital Summit on furnishing the idea of trusted connectivity provided timely input to the soon-to-be-launched Global Gateway initiative, as well as to the Summit for Democracy convened by US President Joe Biden. I hope that we will reach a common understanding with like-minded countries on what the value proposition of trusted connectivity should include in building infrastructure.

On the other hand, we should also accept that, against the background of growing authoritarianism, the world has not been moving towards democracy and free market economy for some time now. We are therefore forced to tune in to competition in a world that wants to be very different and presents us with systemic challenges. Both our crisis experiences and the green transition and digital revolution offer a great opportunity to break off mistrustful relationships and get rid of unhealthy dependencies in critical issues concerning the resilience of the state, such as public health, communications, and energy. The use of migration as a weapon, both in the south and in the east, has finally led the European Union to reassess the need for common border standards and investment into the external borders. The Single European Sky is not a place for those involved in human trafficking. The increasingly precise identification and attribution of the origins of cyber-attacks clearly shows us where the vulnerabilities, which will become more serious with digitalisation, are. There must be zero tolerance for corruption and money laundering. Our technological capabilities, as well as resilience to health crises, food security, and security of energy supply, are covered by the comprehensive approach to security. We need to have tools that are effective in combating damage to connections and trust. Our connections must be trustworthy and crisis-proof. All these areas are also reflected in government policy.

We have been catching up with the EU average for 30 years. Our superpower has been the ability to not use the word “impossible” – be it joining the European Union, the eurozone, NATO, or something else. This superpower has brought us to where we are and it will take us further. Is climate neutrality in three decades impossible? What would Estonia be like in three decades if we answered “yes”, and what would Estonia be like if we answered “no”? Let me remind you that we embarked on a journey that led to the restoration of our independence precisely because of the pressure on our environment. We have about as long to achieve climate neutrality as it has been since we regained our independence. Just over half of this path will have to be traversed in the next decade. This is about as long as it took us from regaining our independence to becoming a member of the European Union and NATO. The government will send its views on the main standpoints of the European climate framework to the Riigikogu later this week. To paraphrase Mart Nutt, there is no alternative to the green transition and the free-market economy must play a key role in finding solutions. Sustainability is key for our development. How?

Estonia has been successful thanks to its curiosity in technology. We have realised the exponential growth enabled by digital technology. This is evidenced by the number of both unicorns and start-ups, the ability to build companies and technologies, and to attract capital and the best people from around the world. Sten Tamkivi, one of the initiators of the Tiger Leap project, believes that this experience should be used for the next green transition.

Our ability to understand exponential growth must now meet the ability to think systematically, including understanding that the planet has natural boundaries that, if left unchecked, can permanently damage ecosystems and trigger irreversible change. The necessary changes are not just technical. The President of the Academy of Sciences Tarmo Soomere has said, “The latest technology is not always the best solution. Smart application of traditional skills, adaptation to local conditions, and understanding and supporting ordinary people are becoming more and more important”. We have no reason to ban uninsulated houses, beef burgers, wood-burning sauna stoves, or the usage of cars with internal combustion engines.

However, when planning for the future, we must bear in mind that the green transition means that the environmental impact of all end products, services, and also supply chains is increasingly being taken into account. Not only the energy produced but also the energy consumed and its impact on the environment will start to play a role in business plans, ratings, and loan agreements.

As we know, the price of the green transition is not only the volume of investment required, but also the price we have to pay if we do not succeed with the green transition. Estonia is not an island or a planet that will not be affected by these consequences and problems – the projected increase in global temperatures and dependence on fossil fuels will impact us both directly and indirectly, today and tomorrow. After all, we do not want what is currently happening in many parts of Europe under the guise of autocratic authorities to become the norm in the future, with millions and billions moving instead of thousands.

The availability of sustainable, affordable energy is key to achieving both prosperity and climate goals, as well as attracting new green investments in the future. Entrepreneurs in German industries will be directly exposed to this through the supply chain law which will enter into force next year and it will certainly be amplified through the Nordic countries, and this will complete our circle of major investors. Thus, the market itself will move towards cleaner products and services.

Dear Riigikogu!

I claimed in the spring that climate neutrality could be thought of as a transition to clean energy. Our separation from the common energy network with Russia and Belarus and the synchronisation with Central Europe are progressing according to schedule. Although Estonia has been talking about this for a very long time, one of the new proposals is that imported electricity must be produced in a way that takes climate goals into account. Exporting emissions looks good on paper, but is actually nothing else than greenwashing – competition in Europe must be based on trust and operate on an equal footing and on the basis of fairness. The trust gap that allows greenwashing must disappear, and the border adjustment mechanism will help create legal certainty to boost market access for clean energy.

In 2020, for the first time, renewable energy sources in the EU outperformed fossil fuels as the largest source of electricity, producing 38% of electricity, compared to 37% for fossil fuels. We have increasingly removed and will continue to remove obstacles to planning for wind power generation, both onshore and in the Baltic Sea. We are developing a wind farm in cooperation with Latvia and in the long run, planning an electricity network of the EU countries bordering the Baltic Sea and a pan-European hydrogen network. It must also be possible to produce  bioenergy that meets the sustainability criteria and the “cascade principle” during the transition period. Safe and secure nuclear energy must have a role as transitional energy. Nuclear energy already exists in the portfolio of Estonia through the Nordic energy market and will continue to be a welcome alternative in the future. Gaseous fuels also remain in our portfolio as transitional fuels. Coming back to the trust and use of connections in conflicts, I welcome the principled decision of the German regulator not to certify the Nord Stream 2 pipeline if the conditions are not met.

Last Thursday, the government launched a review of the energy development plan, and two weeks ago, we decided to review the mobility development plan on the basis of the European climate agreements. It is clear that electricity will play an important role in future transport, but what role hydrogen will play in Estonia in the future must be answered by the 55-million-euro hydrogen programme and the hydrogen roadmap to be completed by the end of the year. We have set up an expert panel within the Green Policy Steering Committee of the government, and I hope that their proposals will help us come up with the most effective and cost-efficient measures.

Dear Riigikogu!

The European Union is just as effective as we want it to be. Estonia stands for a strong, developing, and growing European Union and for Estonia to be an effective member. Europe is still a peace project, but we have to deal with a changed situation of hybrid conflicts.

We are used to thinking of the European Union as a regulatory superpower, an enforcer and mediator of commonly agreed norms. However, Europe is also a project of freedoms that must not be forgotten during the pandemic. The European Union is present in the lives of people on a daily basis, the best examples of which are not only the Erasmus programme and the euro, but also vaccines and the COVID-19 certificate. In tackling the hybrid crisis, it is good to see that the situational awareness of Europe has improved and everyone is ready to work hard. We also see real and effective support, cooperation, and solidarity on a daily basis. Citizens want more Europe..

The Riigikogu will have the opportunity to contribute to strengthening the image of Estonia as a member of the European Union this year, as a number of laws are awaiting adoption. This will also affect whether Estonia enforces its commitments on time and is still a pro-European internal market supporter.

Thank you!

Government Communications Unit