No. 18

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Lacking a Head

  • Helle Ruusing

    Editor-in-Chief, Information Adviser of the Chancellery of the Riigikogu

Signs of the impending global economic crisis could be seen for many years, but did not receive sufficient attention. It was more convenient and pleasant to hope that, if a phase of economic decline did set in, it would not prove a very serious one. Now things look different.

No one ventures predictions any longer about how protracted the decline might be. Instead, we tend to see the other extreme: the negative news has a snowball effect. Today people are tied to banks either through loans or investments. Losses in the money market affect many people, and as a result governments quickly leapt to the support of the financial sector. To-day’s economy is a global one, and the crisis, which started in affluent Western countries, will inevitably reach developing countries as well, with the potential of causing major social problems there. An unstable China would already be a very serious problem.

There is probably not a single country in the world not wracking their brain over how to keep the crisis under control. The greater the impact of the recession on ordinary citizens, the greater the call for protectionist behaviour from governments. Politicians everywhere must inevitably take into account their electorate’s interests.

All of the above holds true for Estonia, too. We have truly had a rough time in the last year over our inability to adequately assess our situation. Even such authorities as the Ministry of Finance and Eesti Pank issued incorrect economic growth forecasts. The ruling coalition has also wrestled with balancing the budget, just like the cart-pulling swan, pike and crayfish in Krylov’s fable. The Estonian government has not sent out very clear messages as to what measures it plans to apply in a deepening crisis. Estonian entrepreneurs, who currently stri-dently criticize the public sector, have not made the right decisions, either, despite enjoying a very favourable economic climate for years. The economic crisis will not be resolved solely by a new Employment Contracts Act or austerity in the public sector, even though both are necessary. Politicians will evidently have to put together more systematic plans, whether it is the adoption of the euro, flexible work marketplace, administrative reform or other measure that is considered necessary. Neither should it be forgotten that all plans should be explained to the public. The economy heals itself in times of crisis; unlike entrepreneurs, politicians have a responsibility for the functioning of the state.

Goodwill and readiness for cooperation could be keywords both within Estonia and abroad. The temporary state of lacking a head will be supplanted by order and organization, one way or another. Much of the price of achieving it depends not only on the state and the govern-ment but above all, people’s ability to adapt to new circumstances.

In this issue, Andra Veidemann writes of her experience as cultural attaché in Moscow in an essay, “The Russian experience”. The reader will also find a conversation circle on the topic of the economy. The participants were Eesti Pank’s Chairman of the Supervisory Board Jaan Männik, University of Tartu professor of International Business Urmas Varblane, prime ministerial economic advisor Kalev Kukk and Member of the Riigikogu Taavi Veskimägi. Supreme Court adviser Liina Kanger analyzes judicial practice in claims for damage on the basis of the State Liability Act. There is also talk of political culture, the situation with gen-eral education, the possibilities of direct democracy, procedures for calculating parental benefits, Neighbourhood Watch and the activity of the Supreme Council of the Republic of Estonia. Member of the Riigikogu Igor Gräzin writes about Eurorealism, and Mati Raidma draws security lessons from the Georgian conflict.

Full article in Estonian

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