Siim Kallas, a former Estonian prime minister who led Estonia’s currency reform, dies at 77
He was not on the list.
Siim Kallas, a former Estonian prime minister and European
Commission vice-president who helped give the newly independent country its own
currency and economic footing, has died aged 77.
His daughter, Kaja Kallas, the European Union’s foreign
policy chief and herself a former Estonian prime minister, announced his death
on Saturday morning.
“It is with sadness that I must announce that my dear
father, Siim Kallas, died last night,” she wrote on social media.
Kallas, who died in the early hours of 22 August, was one of
the central figures in Estonia’s transformation from a Soviet republic into a
liberal, market-based European state. He led the 1992 currency reform, founded
the Reform Party, served as foreign and finance minister and was prime minister
from January 2002 until April 2003.
President Alar Karis described him as a statesman who had
helped shape modern Estonia through “bold and forward-looking goals and
actions”.
“The era of the Singing Revolution, the restoration of
independence and the construction of a modern, European free Estonia required
precisely that kind of free thinking and courage to act,” Karis said. “He
helped our country become more confident, stronger and more European.”
The achievement for which Kallas will be remembered most was
Estonia’s break with the Soviet monetary system. As governor of Eesti Pank, the
country’s central bank, from 1991 to 1995, he led preparations for the reform
that replaced the Soviet rouble with the Estonian kroon on 20 June 1992.
The kroon was fixed at eight to one against the Deutsche
Mark and operated under a strict currency board system, under which the money
supply had to be backed by foreign reserves. The arrangement curbed the central
bank’s freedom to create money and imposed monetary and fiscal discipline at a
time of severe inflation and economic upheaval.
Eesti Pank has described the reform as the cornerstone of
Estonia’s rapid economic development and integration with Europe. Raivo Vare,
an economic expert and former government minister, said on Saturday that it had
been “one of the pillars of Estonia’s success” and “a firm anchor” in confused
times.
Vare said international financial institutions had advised
Estonia not to leave the rouble zone, hoping that it would eventually
stabilise. Kallas and his colleagues resisted that advice. “The Estonian side,
led by Siim Kallas, dug in its heels, went its own way and did the right thing,
as history has since shown,” Vare said.
Kallas was born in Tallinn on 2 October 1948 into a musical
family. His father, Udo Kallas, was a clarinettist and saxophonist. His
maternal grandfather, Eduard Alver, was an influential lawyer who became the
Republic of Estonia’s first chief of police and the first commander of the
Estonian Defence League.
After graduating cum laude from Tartu State University in
finance and credit, Kallas joined the finance ministry of the Estonian Soviet
Socialist Republic. He was a member of the Communist Party of the Soviet Union
from 1972 until 1990 and later worked as deputy editor of the newspaper Rahva
Hääl.
Yet he was also among the early advocates of Estonian
economic self-determination. In 1987, together with Tiit Made, Edgar Savisaar
and Mikk Titma, he published the Self-Managing Estonia proposal, known by its
Estonian initials as IME. It called for economic autonomy, a market economy and
an Estonian currency while the country was still part of the Soviet Union.
His time at Eesti Pank was not without controversy. In 1993,
the central bank lent $10 million to the North Estonian Bank, which transferred
the money into an investment linked to the Swiss fuel company Paradiso SAL.
Only $2 million was recovered.
Kallas and his legal adviser, Urmas Kaju, later faced
criminal charges including abuse of office and providing false information.
Both were acquitted. After part of the case was returned for a new hearing,
Kallas was acquitted again and prosecutors ended further appeals in 2000. The
affair nevertheless followed him for decades.
Kallas co-founded the liberal Reform Party in 1994 and
became its long-serving chairman. He was Estonia’s foreign minister from 1995
to 1996 and finance minister from 1999 to 2002 before forming a coalition with
the Centre Party and becoming prime minister. His government completed
Estonia’s accession negotiations with the European Union and NATO, although the
country formally joined both organisations after he had left office.
In 2004, Kallas moved to Brussels as Estonia joined the EU.
He served as a European Commission vice-president for a decade, first
overseeing administration, audit and anti-fraud and later transport. In the
latter post, he led the development of the Trans-European Transport Network, or
TEN-T, and the adoption of legislation that substantially increased funding for
cross-border infrastructure.
He later returned to Estonian politics, stood unsuccessfully
for the presidency in 2016, served as mayor of Viimsi and was elected again to
the Riigikogu in 2019 and 2023. He left parliament and retired from politics in
September 2024.
Prime Minister Kristen Michal, the present chairman of the
Reform Party, said Kallas had been a role model to his generation, known for
his good humour, broad reading and curiosity about the world.
Outside politics, Kallas spent 13 years as an editor and
presenter of Mnemoturniir, a long-running Estonian Radio quiz programme. He was
married to Kristi Kallas and had two children, Kaja and Ülo.
