Wednesday, February 03, 2010

February Mailbag of Legislation

More lawmaking commentary today. Two interesting bills are up for a vote in the near future:

1) Establishing an LLC without cash.

There are a bunch of different ways to do business as an individual in Estonia - from signing ad-hoc contracts with your customers (the way I do it with translation agencies), to registering as self-employed, to starting a limited liability company.

Self-employed status gives you a bunch of benefits, such as a VAT number and the ability to write off business expenses, but also some inconveniences in terms of how you pay tax. Incorporating as an LLC is the best way to go, and the process is streamlined: you can do the entire thing online in half an hour. The big hurdle is that you need to have the starting capital, 40,000 EEK (~2500EUR). Up to half of it can be made up of material assets without additional paperwork, but you still need to have a pile of cash that will be tied up in the business. You can get the money out of the company's account right after it's established, but what if your business doesn't require any material investment? The only tools of the trade I need to run my freelance work are a netbook and an Internet connection. Now, I could use the LLC's starting capital to pay for both, VAT-free - but it's still very inconvenient to tie up 40k in a business with very little up-front investment and negligible recurring costs.

The new bill will allow an LLC to list the up-front capital as the founding partner's liability. Basically there's still 40k on the books, but it doesn't have to be an actual pile of cash or a bank balance. If someone has outstanding claims against my company, they can sue me personally to take up to 40k's worth of my personal assets.

The upshot is that anyone with a bright idea can incorporate over a lunch break, and start doing business immediately. Considering that we're a small country that is trying to stimulate high-tech, dynamic businesses where the principal investment is the owner's time and effort, this is an excellent move, and frankly I'm a bit disappointed that it took the government so long to get to it.

2) Mortgages to become non-actionable.

The gist of this is that a borrower's liability will be limited to the collateral. When a homeowner can't make the mortgage payments, the bank's only recourse will be to sell the house, and the borrower gets to walk away from it. Currently, the borrower is liable for the actual loan amount, so if the house is worth less than the balance of the loan, he'll have to keep paying. The only way to wipe out the debt is to go through a personal bankruptcy, which means five years of constant supervision by a court-appointed administrator.

I don't actually like the idea, because in my opinion the government only has a very minimal responsibility to protect people from their own stupidity, and overpaying in a booming market is the sort of mistake everyone should be able to make on their own. Certainly the economic liberals in power are also against the idea, as are the Swedish banks. Normally I would dismiss it as just another piece of populist legislation that has no hope of passing - it was introduced by the Social Democrats - but the BBN article claims there is support for it in the ranks of the coalition as well.

I'm pretty sure hell freezes over before Reform supports the bill (but then Jõgeva has been seeing -30C temperatures this winter), but there is at least one line of reasoning that might convince some IRL members with re-election jitters to go along with the plan: it's not like we're overly sympathetic to the plight of the banks. The effects of the property bubble's burst in Estonia could have been far more dire if we didn't have relatively strict lending rules in place already - most importantly, the loan amount was a direct correlation of the applicant's income, there was no widespread practice of giving "interest-only for the first three years" type mortgages to deadbeats trying to flip properties for a short-term profit. The insane growth in Estonia's real estate prices was precipitated by low interest rate margins and growing salaries.

So stricter-than-elsewhere banking regulations made the inevitable crash not as disastrous as it might have been, and by the same token, new and even stricter banking regulations are probably a Good Thing(tm) as we're recovering from the credit crunch. I still don't think it's necessarily a good idea, but if the Riigikogu's right wing sees a need to engage in some kind of populism, this is one of the better bills to support: it is straightforward in principle, has no immediately obvious loopholes, and its primary negative consequence is that banks will be forced to only issue home loans to people who can afford them, on properties which are more or less reasonably priced. Interest rates will go up, the construction industry will suffer another hit, and fewer people will be able to build equity rather than just spend a portion of their income on rent, but at least we'll have learned from our mistake and will be forced to rely on something other than real estate for our economic growth.

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Tuesday, December 22, 2009

We made it. The crap decade is just about done; let's hope the next one will be better. The 21st century started on 9/11; I think the twenty-teens will be remembered as having started in '09, with Obama's inauguration. In this country, should the next decade really be better, it will have started on 2011 - when we adopt the Euro. The Bank of Estonia says we're quite likely to meet all the criteria. The government is saying that the budget is filling up on schedule, the cuts in public spending have done their job. If this pans out, it will be a great example of an Estonian truism: the Reform party is the one you want to be in charge when the economy needs to be fixed, even if they're not to be trusted with actual politics. There was a recent scare with a leaked European Commission document that was less than generous towards the Baltics, but Germany's Finance Minister says we're fine. I'm still not absolutely convinced we'll make it, but the government sounds like they're quite confident about it - much more so than I'd expect from a hail mary.

The AnTyx award for positive example of the moment goes to SmartPOST, the package shipping company that lets you drop off and pick up packages at your local supermarket, and even ship commercial stuff like eBay-equivalent purchases. They've just expanded their services to Finland, but I'm more impressed by the fact that their automated shipping stations are being used in Italy, with negotiations to bring them to other EU states. This is a technology and concept that was developed in Estonia, and the equipment is being built in Viljandi. Exactly the kind of high-tech, ingenuity-based export that the country needs. Estonia's competitive advantage is the ability to roll out and debug an infrastructure on a relatively small and manageable scale, before deploying it in far larger markets. This needs to be exploited, and SmartPOST is doing just that. Good on them.

The AnTyx award for snatching defeat from the jaws of victory goes to Coffee In. This is a local coffee chain, started in Tartu and expanded to Tallinn. Unlike Reval Cafe or other competitors, it's not designed as a place to hang out - the idea is that you grab your coffee on your way to work. Their shops used to be all over Tartu, including one in the lobby of my office building, and their loyalty program gave you ever 5th (or something) drink free. Then the majority of shops closed down, and the loyalty program got progressively worse - and now they've replaced a flat discount with a preposterously complicated points system, where your benefit for each month depends on how many drinks you had in the previous month. Considering that the only Cofee In locations left are in shopping malls, and not anywhere near where I might actually want to grab a latte on the run, the company is an excellent example of a good idea being killed off by crap management. Which is a damn shame, because I quite like their coffee.

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Monday, November 16, 2009

Ansip Grows Balls Once Irrelevant

Tangent: the previous post was number 500 on AnTyx. A little over four years down. Not going to celebrate terribly, but still a nice little anniversary. Also, since Baltlantis seems to have gone the way of the dodo, this article also appears on the Estonian Free Press; I've turned off the comments here, so go to EFP to leave feedback.

Interesting article in Postimees this morning. Interview with the Prime Minister, who has some things to say about his main political rival, Tallinn mayor Edgar Savisaar.

Speaking to the paper, PM Ansip called on Savisaar to apologize for his claims that the Estonian kroon would be devalued right after the election, and that senior citizen benefits would be cut. Savisaar had said on public record, in his own articles, that he was completely sure it would happen - so now he ought to either apologize, or explain why his predictions didn't come true. Ansip also publically questioned the publicity stunt of purchasing half a million kroons' worth of potatoes and firewood to hand out to Tallinn's poor, and then spending two million kroons on advertising the fact. Ansip also mentioned that Savisaar's claims were directly contradicted not only by objective reality, but by the opinions of the IMF, the European Commission, the Moody's rating agency* and The Economist magazine.

Bold words from the Prime Minister, and the kind of adversarial debate that Estonia's politics - and particularly the right-wing parties - sorely need. All the more baffling that it comes after the coalition utterly failed in Tallinn's municipal elections. Where was Ansip during the campaign? Why wasn't stuff like this on Reform's campaign posters? If Savisaar made the local election all about national politics, and fully exploited his position as the capital's incumbent mayor, then why wasn't Ansip out there, actively attacking the Centrists' statements, policy and record?

Not that I'm calling for more ad hominem attacks and name-calling in election campaigns - but Ansip seems to be talking about factual errors, broken promises and disingenuous claims. The sort of thing that you would expect to be shouted from the rooftops before the elections - back when it could make a difference.

Without being an inner-circle Reform strategist, I can only think of two points. One, the coalition has given up ground in hope for a better attack opportunity in 2011. I have a sneaking suspicion that Reform's next prime-ministerial candidate will be Andres Lipstok, who, as the head of the Bank of Estonia, will have a tremendous platform should the country succeed in adopting the Euro a year from now - just before the next parliamentary elections. In order to secure the top job, Reform is willing to give Savisaar all the rope he needs to hang himself; and if we fail to get the Euro, the coalition will certainly make a powerful stab at blaming Tallinn's excessive borrowing for driving up the budget deficit past the Maastricht boundaries. Remember, Mart Laar was incredibly fortunate to get left out from Ansip's cabinet, and thus escape any of the blame for the Bronze Soldier debacle; did the Reform Party, knowing that they were very unlikely to get control of the capital, throw the fight in order to make the capital's voters blame Savisaar for all their ills 15 months from now? Of course, I am probably giving them too much credit.

The other point is based on the same assumptions. Ansip knows he will not survive another direct election, he will not be Prime Minister after 2011, and the only reason why his government still scrapes together enough dissenting opposition votes to push legislation through the Riigikogu is because he's the consensus scapegoat. Given this, is Ansip really that motivated to apply his entire effort in support of Keit Pentus and the party whips?

*Not that financial rating agencies are relevant in 2009. But hey, the article mentioned it.

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Tuesday, October 13, 2009

I don't care, just vote against the incumbent.

It's less than a week until the election. I've already voted online; ended up choosing Mihhail Lotman on the IRL list, for no better reason than the fact that my parents were students of his father, the famous semiotician. Lotman is a university person, and while certifiable intelligence in no way precludes one from making really bad decisions, it's as good a differentiator as I'm going to get in this municipal election. IRL's list also includes Ene Ergma, not that there is any chance she'll actually stick around to serve on the city council. The candidate list regulations for Estonian elections are disappointing.

I haven't had that much cause to be unhappy with the existing Tartu city government, but they've done nothing to impress me, either. Reform's problem these days is an utter lack of vision. They've always gotten by quite well on being the quietly competent party, but that will not be enough to overcome the bad will accumulated by the government in a crisis. IRL doesn't have anything particularly interesting to say either (they promise to fix the appalling public bus system in Tartu, but I don't think they can), but they're inoffensive to me, and just nose ahead on the respect gained from the candidates' willingness to hang out near Kaarsild at 8am on a weekday, handing out coffee.

The Social Democrats are desperate enough to resort to spamming, on the one hand, and extremely dubious political statements on the other. Having gotten kicked out of the coalition for not playing nice, they are still under the delusion that they matter, and have now suddenly remembered that they are supposed to be a left-wing party. So they came out in support of the latest Keskerakond bright idea: making mortgage loans non-actionable. The idea being that a loan is secured only by the real estate; if the owner is underwater, he can just walk away from it. (Nevermind that Estonia already has a personal bankruptcy law, which can be applied to people who are genuinely in trouble.) It's pandering to an irresponsible, infantile mass. I'd long since stopped expecting anything better of Savisaar, but SDE should be ashamed.

Of course, the election is mostly about Tallinn, and the vast majority of the campaigning is focused on it. Knowing he's lost the reasonable vote, and completely devoid of any actual ideas on how to improve things, Savisaar's defaulted back to "Ansip sucks dicks" and "vote for me, I'll give you potatoes". The opinion polls seem to suggest that there is a chance of a coalition keeping the centrists out of power in Tallinn this time around. That would be nice.

Who else is left? Rahvaliit? Very funny. The Greens? They're a bunch of utter morons, opposing anything they can if it brings them some semblance of street cred among the hippies.

Somebody in my blog feed suggested we reintroduce a property test for voting rights, and while that's undemocratic, I can't help but go "hmm". Freeloaders who refuse to take responsibility for their choices, and then expect the state to bail them out, are not the sort of people who should be allowed to have a say in the way a country is run. Most of the serious social stimulants in this country are already in the form of income tax breaks. If you've been actually receiving cash from the state for more than 2 years (to account for maternity and temporary unemployment insurance), you have a conflict of interest, and are not allowed to affect the political process. Ah, I can only dream...

Something called Uus Laine in Paldiski actually paid Tallinn's nightgame host to do a free-to-play session in the port city on election day, noon to 6pm. The only condition is that all cars need to be carrying flags with the party's logo. I don't think there was much interest.

Here's a parting thought. It might be a downer, but go and vote. If you have no good motivation to vote for any particular party (much less a candidate), then just vote against whoever was in power last time. As usual: if you don't vote, you don't get to bitch.

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Tuesday, June 09, 2009

102 509

I'm not jumping for joy, but the EP election results are... satisfactory.

Tarand's recently best known for the whole "kommarid ahju" debacle, so he definitely seems in dire need of this on his wall; but he won't do much damage as an independent in Brussels, and as a wake-up call to the major parties to get their fingers out, we could all do much worse.

For what it's worth, I don't buy the 40,000 EEK line; I saw his campaign ad at a movie theater, and that can't be cheap. But if he seems arrogant, it's because he has every right to be.

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Tuesday, June 02, 2009

Still Unconvinced

The conclusion of the Th!nk About It project. Check out the video at the bottom, it's hilarious, a much better execution of stereotypes than that "Union of Subsidized Farmers" crap.

Comments on that page please.

FWIW I'm going to vote for IRL; I'm not a huge fan of anyone, but at least I can respect Tunne Kelam for bothering to hang out at Tartu's main footbridge at 9am on a Thursday, handing out free coffee to passersby. (The coffee is horrible, but I did score a rather cute EPP-ED bottle opener.)

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Thursday, March 12, 2009

Too Many Points

Mart Laar has a certain image, a furrier kind of Kalevipoeg, lying in wait to rescue Estonian politics just when his country needs him most. When he comes out with a policy statement, people tend to pay attention. When he says that he's got a practical solution to counteract the others' impotent squabbles, it merits a closer look.

In today's Riigikogu session, he came out with a ten-point plan to fix the economy and, in particular, the unemployment situation in Estonia. The original text is here (search for Mart Laar to get the relevant paragraphs; I don't think there's an English version anywhere yet). Here's a short summary:

1) Stop stalling and pass the enterprise support bill immediately. This is a program for 5.7 million kroons' worth of credit guarantees (not actual money), to be given out to small, export-oriented businesses. There have been some complaints that it excludes large companies, but overall it seems like a Good Idea(tm). Laar also mentions some sort of "business internationalization project", which includes an idea to create an international financial center in Estonia. Maybe the MPs know what Laar is talking about with that one, I certainly don't.

2) Initiate a program of loan guarantees for heat insulation on apartment buildings. Supposedly this program was initially proposed by Marek Strandberg of the Green Party. It's the rough equivalent of the "weatherization" project in Barak Obama's stimulus bill. Heating costs have been a big cause of worry and discontent among the population this winter, especially in Tallinn (where the utility companies have a monopoly) and especially in Soviet tower blocks. At the same time, insulation is a big, expensive job, and many homeowner associations find it hard to convince low-income and elderly residents that it is worthwhile.

3) Increase investment by allowing banks to decrease capital reserves to 12% of liabilities, if the extra liquidity is disbursed inside the country. Elegant in the sense that it increases the amount of money in the system without printing new kroons, but imposing less regulation on banks is what sir Humphrey Appleby would have called a courageous policy. Then again, if our major banks go under, it'll be Sweden's problem, so that's OK. Laar also suggests working out a way to put 20% of pension fund holdings into the economy, instead of the 1% currently mandated. Which is a good idea, in that most pension funds are buggered anyway, and local entrepreneurs are not likely to be, on average, any worse of an investment than global securities - but Laar better have a plan of action somewhere to achieve this.

4) Ease the payroll pressure on companies. Do not increase unemployment insurance premiums. Lose, or at least delay, unemployment benefits for people leaving their jobs voluntarily. Set a cap on social tax, to attract highly-skilled labour back to Estonia. This is roughly in line with the general policy of attracting investment first. The lack of corporate tax means the state needs to tax payroll fairly heavily, and that's been a complaint from both employers and workers; around 40% of the total cost of hiring someone is tax.

5) Institute an investment attraction package, giving foreign companies incentives to buy land, create infrastructure and train workers. Um, duh; tell us how, in detail.

6) Lose supertax on employee training. This is an odd point in Estonian tax law: since there's a flat income tax, all kinds of employee benefits are automatically treated as an attempt at a tax dodge, so it actually costs the employer more to pay for a company car or a gym membership than increasing the employee's salary by the same amount. Interestingly, employers still do it. But making training cheaper is definitely a good thing for labour efficiency.

7) Cover companies' retraining expenses if they commit to maintaining a workforce; extend the state-guaranteed student loan program to professional training. It was worded awkwardly (what the hell is a koolitusosak?), but I think I'm reading this right. The student loan program is a fixed, low interest; I pay 5% on my college loans, in kroons, which is a hell of a good rate for a short-term loan on a small amount. Student loans are also relatively simple to get, and they're not too big so most people don't have a problem repaying them. So this point sounds about right.

8) Increase the opportunities for microloans to new businesses, and increase the public's awareness of them. Microloans are generally quite clever and useful, but this point needs more details. I'm guessing this would be a job for KredEx, but I suspect a lot of people don't even know KredEx exists.

9) Use EU funds earmarked for retraining to streamline the professional training system; involve the employers; decreace the bureaucracy in state tenders; let the Ministry of Education run training programs, and bring more universities on board. Again, good but vague.

10)Create a program to fight unemployment among the youth. Got a detailed mission statement for the program somewhere? Hell, the last effective program of this kind was the real estate boom; all the unskilled school-leavers went into construction.

Laar's speech leaves an overall impression that he needed to have 10 points for the entire thing to look good. Needz moar specifics. Otherwise though: good ideas. Now go and make it happen.

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Tuesday, March 10, 2009

Hate Session

Postimees writes about a survey in Latvia whose results suggest that most of the country's population believe in creationism.

The survey company, its responders, the author of the Postimees article and the on-call editor who approved the piece for online publication should all go and kill themselves, to spare the human race the effect of their gene pool.

While I'm on a hate spree, I should also mention this person. I've seen the blog linked from somewhere before; you can see that I've commented, but honestly can't be bothered to any more. The author has no idea of Estonia's economic structure, seemed to be completely oblivious to the fact that Estonia has negligible public debt, and does not comprehend the difference between losing money that you had and losing money that you owe. The only reason why I'm even mentioning it is because I am so fucking tired of these goddamn experts, be it bloggers, or analysts from the likes of Danske Bank and Moody's, looking at Estonia and yelling "DOOOOOOOOM!!!" like so much bad fantasy plot exposition.

In a way, the analysts annoy me more. These are the same bastards who gave AAA ratings to junk mortgages that my pension fund then invested in. And now they have the balls to come and tell us that we've fucked up?

Coincidentally, I just got a press release from the Estonian Central Bank mentioning a fresh IMF report. The link is to a brief summary which seems far more credible in its objectivity; the IMF directors are saying that there are significant risks in Estonia, but that the state's fiscal policy has been quite clever and we're right to dedicate our immediate activities to Eurozone accession.

Now, who do you believe more?

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Wednesday, February 25, 2009


An interesting quote at Julien Frist's euroblog (original at EU Observer):

Perhaps the best news is that the outcome of the elections is not known. That is a huge achievement for a post-Soviet state. Pretty much everywhere in the region (with the exception of Ukraine, and to some extent Georgia) election results are known well in advance, and elections do not really matter.

My first reaction is, obviously, "ahem!". The Baltics have their troubles, but we are resolutely democratic; our electorate can be manipulated by populism and appealing to its darker instincts, but the elections really do reflect the will of the people. It is offensive to have Moldova looking down on us in terms of fair representation.

However, I honestly don't think it was malice on the author's part; rather, Estonia and its neighbors are no longer thought of as post-Soviet. Unlike Moldova, which is a semi-artificial nation resulting from the Soviet Union's annexation of a part of Romania and often (if unfairly) mistaken for a shard of Yugoslavia, we have now established an identity that is not dominated by our Soviet past. To the likes of Nicu Popescu - pundits from clear across the continent - we are the plucky little states that are scared of their Russian neighbours, but for some indecipherable reason don't just do the logical bit and become part of Sweden. Also really good with computers. But not really part of the whole mess of former Soviet republics trying to build a working society out of a tribal mentality and the rotting remains of imperial infrastructure.

Which is kind of the effect we've been going for, really.

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Thursday, January 29, 2009

Th!nk Again

Originally uploaded by Flasher T
Brussels itself is boring. Belgium has a fully lit motorway network, so the night-time scenery as you're landing is fantastic, but the city just feels uninspired. The hotel (with traces of grandeur, but a bit of a shithole these days) was in the vicinity of the train station, which is never good, but I stayed in the Termini region in Rome and that was far more interesting. The European Parliament building is, apparently, copyright under Belgian law - one is not allowed to reprint its likeness without paying the architect a licensee fee (and Tony Robinson, the spokesman for the Socialist group, claimed to have paid 400 Euro for the right to post on his blog a picture of the EP compound that he'd taken himself in 1983). I'd say the impression I got from the city was that the Belgians are sufficiently organized and orderly to keep it all running, but don't care enough to make it sparkle.

That sort of criticism cannot be levied on the conference itself, however. As sceptical as I am about the supposed power of the blogosphere - and even more so about the storyworthiness of the European Parliament - the gathered crowd made it an awesome experience. The organizers from the European Journalism Center were genuinely enthusiastic, and did a stupefying amount of work to bring together nearly 90 people from every member state in the EU. I now understand why people go to events such as PAX or SXSW: not necessarily for the cause and impact, but for the sheer buzz of being around so many interesting people. Some of these were bloggers, a lot were journalism students and various other activists who made an effort to get into the competition. It's difficult to describe the joy of being in a room full of individuals, where absolutely every person is guaranteed to be worth your time and attention; the ones I spent a bit more time talking to were downright fascinating.

The project will go public on Sunday, when the Th!nk About It website will begin to publish contributions. In the meantime you can check out the EJC's BloggingPortal, an aggregator of stuff on European politics with a far wider catchment area. Or you can click on the new badge in the sidebar.

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Friday, January 23, 2009

Your man in Brussels

You'll have noticed the slight changes to the template, including the big logo to the right. That's something called "Th!nk About It", a blogging competition centered around the Europarliament elections. I got invited to participate, so they're flying me (and a bunch of other people, I think including Peteris Cedrins from Latvia, but nobody else I've heard of) to Brussels. We'll have a bunch of Eurocrats talk at us, and get a tour of the EP compound.

So, my question: what should I look out for? What should I ask about? What do you, the readers of AnTyx, want to know about the EU government apparatus and particularly the Europarliament, other than the obvious "what's the point of it and why should I care"?

Comments or emails welcome.


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Monday, January 19, 2009

The entertainment has begun.

This year we have two sets of elections: Europarliament, and then municipal. The former are only marginally relevant, the latter far more so.

The Center Party, displaying a fundamental lack of constructive criticism or, indeed, any actual thought at all, launched the first ad campaign, plastering Tallinn with ads saying that the policies of IRL and Reform have led to inflation and increases in the cost of living.

Somebody, and nobody has admitted it yet, put stickers over the KERA posters saying "this shit cost 1.5 million kroons". Which is hilarious.

KERA now claims the actual cost was half that. Missing the point completely.

This election season is going to be fun.

UPDATE: Postimess has called my attention to the fact that Savisaar has replied to an invitation by Mart Laar, leader of IRL and the architect of Estonia's economic system, to an open debate.

Edgar starts out by pointing out the humour of two supposed historians talking about economics. Well damn, Edgar, both of you are former Prime Ministers, and both of you want to run this country - I'd damn well expect both of you to have an understanding of economy!

He then goes on to say that a blog is no place to throw down the gauntlet; that it is a private diary, meant for only a few close friends. Tell me, Edgar you decrepid fart, why is your blog hosted on the Keskerakond website and linked prominently from its home page?

It gets even more interesting: "I understand why Laar wants to debate, but why should I do it? Who is Mart Laar right now? He's not the leader of the coalition, he isn't even a minister in the coalition. Whether I like it or not, my debate partner in this governing union is Ansip, not Laar."

To which the inevitable response is, who the fuck are you, Edgar? You're not even an MP. You're a mayor, and the chairman of a party that has a bunch of parliament seats. We don't have an official opposition in this country; nobody owes you anything. What you are, however, is a politician in an election year; and Laar is another politician, who is fairly prominent and guaranteed to have news coverage. You should be loving the attention of a public debate with the person you've criticized so continuously (your 750,000 EEK poster campaign was targeted at Laar's IRL party as well). Are you really so devoid of any point or platform that you would pass up such an excellent opportunity for publicity?

Do you really have nothing to say, to Laar or to the Estonian voters?

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Tuesday, December 23, 2008

Vladivostok 2008

Providing that you still have a stable income, you've probably seen mostly good things from the global financial crisis. The most obvious benefit is the price of oil, which has lost two thirds of its peak value. It's a good thing for us, but it's been playing havoc in Russia, where the state suddenly no longer has near-unlimited disposable income to pacify discontent. The Russian budget is designed with a market price of $70/barrel in mind; I've seen numbers that suggest a fall to $30 in 2009 would create a budget deficit big enough to swallow up all of Russia's foreign-exchange reserves. Even with oil at $40-45, and a fundamentally uncompetitive industrial base, the Russian economy is screeching to a halt. People are already quite unhappy.

One of the things that the Kremlin has done is try to protect the car industry. The VAZ factory, one of the biggest integrated manufacturing facilities in the world, has only survived on lasting demand in the domestic market because of trade tariffs. Importing a three-year-old family hatchback into Russia will cost several thousand Euro just in excise fees. Anything older than seven years old is prohibitively expensive - and yet a VW Golf that's spent a decade trundling along the autobahns and villages of Westfalia is still immeasurably superior to a factory-fresh Lada.

Still, not everyone in Russia buys Russian cars. A number of assembly plants have opened inside the country, some - like the Ford factory - providing not only jobs but subcontracts to local parts suppliers, others simply attaching bumpers and seats to semi-knocked-down vehicles to satisfy a loophole. But there is another source of cars in Russia: Japanese imports.

Russia's a ridiculously big place, and a lot of it is quite remote, but probably the most isolated city is Vladivostok. Established largely as a base for imperial Russia's Pacific fleet, it is located in the southeastern corner of the country, closer to China, North Korea and Japan than any other significant Russian enclave. After the fall of the Soviet Union and the collapse of infrastructure, Vladivostok turned out to be of little interest to anyone out west. The population, some half a million people, survived through a single revenue stream. Vladivostok became the staging area for used Japanese cars, popular throughout Siberia, but as far as Moscow and St. Petersburg as well. Japanese tax laws mean that keeping cars past a certain age is more expensive than replacing them, so there is a steady stream of perfectly serviceable vehicles that need to be taken off the island. China and Korea have their own auto manufacturing industries, Australia is too far for shipping, but Vladivostok is right there - and a five-year-old Toyota that was a salaryman's pride and joy beats the hell out of a domestic deathtrap, even if the wheel is on the wrong side.

One way or the other, everyone in Vladivostok earns a living from the steady stream of cars being loaded onto freight trains and shipped westwards. So when new tariffs were announced, to be introduced from the beginning of 2009 and shutting down the nearly-new import business almost completely, the city would not have it. When Putin and Medvedev said they'd replace the Russian East's Nipponese fleet with discount Ladas, it was received as an insult.

People took to the streets. As a response, Moscow sent its crack troops: the Ministry of the Interior's own, personal SWAT team. On December 20th, after earlier protests, the people of Vladivostok assembled in a central square, around a Christmas tree, and sang carols. Understanding the rules of the game, they did not bring anti-government banners or bullhorns. As long as the crowd didn't get overtly hostile or political, the local law enforcement would not stop them; everyone in the city was equally worried.

Except the federal government could not tolerate any organization, any large mass of people standing up for their rights. On December 20th, the cops on scene were not locals, but OMON Zubr. This was Moscow SWAT, the same group used to guard international summits and crack the skulls of marching skinheads.

When, shortly after the Bronze Soldier riots in Tallinn, the Kremlin roughly shut down opposition protests in its big cities, it was an ironic contrast to their accusations against Estonia. But I said back then that we should not be complaining too loudly about the treatment of the Marches of the Dissenters, as they were called; most of the people involved were decidedly unpleasant characters, with whom we emphatically did not need to align ourselves. The actions of the federal police at that point showed simply that Russia had no moral right to complain about anyone else; they were no better.

But the protesters in Vladivostok were not neonazis or anarchist radicals, nor even people with a deep-seated hate of the Putin administration. These were apolitical folks, enraged not by propaganda, but by a howlingly terrible decision that would rob them of their livelihood. It wasn't even the result of incompetence or mismanagement, nor the loss of windfall oil profits, that was going to do them in, but a conscious decision by the ruling clique to protect a rotten industry that is spewing inferior product, which nobody in their right mind would buy, given a choice. The people of Vladivostok had every right to take to the streets; and the central government's reaction proved that they aren't just no better than us - they are, self-evidently, far, far worse.

Photo source, video source. Bonus story: the moderator of Russian LiveJournal's biggest car community apparently was contacted by the FSB and asked nicely to delete any posts about the import tariff protests.

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Monday, November 03, 2008

Isamaa Veteran Rescues Nightwatch Martyr

This is how amusing historical footnotes happen.

Comments on BL, please. Would you have done the same?

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Wednesday, October 29, 2008

Early Onset S.A.D.

I don't suppose anyone should be surprised that the Juhi Nagu Ansip thing is a Keskerakond creation, although I am a bit underwhelmed by the text content in the Estonian version. The silly season has started again, a full year before the next relevant election - local councils will get their reshuffle on October 18th next year. Before that we have the EU parliamentary elections in the summer. That's essentially an opportunity for senior political figures to get kicked upstairs. A soft landing for people you really don't want to be messing around with local politics any more.

Ansip's support is down massively. I think the only thing keeping him in power right now is momentum, and the mutual hatred between Savisaar and Laar. Ansip got into the top seat almost by accident, as the minority PM in a mostly KERA cabinet, after Res Publica finally shat itself; he was acceptable because he was irrelevant on the scene up to that time, drawn from the party list after Siim Kallas took his alleged ten-million-dollar ass down to Brussels. No coalition with Savisaar as the Prime Minister would have been tolerated then, and none will be now, but there's no way in almighty fuck that Edgar will be the number two to Mart Laar.

Meanwhile it has been less than two years since the parliamentary elections, and Ansip has squandered away not only his own mandate, but the credibility of the Reform party as well. Part of his support was the anti-Russia vote, but Reform are the blokes we turn to when the economy needs to be sorted. The balanced budget was a landmark, and failing to get one done for 2009 is a failure in what people entrusted the governing party to do. We don't care what sort of creative regulation or back-room wrangling with EU commissioners you need to do: we just want to cast our vote and have you lot sort it. When the real estate market imploded, the initial reaction was they had it coming. Estonians love their Schadenfreude, and seeing developers and speculators lose their shirts made us feel warm and fuzzy inside. Plus there was a chance we'd all afford better homes now. But then the world financial system imploded, and suddenly it's all doom and gloom. Estonia is still in a far better position to survive the crisis than a lot of New Europe (and some of Old, in fact), but Reform was supposed to sprinkle their magic fairy dust and allow this country to fiddle while the rest of the world's economy burned. Without that, it's time to start playing "Pin the tail on the squirrel".

Meanwhile I'm hoping that Edgar will run for MEP, and if he does, I am absolutely not kidding, I will vote for him. The existence of the Centrist party as an object of shared hatred is necessary to the balance of Estonian politics, but those people really need to get rid of Great Uncle and start thinking about a platform. Savisaar has aged badly, and seems to be accelerating in his decline into the sort of dementia last seen in the early-80s parade of short-lived Secretary Generals of the Central Committee of the Communist Party of the Soviet Union. Hardly a day goes by without Edgar or one of his lieutenants doing a Nelson Muntz impression. YOU'RE NOT HELPING! Opposition needs to be constructive, and the only words coming out of Edgar's mouth when inflation spiked were "let's borrow money and spend it, and that will make everything better"; shortly followed by the howlingly moronic plan to institute special grocery shops where people will be able to buy food at a discount, compensated by the municipal budget. Yes, that's right: Edgar's suggestion for people not having enough money to buy food is to take people's money and pay a lot of bureaucrats to hand some of the money back to them. Seriously: go suck on a Werther's Original.

Again, opposition needs to be constructive, not malicious. The electorate already has malice covered.

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Thursday, October 16, 2008


A few thoughts on Giustino's article on spheres of influence.

"How is it that membership in a security alliance founded in 1949 is seen as the only way a state bordering the Russian Federation can survive?"

Because NATO is a codification of the military component of a Western alliance. The world is no longer separated into the spheres of superpowers, but it certainly is separated into spheres of value systems, and for all the differences that Provence might have with Alabama, the democratic West (involving Australia and Japan) would far rather stick together than take their chances with China, Russia or Iran. As the US continues its misguided imperialist adventures, Europe continues its 60-year policy of avoiding war at all costs, bar the surrender of its values (which is why there are German troops in Afghanistan and Swedish troops in Kosovo). Global diplomacy is a dance around the elephant of war, not talking about it outright, but letting the other guys know you're carrying a ten-gauge. In this situation, NATO is not so much an alliance as a statement of intent. NATO membership is an indication that the country has chosen a side, should an all-out conflict erupt. History may not be completely cyclical, but the war in Georgia has proven empirically that Russia is willing and able to attack, with military force, a country within its imagined sphere of influence. That the country in question poses no credible threat to Russia is irrelevant.

"Why should those pesky Estonians continue to poke the Russians in the eye, when they can just be good boys like Pekka up north?"

Because Pekka was in bed with Adolph. Yes, anyone who's studied history understands that it was a forced measure after the West abandoned Finland in the Winter War, and yes, the Finnish section of the siege of Leningrad was the one that let vital supplies through. But the independence of Finland is no proof whatsoever of Russia's ability to play nice with its neighbours. The Soviet Union did invade Finland, and it did win that war, albeit with a massive loss of life and resource! After the peace treaty, the Finns were under no illusion whatsoever that Stalin had a continued intention to fold Finland back into the Russian Empire, and only delayed this project because he had bigger problems to deal with, down south. Which is why they turned for assistance to the only force that seemed capable of stopping Russia - no matter how evil that force was. Just because Finland broke her alliance with the Third Reich at the first sign of Allied competence, early enough to be claimed by the West in return for abandoning most of the Austro-Hungarian empire, does not excuse the exceptional Norsemen's behaviour.

So we can either deny the Finnish model, and throw our lot in with America and Britain, and hope that there will be an Admiral Cowan around for the next blowout; or we can adopt the Finnish model, and open up a class at the Tartu Flight College dedicated to plowing Sukhoi Superjets into the Gazprom tower.

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Wednesday, October 15, 2008

Obligatory US Election Comment

Resulting from a discussion on a forum:

Hmm, this makes an eerie sort of sense: when McCain was stuck in a Vietnamese prison camp, he made a deal with the devil; he would get out, return to the US, become rich, marry a beautiful woman, have a successful career in politics, and eventually become President of the USA. For this, he surrenders his soul.

Now that he is at the end of his life, he suddenly realizes what an enormous mistake he made. Although he cannot give up on the deal directly, he is actually doing everything he can to tank his own campaign, so the Devil's promise remains unfulfilled and McCain's soul is redeemed.


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Friday, June 06, 2008

Bonus Story

Bank of Estonia says price rise largely attributed to high fuel costs.

Country goes "No shit, Sherlock!"

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Estonia's ruling coalition has been creaking along for a while now. Andrus Ansip has been PM for a very long time, but it is starting to look increasingly likely that he, like others, will fall victim to the tradition of Estonian governments never surviving from one election to the next.

Ansip's cult of personality has backfired: as the forceful, single-minded PM he now gets blamed for the country's problems, and both his coalition partners and the opposition are happy to let him burn. An economic crisis ought to be the time to shine for what is known as the party of bankers, but it seems the Reform camp is out of ideas - at least brilliant ones. Ansip's big hope was the new labour legislation, which would do away with many of the protections afforded to workers, and - by design - make Estonia more attractive for foreign investment. That bill went down in flames, because of public outrage, but I don't think it would have been much help anyway: highly skilled labour is in enough demand to largely ignore the legal provisions (I've never, in my life, drawn unemployment benefits, which were one of the main stumbling blocks in the bill), and blue-collar production would be prohibitively expensive in any case, as it would have to compete with Asia.

The opposition is even less helpful. When asked what he would do to relieve the economic crisis, the leader of the Centrist party said he would spend money - use the government's reserve, borrow cash, incur a budget deficit - but doesn't really say anything useful in terms of what he would spend the money on. Reform may not be doing as well as people expect it to, but at least they're scrambling to preserve the balanced budget.

Now the squabbling among the coalition parties is getting more intense. The coalition agreement involved a minor point about winding down the shale mining; it's a useful natural resource for Estonia, but massively bad for the environment. Instead, Reform went and pushed a bill through parliament that allowed one particular company extra mining rights.

The remarkable thing isn't that Reform went back on its campaign promises - because let's face it, politicians - but that it went against its coalition partners. Previously, any bill that the government sent off to the parliament had to be approved unanimously by the entire cabinet. Now Reform went it alone, and specifically against heavy criticism from IRL and the Social Democrats.

The latter did not waste time responding: their intention is to punish Reform by passing a bill that would outlaw sales of alcohol across Estonia from 10 pm to 10 am. This has long been an IRL project, opposed vigorously by the Reform ministers. Now IRL and SDE say they will enlist the help of the Centrists to get the votes they need.

A sign of a possible coalition breakdown and a new IRL-SDE-Centrist bloc? Maybe - except Reform doesn't have the majority in parliament. The mining bill was passed with 54 votes (out of a total of 101 MPs). And thanks to the wonders of E-stonia, we know who did. We have 5 non-voters (two Reform - front-benchers Igor Gräzin and Jürgen Ligi, one Centrist, one IRL and one independent) and one abstained (Centrist).

The breakdown of the yeas:
26 Reform
22 Centrist
6 People's Union (all of them)

And the neas:
15 IRL (all but four, three were not at the hearing, one was there but didn't vote)
8 SDE (all but two, who were not at the hearing)
5 Greens (all but one, who was not at the hearing)

So Reform's coalition mates were against the bill, joined by the unaffiliated Greens (who are not quite so incompetent as to support a mining bill). Reform's support in pushing the bill through? The same Centrists and their lapdog People's Union who are now giddily helping IRL get back at the PM with the alcohol bill.

I despair.

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Thursday, May 22, 2008

Europe's Marshall Plan

Via Postimees comes news of a project devised by Poland and Sweden to create a loose affiliation between the EU and five nearby states: Ukraine, Moldova, Georgia, Armenia and Azerbaijan. The Eastern Partnership would involve visa-free travel, free trade, and the very voluminous umbrella term of "strategic partnerships".

Brilliant. This is the first truly plausible and useful act of EU foreign policy that I've seen. Edward Lucas ought to be extatic: weary of Russian and Iranian sabre-rattling and back-room negotiations over contested membership plans, the EU begins to play sphere-of-influence games unashamedly. The EP has already received support from Britain, Germany and the Netherlands; France is expected to play along in return for approval for its own similar project in the Mediterranean and North Africa. That will also bring support from Spain and Italy.

The beauty of the EP and MU projects is that they return to the core values and competence of the European Union: economical rather than political; practical. They offer the affiliate countries the benefits of the rich, powerful, clever, established force that is Europe, without the restrictions of membership - and often those simply cannot be implemented in adjoining states even with the best of goodwill - and without the finality of taking sides, either against Russia or against the extreme bits of the Middle East. Poland, the dreadnought of New Europe, is expected to take the lead in incorporating the leftover bits of the socialist bloc in Eastern Europe and the North Caucasus, while France has taken it upon itself to spearhead the EU's expansion of influence into near Arab territories, where it has a presence and a history. (While its colonial past might bother some in North Africa, France has been the neutral party in Middle Eastern affairs since the middle of the 20th century.)

The EP/MU initiative allows Europe to pursue its interests on the south-eastern bearing without getting bogged down in the quagmire of politics and offense; it will be playing against the other major entities in the region on its strengths. There is a lot for Eurocrats to get wrong here, but if they succeed, it will assert the EU not only as a common force, but undeniably as a new world superpower.

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Friday, April 18, 2008

Oh Snap

Talking to Justin the other day, we got onto the topic of Andrus Ansip as the longest-serving (continuously) PM in the history of postsoviet Estonia. In fact, only one Estonian leader has ever served longer than him.

The Päts syndrome is a constant issue in Estonian internal politics. Personally I find it reassuring that since '91, Estonia has never had a government make it from one election to another. But Ansip is a prime candidate for a latter-day Päts, as he does have that central quality: an absolute conviction that he is right, and everyone around him is a moron. (If you think I'm overstating the issue, go and watch a Steinbock House press conference, especially one where the reporters ask him about something less than utterly practical.) He also has a core team that seems loyal to him.

What he does lack is vision. Reform is supposed to be the party of economic competence, but Ansip wants more than that - he wants to be a statesman. Unfortunately, that's pure ambition; he doesn't have an overarching idea of what needs changing, like Laar and his mates did back in the early 90s. He wants to be in power for the sake of power.

In this, he is destroying Reform's credibility. In the context of Estonian politics, it seems ludicrous that the bankers' party is firmly in charge of a country, but cannot stop an economic recession. We've missed the Euro accession (nevermind that a lot of people were unconvinced by the idea, it's annoying that we weren't allowed into the Eurozone rather than choosing not to enter), inflation is high, unemployment is growing for the first time in recent memory, and now it turns out that even our balanced budget, one of the cornerstones of Estonia's economic miracle, might not be that balanced after all. This is where Ansip's cult of personality is coming back to bite him, because nobody cares about the coalition - this is Ansip's fault.

The disingenuous bit here is claiming that the Bronze Soldier debacle caused the crisis, by cutting off Russian transit. It certainly contributed, but let's not exercise selective memory: for most of 2006 at least, everybody was saying that 12% annual growth was unsustainable and that the shit was only a few millimeters away from the fan. Russia accounts for 8% of exports and 13% of imports; losing Russia's business hurts, but it's not going to bring the economy crashing down all on its own. (It didn't before, when the double tariffs were introduced, and we're in much better shape now.)

But Russian trade aside, Ansip was still supposed to mitigate the effects of the upcoming crisis. This is what the Reform Party is for. The most public effort so far was the new labour bill, which significantly curtailed employees' rights and benefits in favour of the employers. I can see the idea behind it - make the market more attractive to foreign investment - and at the time I didn't much care, as I've never drawn unemployment or any other welfare benefits from the state, but then I have the advantage of apparently marketable skills. The labour bill was designed to achieve a similar effect as the flat tax system, but whereas Laar's great coup was a feat of engineering - making corporations happy while the people shrugged and were mildly grateful for simpler tax returns - Ansip's plan was going to make life demonstrably more difficult for the actual voters. Since the favourite food of an Estonian is another Estonian, even the other coalition parties took advantage of the public outcry, and delivered the thermonuclear boot to the labour bill.

Now, there are things that Ansip's cabinet gets to be quietly proud of - they seem to have managed to stave off the Eurocrats and keep the zero corporate tax provision alive. But as far as the public is concerned, that is overshadowed by practical embuggerances like the higher fuel excise, which - correct me if I'm wrong - the goverment did not strictly need to implement quite yet. (As far as I understand it, we are obliged by EU policy to eventually both get the fuel excise up to Central European levels, and to bring the tax system in line with the rest of the confederation, but not quite yet.) Ansip is determined to take credit personally for everything happening in Estonia, but the upshot is that he gets blamed personally as well. Reform approval ratings are still decent, though falling, but opinion polls do not actually tell you who people would vote for if the ballots were handed out tomorrow. A lot of people are angry at Ansip, and some of them, like former Prime Minister and transit mogul Tiit Vähi, have stopped being subtle about it:
The most serious problem [in the Estonian economy] is that our Prime Minister is incapable of discussion or listening. As long as that is the case, I do not foresee any positive changes for the Estonian economy. We'd all rather take monuments down and put monuments up, and damn the economy. The politicians' infighting is more important.

New policies come with new people, but right now, nobody wants a change of government. They'd rather let the Reform Party roast for as long as they can.

The solution would be a government of specialists or technocrats, like we had in 1992. [...] Andrus Ansip does not solve problems, he sees myths and thinks that the economic slowdown is the fault of international imperialism and the four seasons.

Of course Vähi's words should be taken with the appropriate amount of salt, and the economy will bounce back up once the current crisis has shaken people up a bit. But I have a sneaking suspicion that when we come out on the other side of this mess, PM Ansip will be conspicuous by his absence.

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Thursday, March 27, 2008

Land Tax Considered Hilarious

Feel like Estonian politics has gotten boring again? That's about to change.

We're almost a year away from the Europarliament elections and a year and a half away from local ones, but it's starting up already.

I said last year that Savisaar was probably damaged beyond repair by his actions in the wake of the April riots; Reform and Isamaa would never let him live it down. It's a bit too early for them to drag out their biggest buckets of filth, but it is becoming increasingly clear that the government will do KERA no favours at all.

Alex has mentioned that property tax in Estonia is essentially zero. It's not really property tax; the property is taxed at the moment of purchase. This is land tax, something that is collected by the local council for administration purposes. (Most of the local council's budget comes from income tax, which is why the council is pretty much the only entity that gives two shits about the population register.) Alex pays 756 kroons a year on his farmland in Põltsamaa. I pay a proportional share of some tiny percentage of the assessed value of the land under my apartment building (the market value of the apartments is irrelevant), and it comes out to 22 kroons per year. Two dollars. I'm sure the postage, bank costs and administration overhead for the council are more than that sum.

There is a certain leeway in the land tax assessment for local councils. Each council can establish the size of the tax, between 0.1% and 2.5% of the assessed value. The rate in Tartu is 1%, and has been such since 2002; there is also compensation for pensioners who own plots up to 1000m2 (which is a decent chunk of land for a private residence).

The rate in Tallinn used to be 0.6%... but as of this year, it has grown to 1.5%. Retirees on a fixed income, who are now faced with a massive tax bill, are naturally livid, and the press is jumping on the story. This is where the Centrists' complete control of the Tallinn municipal government is coming to bite them in the ass, because there is no way for them to shift the blame. If Tartu (historically a Reform stronghold) and other towns can get by without raising land tax, it would be disingenuous for Savisaar to claim rising costs.

Predictably, the coalition parties are not rushing to the Centrists' aid. Harri Paabo, the chairman of the Tartu Homeowners Union, dismisses the issue as one irrelevant in the second largest city, and doesn't bother being too subtle about it: "The land tax is not a heavy burden on Tartu homeowners because we don't have Edgar Savisaar for a mayor."

The national homeowners union and its international counterpart have responded by suggesting a waiver on land tax for homeowners to begin with. The point of land tax is that land is a finite resource, and should not be hogged. If you buy land and don't do anything useful with it - such as farming, construction or other development - it becomes too expensive. Under this logic, there is certainly a valid point to be made that homeowners are not misusing land; they are doing the best thing they can with it, given local zoning regulations and the good of society in general.

A homeowners tax waiver would have to be passed as a national law. The Finance Ministry (controlled by the Social Democrats, who ought to be protecting the interests of the pensioners) is stalling, saying they haven't really considered it - this was never an issue until the 2008 tax notifications started arriving in the last few weeks. The press then turned to the Prime Minister.

Ansip, in his typical style when annoyed by what he feels is a stupid question, was unsubtle to the point of being politically incorrect: It's your own fault, dumbass. The population of Tallinn elected Edgar Savisaar's party to the municipal government, and now it is reaping the benefits. Sure, the government could interfere and block the massive tax hike, but this is going to reflect poorly on Savisaar alone, and there's no way in Hell that the Reform or IRL are going near this mess. Even the prospect of getting to say "we made sure the land tax wouldn't rise" come election time is not appealing enough. No, the coalition wants people to get hit where it hurts - in the wallet - and to hate Savisaar for it.

From the safety of Tartu, this is going to be entertaining.

Bonus story: the domain names and have apparently been squatted by one Virgo Kruve, a Centrist party member who publishes the Pärnu municipal newsletter (Pärnu's mayor is KERA), the town's KERA propaganda sheet, and also owns the, .net, .org and .info domains (all of those lead to the party's official website). The Isamaa domains however are more naughty: one was redirecting to an anal porn website (and not the relatively innocuous landing page either, but to a full compliment of genitalia) and the other was a mock advertisement for a Tallinn brothel that got shut down a couple of years ago - though not before Isamaa's Jüri Mõis got caught there and had to resign from the position of Tallinn mayor.

When quizzed by Eesti Ekspress, Virgo Kruve commented that the redirects were social commentary on the state of Estonia under Isamaa leadership.

Like I say, entertaining.

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Tuesday, March 11, 2008

Rules & Opportunities

There's an old and not particularly funny joke, about a wealthy man that comes to a high-end travel agency and asks for something special. The salesmen show him all their prospectuses, but he's already done everything they can offer. So the salesmen get on the Internet, call all their colleagues and people they met at trade shows, call in all sorts of favours to find the most exotic, unconventional, remarkable destinations and activities imaginable. The wealthy man still complains that he's done it all before. Finally, exasperated, they give him a globe and tell him to point to any place on it, and they'll arrange a trip for him to that exact spot, and find something interesting to do.

The man studies the globe for ten careful minutes, then looks up and says, "I'm terribly sorry, I really am - but would you happen to have a different globe?"

I am reminded of this joke every time I hear someone say that they are not going to bother voting in elections.

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Friday, February 22, 2008


Obvious parallels...

Russian and Serbian are related, but all I can make out there is an ironic "Hero of the demonstrations".

Link via Estland.

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Foot, meet mouth.

EDIT: This now available at Baltlantis.

I have spoken before about the need to apply Occam's Razor to Russia - more specifically, the Heinlein conjecture, which states that one should never attribute anything to malice that can be adequately explained by stupidity. I never cease to be amazed by the ability of Russian institutions of greater or lesser officialdom to embarass themselves in spectacular ways. Really, it's a government full of Boris Johnsons.

I've stayed away from the whole Kosovo issue, because I don't have enough information to make a good judgement on it; I have the impression that the process happening now is more Kosovo's separation from Serbia rather than actual independence - since it'll be run by the EU (and even its flag is a version of the European one). But Serbia is pissed off.

Russia's reaction is mixed. On the one hand, it has been trying to use Serbia as a client state for ages - during the NATO bombings, I've heard rhetoric that Serbia is the only major nation in Europe that is both Slavic and Orthodox; Greece being the latter but not the former, and Poland the former but not the latter. So if Serbia is indignant, Russia is too. Especially since Kosovo is now the dominion of the West, so they get to trot out the old lines about imperialist pigs again.

On the other hand, they are gleefully pointing to Kosovo as a precedent, and demanding international recognition for Abkhasia, South Ossetia and Transdniestr. I've even heard a few local voices piping up again with the idea of an Independent Republic of Ida-Virumaa, which incidentally I would just love to see them try. So Russia finds itself in propaganda heaven, a win-win situation.

And then Russia's state-owned television channel puts out a news show where the anchor spews out the following:
Today the people of Belgrade surely remember other public gatherings. They remember the madness of the crowd that brought down old man Milosevic. The same football fans, by the way. How a country giddy with liberal promises cried at the funeral of the Western puppet Zoran Djindjic - the man who destroyed the legendary Serbian army and secret services, who sold the heroes of Serbian resistance out to The Hague for abstract economic assistance, and who got a well-deserved bullet for it.
Youtube link if you understand Russian. Zoran Djindjic was the first democratically elected Prime Minister of Serbia after the end of Milosevic's regime, murdered in 2003.

Holy. Fucking. Shit. This is Russian state TV. Not just a media puppet - this is the official channel of the Kremlin.

The show in question went out at midnight Thursday/Friday. Naturally, the Serbian government is livid. The NewsRu article linked above has a quote from the former Balkan bureau chief of the Russian state newswire, Sergei Gryzunov, saying that this quote is a call for the murder the current Serbian president, Boris Tadic (who was a close supporter of Djindjic's).

So the main question now is, was this an authorized statement, or was the anchor overexcited and taking advantage of the poorly-censored midnight time slot? If it's the latter, we should see news of his dismissal shortly. I lean towards this explanation, because of the reason stated above, but then haven't we seen similar sort of preposterous spew out of the Russian state media directed towards Estonia or Georgia? The only difference now is that Serbia is, ostensibly, on Russia's side.

These people are hilarious, but occasionally their delusion can be scary.

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Wednesday, January 09, 2008

Obligatory US Elections Post, Vol. I

No further comment. :)

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Friday, November 09, 2007

Georgia WTF

The pictures of riots in Georgia, being supressed by the police, cannot help but bring up comparisons with the Bronze Night in Tallinn. While our own April riots had a sequence of events building up to them, events that most TV viewers were not aware of, there was at least one cause that the anchors could mention: the unrest followed the relocation of a Soviet-era war memorial.

The Tbilisi riots are far more enigmatic. The official news sources could not quote anything except the opposition's general dissatisfaction with president Saakashvili and his political party. While my esteemed colleague has forfeited attempts to figure out what the hell is going on there, I have the advantage of speaking Russian. As usual with such things, LiveJournal is a good source of perspectives and links to relevant articles. Here's what I've got so far.

Mikhail Saakashvili was elected as president in January of 2004, following the Rose Revolution. Following a long reign of ex-Soviet bigwig Eduard Shevarnadze, he was a welcome Western-minded alternative. He had the support of the people, and some very important allies - the US took a particular interest in Georgia, since its location makes it a useful platform to project power into the Middle East and Central Asia.

The presidential elections were followed by parliamentary elections, which Saakashvili's coalition promptly won. Georgian law states that the President is elected for five years, and the Parliament for four. So Saakashvili's first term would've run out in the winter of 2009, and the cabinet's in the spring of 2008, in other words Any Day Now.

At the end of last year, the parliament passed a constitutional amendment rescheduling the elections. The government was reluctant to hold a campaign at the same time as Russia, which is having an election season extending into next spring as well. It was thought - not unreasonably - that Georgia would be used as a propaganda cause, and it would be a great temptation for the Kremlin to try and destabilize the small country, like it's done before by supporting the separatists in the provinces of South Ossetia and Abkhazia, which are still under the control of Russian peacekeepers. So the amendments, which were found to be legitimate, but iffy by the Council of Europe's constitutional monitoring authority, extended the term of the Parliament by six months. This would allow the elections to be held long after Russia had made its decisions, for better or for worse. Saakashvili bought this extra time by voluntarily giving up three months of his own term, thus having the Georgian parliamentary and presidential elections at the same time.

This is what pissed off the opposition. As it stands, Georgia's political system is fairly heavily tilted in favour of the President, and the rescheduling is also an obvious attempt to use Saakashvili's personal popularity to strengthen the position of his supporting coalition*. With a popular incumbent president currently supported by a loyal parliamentary majority, the opposition is completely out of the loop. It doesn't help that the opposition leaders appear to include the sons of Georgia's first democratically elected president, Zviad Gamsakhurdia*.

But the opposition alone couldn't make the riots happen. Why are the common people on the streets? Different sources put the number of protesters as high as 150,000 people, and in a country about twice the size of Estonia with almost three times the population, that's still a huge number. (To compare: the marauding crowds in Tallinn on the Bronze Night are estimated at being up to 3,000 strong, by the wildest counts.) What's got them all so riled up?

Georgia was one of the first Soviet republics to make a serious attempt at independence, and the only one except for the Baltics that is not a member of the Commonwealth of Independent States (a mostly pointless virtual union established after the fall of the USSR to alleviate exposure shock in countries with little experience in self-rule). At the same time, its history has been infinitely more tragic. The early 90s were marred by extensive Balkans-style bloodshed in South Ossetia and Abkhazia, and the corrupt government of Shevarnadze impeded the country's economic growth. Saakashvili was supposed to change all that. But Georgians are, for most intents and purposes, Mediterraneans. The country has a long history stretching back to the pre-Roman times - it's known to have been a trading partner of Ancient Greece, and it can be argued that it is part of the same civilization. As Mediterraneans often are, the Georgians are impulsive and impatient. In two and a half years of effective rule, Saakashvili has failed to produce an improvement in living standards as drastic as was expected of him. For all its new foreign markets - you can now buy genuine Georgian wines in Tartu, and they're quite good - the country remains relatively poor. When the people are disgruntled, they blame the leader.

So, this week the protesters took to the streets, and the situation rapidly dissolved into a riot. Police used water cannons and tear gas; in an unfortunate coincidence, the worst of the clashes took place in the same boulevard where the Soviet authorities once harshly suppressed a demonstration of Georgian independence activists, and people can't help but make the painful connection. The president declared a state of emergency, which included an information blockade: foreign TV channels were shut off, the local press was confined to quarters. That is finished now, and it seems that it might have had a point: given a bit of time to catch their breath without having to worry about the media, the government and opposition leaders were able to meet and agree on terms.

Stunned by the riots, Saakashvili has gathered up his bravery and gone all-in. He has proposed a shotgun election in January of 2008, less than two months away. Ideologically, the opposition has lost its footing: they cannot accuse Saakashvili of being a corrupt, power-hungry politician if he is volunteering to cut his own term by a full year to give the people a chance to express their distrust of their leader. At the same time, the president is effectively counteracting claims that the police suppression of the riots signalled an end of democracy in Georgia - in the wake of the crisis, he's doing the most democratic, absolutely textbook thing possible, by effectively resigning. Such a short campaign also leaves the Kremlin with precious little time to influence the elections, especially as the opposition has definitively proven its incompetence by failing to turn a 150,000-strong crowd into any sort of real political advantage.

At the end of the day, despite the sheer amount of balls it took Saakashvili to call an early election, it seems to be a safe move: for all the popular disillusionment with the supposed wonder boy, there does not seem to be any other Georgian politician with a viable chance to get the popular vote. Saakashvili will most likely be re-elected, in a free and democratic poll monitored by European observers and the US advisors already in the country, and the opposition will be silenced.

Most of this analysis is based on the conversations in Georgians' LiveJournals, as well as Russian news sources, including anti-Kremlin ones. I've tried to arrange the information and pick out the scenarios that seemed most plausible to me. We'll see what happens.

Now for the Western perspective. The US seems very interested in having Georgia as a satellite nation; it is at once fervently anti-Islam, having a very strong Orthodox tradition (in fact along with Armenia it is one of the oldest consistently Christian countries in existence), but it is also fervently anti-Russia. For the US's interests in the region, Georgia shows a potential of loyalty second only to Israel. America might be a bit busy with other things in the Middle East/Central Asia region right now, but Georgia would definitely be a very good ally to have. Which is why the Georgian army is re-tooling with US equipment and training with US military instructors, and the government lends an ear to US advisors. There is even persistent talk of Georgia getting NATO membership. If Estonia could join NATO without a border treaty with Russia, Georgia can join NATO without resolving the issue of its breakaway provinces - as long as the US wants it bad enough.

For the EU, Georgia is a sweet piece of property as well, and you only need to look at the map to see why. With the last round of expansion, Europe has the use of Bulgarian and Romanian ports on the western shore of the Black Sea; with Georgian ports on the eastern shore, the EU is only one short skip away from having access to the Kaspian oil reserves - completely bypassing Russia. Hell, if they can extend the pipework to Turkmenistan, it would render Nord Stream redundant!

At the same time, Georgia is a far easier mark than Turkey. The EU is more or less done in the north and its own immediate vicinity; like all the major powers today, it is most interested in Central Asia. If it has a serious interest in access to the Caspian - and it damn well has to - it will have a far easier time integrating little old Georgia, than the enormous, barely secular mess that is the former Ottoman Empire. If the Georgian people's main complaint with the Western-minded Saakashvili is that he's not making the economy grow quickly enough, well, that's easy. The EU has more than enough experience in pulling up destitute post-Soviet economies by the ears. Hell, let's not forget that Mart Laar held an official rank as Saakashvili's advisor!

Estonia could really use a new project, something to make us feel good about ourselves, make us feel relevant as a part of a single Europe, and also make us be seen as relevant, as a useful European force. For about a microsecond there, Estonia had an internal meme of becoming a world expert on Russia, the West's go-to guys on how to deal with our eastern neighbours. That didn't turn out well, but we can still become the world authority on rehabilitating downtrodden small countries, like we've done with ourselves. Estonia is in a good position for taking the lead on a project that has the attention and backing of the entire EU, proving our expertise and establishing ourselves as something more than just the homeland of Skype and cheap beer.

Georgia has a long way to go, but it's still on the right track. Let's see what happens.

*There's a parallel to be drawn here with Putin and United Russia, or indeed Andrus Ansip and the Reform party. The key difference in the former case is that Putin is directly leading the candidate list for UR - in fact he is the party's only name in a traditionally three-strong federal component, the three candidates that the entire enormous country gets to elect, supplementing the individual lists in each constituency. Saakashvili is not being quite as obvious about it, it's more in the style of George Bush's personal popularity in 2004 helping out the Republicans in the simultaneous Senate/Congress elections. The difference in the latter case is that Ansip is a creature of the party; for all his personal vote record, he ran in a safe constituency, and people who agree with the platform tend to just vote for the top name in the Reform party list. Ansip may have personal ambitions, but he doesn't have the credentials or charisma to drag a party into parliament in the same way that Mart Laar or Marek Strandberg can.

*The opposition leaders seem to include Tzotneh and Konstantine Gamsakhurdia, who seem to be brothers; there have been leaks of their phone conversations with Russian foreign intelligence officers. Zviad Gamsakhurdia's biographies mention that he had three sons, but I haven't found one that lists their names. Correct me if I'm wrong.

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