Anniversary of Anguish over Bronze Battle

This weekend past saw the first anniversary of the Estonian Bronze Soldier crisis - over the removal of a soviet WW II monument from central Tallinn. As the crisis evolved it ignited a bilateral quarrel between Tallinn and Moscow, in the end setting Russia and the European Union at loggerheads. As the first anniversary of the Bronze battle drew close, a certain extent of anguish and apprehension arose among Estonian authorities. What was to happen this time over? The simple answer was - next to nothing.

On Saturday, some 100 demonstrators gathered in a park in central Tallinn to commemorate last year's events, and to call for the resignation of the Estonian government led by Andrus Ansip. The event was peaceful and heavily monitored by police and the Estonian secret service (KAPO).

That the demonstration actually rallied less of a crowd than the number of people merely injured last year must be considered a fundamental failure for Russian "minority" interests in Estonia. Not least so as, just a few weeks ago, an organization to unite Russians in Estonia held its first congress. That Saturday's demonstration had such a poor showing may thus point to a waning significance of the Russian issue in Estonia. Or should perhaps alternative explanations be sought?

What evolved over a few weeks last spring was that the same methods used during the coloured revolutions in Serbia, Georgia, and the Ukraine, were now applied by Russians themselves. As the protest was reaching its crescendo, actions and debate were coordinated by sms, e-mail, and blogs targeting largely unprepared Estonian political leaders and authorities. The subsequent cyber attacks on Estonian web-servers proved the peak in efforts to paralyze society. Someone had obviously done his homework.

In terms of the Russian-speaking population of the Baltic States, Russia has long propagated that these "minorities" are consistently discriminated against, and has even ventured so far as to compare the situation with Apartheid. Last year's events also gave Moscow an opportunity to highlight the issue on the international scene. Although much of recent bravado has mysteriously evaporated, Russia has e.g. demanded an addendum on the Russian minorities in Estonia and Latvia in ongoing negotiations on a new Partnership and Cooperation Agreement with the European Union.

Still, much indicates that Moscow came out of the 2007 conflict with the EU on the wrong end of the stick - besides the PR-fiasco for Moscow's international image - why such demands are most likely to be ignored. Also, Russian policy towards the Baltic States since 1991 has largely proven a failure. Already in 1997, Russia's Council for Foreign and Defence Policy - an influential think-tank - in a report characterised Moscow's policy as counterproductive, if it intended to safeguard the interests of Russian "minorities".

It is far too seldom argued that what is not said and done may be as interesting as what actually is. So may be the case also here, although reporting on something that did not happen - as the Bronze battle anniversary - would hardly qualify as breaking news or of interest to a larger audience.

Turning to the case in point, the Bronze Soldier crisis has fundamentally been interpreted as an ethnic conflict. In fact, few issues are as politically sensitive as ethnic tension. Recent history has witnessed oppression and even genocide on minorities to an extent that has shocked world opinion. However, this also has made us prone to see far too many societal conflicts with ethnic lenses.

So, why did the anniversary of the Bronze Soldier crisis pass by next to unnoticed? May it be that there are alternative or complementary explanations to last year's turmoil than the ethnic angle? Before trying some hypotheses, it should be clearly stated that the removal of the Bronze Soldier from central Tallinn unequivocally was the igniting factor of the 2007 crisis. It is quite obvious that the Estonian government acted in haste and with poor judgement. Thus, they partly brought the crisis upon themselves.

Still, that does not explain the absence of protests a year after the so far largest protests by ehtnic Russians in post-soviet Estonia. The situation has not altered and the reasons for, arguably, Russian discontent with conditions in the country has not changed for the better - rather the opposite as a fact. Political forces traditionally safeguarding interests of Russians have partly been rendered obsolete. In socioeconomic terms, nothing has really happened, as illustrated in a report by Marju Lauristin last autumn.

So, except for Estonia's monumental mistake and obvious Russia-related explanations of lacking protests this year - the upcoming presidential installation on 7 May and last year's domestic need in Russia to rally around a cause - what might serve as alternative or complementary hypotheses for the difference between last year and now?

One reason largely unexplored is the transit of Russian goods and products through Estonia. Russia has long wanted to divert this trade to Russian harbours instead of having to pay the costs of transit. Furthermore, Kremlin-sponsored Russian companies had long been eager to out-compete those companies that controlled and profited from the Estonian transit trade. The same applied for control over export-harbours in Estonia. For most observers, it serves as no surprise to state that the transit trade involves enormous sums of money. One can only imagine how much by pointing to the fact that Estonia lost some 6,3 billion Estonian Kroonas in transit revenues due to a few weeks of Russian blockade.

Consequently, just a week or so before the April 2007 events, Russian vice Premier, Sergei Ivanov, held a speech in Murmansk, in which he propagated curbing transit trade and diverting Russian exports to ports in the Petersburg region and Gulf of Finland.

Negotiations for transit quotas and pricing on Russian goods by Estonian railway were to be held in May 2007. In 2006, the Estonian state re-nationalized Estonian Railway (Eesti Raudtee), why preconditions for influencing the outcome of negotiations had been altered to the detriment of Moscow's interests.

As for harbour facilities, the ports of Tallinn and Muuga represented around one-quarter of Russia's total refined-product exports, thus by far outweighing any Russian harbour. Control over harbours in Tallinn, Muuga and Sillamäe had long been coveted by Russian business interests. As previously reported, last year's crisis also saw a transfer of trade between these ports to the benefit of Russian interests.

Then, there is also the question of shipping. The crisis and the subsequent Russian trade blockade is said to have favoured shipping operations, controlled by Swiss-based Gunvor Group. Gunvor is owned by Swedish oil trader Torbjörn Törnqvist, with interests in e.g. Surgutneftegaz. In November last year, Russian political scientist Stanislav Belkovsky made allegations in the German newspaper die Welt that Putin had amassed a personal fortune of some 40 billion USD, and that part of this was held by a 50% share of the Gunvor Group.

Although these rumours and allegations cannot be corroborated, and in fact have been denied by most concerned parties - among others Törnqvist himself - one cannot but stop to wonder what role business with a Russian stake had in the 2007 Russian-Estonian crisis. The example of controlling the transportation system - railways, harbours, and shipping - of Russian exports by way of Estonian transit might thus arguably be one alternative or complementary explanation to why last year's Russian-Estonian crisis was allowed to escalate to the level it did.

Russia's imposition of a trade blockade on Estonia for a few weeks last year was a hard hit on the transit trade. The transport of Russian goods by rail, road, and boat was halted. The companies involved in this line of trade, were among the all too evident losers, and many of them were more or less put out of business - both Russian companies and Estonian with often large Russian ownership interests. These companies were not sponsored by the Kremlin. Instead, it appears that the blockade wiped out annoying competition, and that mightier Russian business interests moved in to take over the transit trade, once the blockade was lifted. Such methods would not be a novelty in Russian business practices and thus serve to surprise nobody. Big business in Russia regularly gets Kremlin's blessing to move in and wipe out competition in order to monopolise a market. The difference in what would arguably be the Estonian case, is that these practices were now applied on another state not in the CIS, but on a member of the European Union.

So, apart from speculations and conspiracy-theories that normally surround events such as the Bronze Soldier crisis, it would seem worthwhile to test such alternative or complementary hypotheses as accounted for above. Who stood to gain from a blockade halting transit trade, and who has actually done so? However, if proven right, such an argument would not only expose that the Kremlin serves its own interests, but also a blatant disregard by Russia for the interests of the Russian "minorities" in the Baltic States, because the greatest losers of the conflict would turn out to be the very same Russian minorities that Moscow claims to defend.

Consequently, it may actually have been the Russians in Estonia who lost most out of the Russian-Estonian conflict over the removal of the Bronze Soldier. Russians were hit by losing the revenues from transit trade, both in terms of profits and employment. Furhtermore, Russians were the ones who were most exposed by raising the issue of disloyalty to Estonian society as a whole. For any minority in any country, such cross-pressure may prove highly detrimental to their future prospects of finding a place in society in social, economic and political terms, and still Moscow decided it was worth to run this risk.

Perhaps, in the end it is safest not to test such hypotheses as forwarded above, because - if validated - they would bring the perceived cynicism of Russian leaders to new and even higher levels. Moscow's indignation and heavy hand towards Estonia was officially motivated by the public outcry among Russians over the removal of the Bronze soldier. General opinion held that Moscow now finally had to step in to protect the Russian "minority" in Estonia. In stark contrast to this official policy, a proven transit trade hypothesis would - to the opposite - paint a picture of Russians abandoned by Russia and their cause sacrificed for the sake of petty business interests. One cannot help but wonder what the Russians who took to the streets in both Tallinn and Moscow in protest against "fascist Estonia" would think if confronted by proof to that effect. In the meantime, such hypotheses are, of course, just a fidget of one's imagination - or are they?

Estonia-Russia: Maskirovka Demasked?

Strange rumours come out of Moscow these days. Indeed, would one believe in all gossip on the current power struggle in Russia, the world as we know it would be transformed. It is obvious that competing politico-financial interests are producing an increasingly incoherent and incomprehensive political landscape for the upcoming 2007-2008 elections. This is especially true when it comes to effects on foreign policy.

A recent rumour coming out of Moscow relates to the crisis between Russia and Estonia over the removal of the Bronze Soldier from central Tallinn. According to unofficial sources, some forces in Moscow were preparing a political initiative towards Estonia prior to the crisis to permanently defuse the explosive issue of this old soviet war monument. Thus, Moscow would actually have been preparing to offer Tallinn participation in moving the Bronze Soldier on the 9 May Soviet Victory day, provided that Russia would be allowed to play an active role in such a ceremony. Some people even claim that the Russian Ministry of Defence had ordered an honorary military guard company to train for such an event.

What an Estonian source claims happened - based on the same rumours - is that the Estonian government got wind of the Russian plans, and that Premier Andrus Ansip therefore opted for a quick removal of the Bronze Soldier. Ansip would thus have won over Estonian president Toomas Hendrik Ilves, who had previously opposed removing the monument. As the argument allegedly ran, letting Russian troops once more march on Estonian soil, especially in connection with a Victory Day ceremony, would simply have been unacceptable to Estonian national sentiments. Still, actively refusing a Russian offer to - once and for all - defuse the Bronze Soldier issue between the two countries, might have proven even more difficult for Estonia in the European and international contexts. Tallinn might then have earnt a reputation as an unconciliatory state on the margin of Europe. Accordingly, these rumours hold that the Estonian government decided to remove the Bronze Soldier in good time before 9 May, in order to preempt a potential Russian initiative, as described above.

Well, rumours are not always to be believed, and this time they seem too fantastic to even consider being true. Still, the example serves to illustrate how hard it is to deliberate on current Russian policies to draw any credible conclusions. Also, the same or similar rumours are echoed both in Russia and abroad. Perhaps, the recipe should be to follow the example of the French satirical magazine Le Canard Enchainé, and start any discussion on current Russian politics with "Le Canard Enchainé ne dit pas, que..." - The Fettered Duck does not say that..." - thus safeguarding against being fooled by mere rumours. Then, at least one would be on the safe side in not believing all that comes out of Moscow these days, and at the same time not completely writing everything off as desinformation. The world is surely becoming an increasingly strange place, and hopefully rumours like these might amuse someone.

Note: The term "maskirovka" refers to the art of deception in soviet intelligence and military operations.

Was M/S Estonia sunk by an explosion?

A new Swedish-German expert group on the 1994 M/S Estonia catastrophe does not exclude an explosion as cause of the shipwreck. Such a conclusion has so far been ruled out by all other investigations, but few explanations have been given for the fast course of events when the ship went down.

On the evening of 27 September 1994, the Estline ferry M/S Estonia left Tallinn heading for Stockholm, with 989 people on board. Around midnight, the ship came into difficulties and at 00:23 hours sent out a distress call to ships in the vicinity. Exactly what happened after M/S Estonia's mayday is still in dispute, but the ship went down within the ensuing 20 minutes, taking with it 852 lives. It was by far the biggest ferry catastrophe ever in the Baltic Sea during peacetime.

The catastrophe occurred little over a month after the last Russian troops had left Estonian soil. It thus came at an inconvenient moment for Estonia, as the country had just regained full sovereignty over its territory. Consequently, the stage was set for widespread speculations and conspiracy theories. Despite the fact that numerous investigations, reports, and commissions of inquiry have concluded that there was no foul play, such theories still linger on. One of the most widespread speculations is that the Russian secret services would have placed a bomb on board, due to alleged smuggling of Russian military equipment by the Swedish military intelligence service. The Swedish military service has later admitted that it transported such equipment on M/S Estonia, but claims that so was not the case at this specific time.

Then, why did M/S Estonia sink? Most analysts agree that the main cause of the catastrophe was that the bow visor of Estonia was torn off by hard waves, causing also the front ramp of the ship to come loose. The immediate effect was that the sea flowed directly onto the car deck of the ferry, causing it to capsize within the course of less than half an hour.

What the new expert group, commissioned by the Swedish government, will do is to review various alternatives to explain why water penetrated the ship so quickly. The assumption remains that the main reason was the loss of the bow visor, but researchers will also scrutinise complementary explanations. One is that a hole would have been ripped open in the hull of the ship due to an explosion, which several survivors claim to have heard. However, no hole has so far been found to account for such a theory. Additional theories is that ventilation shafts would have facilitated the flow of water through the ship, and another that it came in by crushed windows. All in all, the research group will analyse eight additional or complementary scenarios causing the catastrophe.

So, should this news lead us to assume that there was foul play in the Estonia catastrophe? Most probably not. The only thing this research group will do, is really to go over all evidence again without prejudice and thereby include any possible hypothesis. It is not very likely that they will reach any other conclusion than has previously been made. Still, the Estonia catastrophe remains a national trauma in both Estonia and Sweden, so it is understandable that no stone will be left unturned in trying to wholly explain the shipwreck. An Estonian report was issued only in March this year, and the new Swedish-German expert group will probably not be the last to look into the matter.

What is perhaps the most tragic thing about continuously new reports about the Estonia catastrophe is that the families and relatives of the victims are never really allowed to put the issue at rest. After nearly 13 years, rumours are still at sway about what really happened, regardless of all inquiries and reports. Given the evidence produced so far, it is highly unlikely that M/S Estonia was sunk by an explosion. Still, also among the families there are many that will never learn to accept what happened and are trying to find explanations that simply might not exist. Paradoxically, not being able to put a thing like Estonia behind oneself is part and parcel of the tragedy itself, so the future will probably hold a stream of reports gradually turning into a trickle, as the people affected by Estonia gradually pass away. For today and the future, this is the greatest tragedy.

Russia: Motives & Misperceptions

As relations between Russia and the West deteriorate, a growing tendency to misperceive Russian motives is discerned. Russia is not a monolithic power, but analysts increasingly tend to give prominence to factors that themselves cannot wholly explain Moscow's actions. A recent example is the Russian-Estonian crisis.

The current crisis between Moscow and Tallinn has its specific origins, and should come as no surprise to most observers. The basic preconditions for crisis were set already in the early 1990s, and both parties are since stuck in a mutually detrimental relationship. The difference this time though is that there currently are no countervailing forces in Moscow to keep the conflict in check, as has previously been the case. This is matched by poor judgement on the Estonian side. Also, the conclusion by western analysts that Russia is using its energy weapon against Estonia by imposing an export blockade seems flawed and an example of mental bandwagoning among people prone to single factor explanations.

Public opinion in Russia about the Baltic states was forged from the disappointment of their determination to abandon the ailing Soviet empire. The Balts were considered part of the liberal and reform oriented forces in soviet society, why Russians felt betrayed by the Balts as Moscow perceivably strived towards the same political goals as the Balts were identified with. The realisation that the Baltics now were abroad took a long time for most Russians to come to terms with. That Russians had become subjects of a non-Slavic state in which they had to seek citizenship to enjoy the full rights of society was incomprehensible. That states like Kazakhstan might treat Russians badly was only to be expected, as they did not share the liberal heritage Russians associated with the Balts. A measure of double standards was thus introduced in comparing the situation of Russians in former soviet republics. As for the Baltics, Russians felt scorned in their identity as imperial civilisation carriers. An inferiority complex was thus the nucleus of the dispute over the situation of Russian "minorities" in the Baltic states.

As things have evolved in Russian-Estonian relations over the last month, the image conjured up by Russian media is that of Russians being wronged and bereft of their rights and heritage. The difference this time is that there are no countervailing forces in Moscow to keep too overt nationalist sentiments in check. Still, most analysts limit themselves to describe the conflict in either bilateral or Estonian terms, whereas Russian domestic factors are left out. This limits reporting to developments of the same Russian-Estonian themes covered over the last 15 years, and old articles might be taken out of the drawer to be rewritten or updated, simply filling in the new facts. In essence, however, they lack the proper contextualisation to explain why the conflict has taken a new turn for the worse. Action is not enough - as the removal of the Bronze Soldier and its consequences. Context must be added to analysis in order for us to understand the full extent of the problem.

Next year, Russia faces presidential elections. By all appearances it seems to be a runoff between Sergei Ivanov and Dmitri Medvedev. The power struggle in the Kremlin is however already underway, and who eventually will get the upper hand sways back and forth between the two main contenders. Half a year ago, Medvedev was in the lead, but now Ivanov has made a comeback and seems to be in the best position to become master of the Kremlin in 2008. In this context, Ivanov has used the Estonian crisis to gather his forces in front of a common foe. Opinions on Estonia are by now so deeply set that they may be used as a vehicle to gather the Russian masses. Previously, Russian leaders have known where to draw the line in using the "Baltic question" but now president Putin cannot put the foot down as too great interests are at stake, in who will rule Russian politics in coming years, to risk anything just to preserve a working relationship with Tallinn. As for relations with the European Union and Nato, Putin walks a thin line in risking a multilateralisation of the Estonian issue.

However, Medvedev is also not left out in gaining the dividends of the Estonian crisis. Last week, Sergei Ivanov, during a meeting with governors in Murmansk, declared that the Russian oil and coal previously exported by transit through Estonia will now instead go through the port of St. Petersburg. Russia annually ships around 25 million tonnes of fuel oil, gas oil and petrol through Estonian ports. Imposing a Russian energy blockade on Estonia is regarded by many analysts as a way for Moscow to use its energy weapon. Such a conclusion, however, seems flawed as Estonia is relatively spared of any major consequences for its energy supply. Instead, it may prove a way for major Russian oil exporters - mainly Rosneft - to curve export competition by other Russian oil companies.

Transferring exports to St. Petersburg will indirectly give Rosneft greater control over who will be able to export Russian oil. St. Petersburg port is already today gravely undersized - not to mention corrupt - and much effort has been made in recent years to construct new harbours in the Gulf of Finland - Primorsk for oil and Ust Luga for bulk. Opting for Petersburg therefore means that companies that previously have exported by way of Estonia now are at the mercy of Rosneft to meet their deliveries to western customers. In essence, the energy blockade against Estonia gives Medvedev's interests a way to hit at remaining independent competitors within the oil industry. Consequently, Ivanov reaps the political and Medvedev the economic rewards of the Estonian crisis.

So, should all explanations based on the actual situation in Estonia and relations with Russia be discarded? Of course not. However, it is equally important to analyse the conflict on its own merits as it is to contextualise it, striking a balance on the domestic-foreign frontier. An obvious example is the risk that the conflict may spread also to Latvia. Most observers would say that situations differ too much for something similar to happen in Riga, but still Latvian authorities are apprehensive. From both a political and economic perspective, Ivanov and Medvedev may gain from sparking a crisis also with Latvia for the very same reasons why they have let the crisis with Estonia get so much out of hand. There simply is too much to gain and too little to lose domestically at the moment, that a Russian-Latvian crisis should not be ruled out just because situations in Estonia and Latvia are not similar enough. Giving the crisis a Russian domestic political contextualisation shows this.

Still, is the Kremlin willing to risk its relations with the West - EU, Nato and the US - over such an insignificant issue as the Baltic question? Actually, such an assumption should not be ruled out. Already, Moscow is at loggerheads with Washington, and the US understands that it now has to be tough on Russia in order to have a working relationship. The European Union, however, takes a much weaker stand when it comes to Russia, and when it does confront Moscow it is on negotiation issues such as the Partnership and Cooperation Agreement (PCA) and the European Energy Charter. Until now, Russia has never had anything to lose in real terms in relations with the EU, and the Union consistently avoids putting its foot down in relations with Moscow. That Poland and other member states, in this context, may hamper EU-Russia negotiations is officially treated with resignation in Bruxelles, while most unofficially sigh with relief. Thus, Russia rationally calculates that the EU will never truly make a stand in their relations, why Moscow really risks nothing by a confrontational policy.

Developments in Russia are met with growing concern in Europe, and there is an understanding that sooner or later the European Union will have to confront the issue, as many of its members are already experiencing the realities of a more assertive Russia on the world stage. Doing so, however, sets out from, on the one hand, foreign relations and, on the other hand, Russia's domestic political situation. The latter is mainly directed at the crisis for democracy and human rights and far too seldom at the factors that Russian rulers themselves would deem of political importance. Foreign and domestic factors are increasingly treated as monolithic and attempts at joint analysis are often superficial or aim at the wrong factors.

The result is that it is becoming all the more of a mystery in the West why Russia acts as it does. The West is once again allowing Russia to become "a riddle wrapped in a mystery inside an enigma" for the evident reason that Europeans are too subsumed by their own values, norms, perceptions, and prejudice to follow the simple logics of current Russian politics and society. Then it is much easier to produce an image of a state that once more might pose a threat to Europe - an alien entity accepted by its mere existence but doomed to remain foreign to Europe. Here, the Russian-Estonian crisis serves as a striking example of how the West fails to account for important factors in its perceptions of Russia. As European public opinion turns increasingly against Russia, the risk of misperceptions may become an even greater danger than a revived Russian threat in the eyes of Europe. Russian motives are not always what they seem.

Estonia's New Coalition Government

After weeks of negotiations, an agreement on a new coalition government in Estonia was today finally reached. Thus, for the next four years, Estonia will be ruled by a government of Reformists, the Pro Patria and Res Publica Union (IRL), and the Social Democrats. That is, if the coalition partners will be able to see eye to eye in the long run.

Until now, the track record for Estonian governments has for most part been less than a year in office. Still, the 4 March election results proved an exception from this rule, as the Prime Minister, Andrus Ansip, retained support for staying in office for the first time since Estonia regained independence in 1991. Consequently, the main goal of coalition talks seems to have been to maintain the political stability that the elections formed a basis for.

Still, as previously reported, next to everything seemed up for grabs after the 4 March parliamentary elections. The only clear thing was that Prime Minister Ansip's Reform Party would take the lead in government formation talks. Who the other government coalition partners would be was however unclear. How great an importance that in the end would be given to a broader and more stable government was the great question in Tallinn. Speculations on a grand coalition have been frequent and for long there were many indications in this direction. One obvious result of the coalition now formed is that the Reformists have left out both their old coalition partners in the previous government, namely the Centre Party and the People's Union.

That Edgar Savisaar's Centre Party would not form part of a new government came as no surprise, as Reformists and Centrists had been the main contenders for power during the election campaign. However, also the Estonian People's Union was left out, which may be attributed to its losing almost half its votes in the elections.

Still, this was not a foregone conclusion as also the Pro Patria and Res Publica Union (IRL), which forms part of the new government coalition, suffered a similar fate. The conservative IRL was previously the biggest opposition party in parliament - the Riigikogu - but what perhaps was decisive for including the IRL was that its election loss was expected in contrast to that of the People's Union. It was also quite clear at an early stage that Reformist coalition-builder Ansip would opt for including the IRL in the new government.

One potential partner that particpated in the race for government power was the Green Party, which entered parliament for the first time by the elections. That this did not become the case was probably due to the same reasons motivating its inclusion: It might have proven quite gullible for the other coalition parties once in government. Consequently, Green Party leader Marek Strandberg characterised the reasons for leaving coalition talks thus: "The current situation reminds us of a school excursion to the Tallinn meat factory, after which the temptation to test the sausage considerably diminishes."

As the Green Party abandoned coalition talks, Prime Minister Ansip was left to broker a deal with the Social Democrats. In the end, it turned out that the Reformists and the IRL would have to pay a high price for winning over the Social Democrats. All in all, the coalition package will be a staggering 47 billion kroons - the equivalent of 3 billion euros - for covering the reforms of the three government partners. Such state expenditures will only add to Estonia's problems of an already precariously overheated economy.

The costly coalition deal has led to massive critique from Centre Party leader Edgar Savisaar. The Centrists themselves were heavily criticised during the election campaign for making irresponsible and populist promises of expensive reforms that might topple the Estonian economy. For the Centrists, this might have proven a decisive factor for losing the elections. Thus, Savisaar now argues that "Ansip has chosen the road to Golgotha for the new government." This might well be true, but such a statement also raises the question whether the Centre Party may reach resurrection in the next elections. It is true that Savisaar will only be 61 years old in 2011, but considering his health problems, he might well exit the political stage much earlier. Thus, rumours of his political immortality may be greatly exaggerated. Without Savisaar's dominant and all-exclusive leadership of the Centrists, the party would probably fall apart within weeks, as there is no clear successor, and nobody could shoulder Savisaar's role of constant fighter. Perhaps, there is no wonder that his wife, Vilja Savisaar, takes an increasingly active part in the party's top-level decision-making.

Still, regardless of Savisaar's future, the Centre Party is on the retreat. The Estonian people decisively opted for political stability and continued reform and modernisation to fully integrate with the European Union. Here, the Centrists have little to offer. The great challenge now for the new government is to realise the people's hopes. Regrettably, the costly coalition deal fares ill for the new government's prospects to fulfill the hopes for the brighter future the Estonians so much desire.

Update: Mart Laar on Thursday declared that he will himself not seek inclusion in the new Estonian cabinet. Instead, he will concentrate on developing the new Pro Patria and Res Publica Union (IRL) to seek leadership of the unified party. Stepping aside of government duties also gives Laar the opportunity to lead IRL in the 2011 elections without the political burden a cabinet post might have involved.

A surprise in the new cabinet is the inclusion of Jüri Pihl as Minister of the Interior. Pihl has previously headed the Estonian security police (KAPO), and also been Prosecutor General. Until now, Pihl has been unpolitical, but will now represent the Social Democrats in cabinet, which further strengthens the impression of a coming SDE stronghold on Estonian politics. Pihl is widely believed to have close relations with Western structures and has also been close to Aleksander Einseln, former Commander in Chief of the Estonian Armed Forces.

What Government for Estonia?

Defying all odds and opinion polls, the Reform Party stands as victor of Estonia's parliamentary elections this Sunday. Thus, Savisaars populist Centre Party was beaten by a close 1.7% margin. Together, the two reluctant coalition partners now form a majority of votes in the Estonian Parliament - the Riigikogu. It is, however, too early to say if Reformists and Centrists will continue their government cohabitation. In essence, the upcoming government formation may present almost any combination of parties in a coalition cabinet.

Sunday's election results must be characterised as a landslide victory for the Reformist Party, led by Prime Minister Andrus Ansip. The party went from 17.7% support (19 seats) in the 2003 parliamentary elections to 27.8% (31 seats) now, thus increasing its support by 10% of the electorate. Thus, the Reformists will dominate the 101 seats' parliament as its single largest party, and Ansip has also been asked to form a new government by President Ilves. Ansip is also the first Estonian Prime Minister to survive an election, and the second Baltic after Latvia's Aigars Kalvītis. This does not necessarily mean that the current government coalition will remain in power. To the contrary, the election campaign has been very tough between the main coalition partners - Reformists and Centrists. Still, it might be a good idea to keep track of reservations at Tallinn restaurant Balthasar in coming days, to see whether a new "garlic coalition" may be reformed.

Concerning Edgar Savisaars Centre Party, it held its ground, and went from 25.4% (28 seats) in 2003 to 26.1% (29 seats) in the current elections. Due to the mentioned antagonism between the Centrists and Reformists during the election campaign, few observers believe that the parties will continue their government cohabitation. Still, together they would form an absolute majority in the Riigikogu, which might partly serve as a convenient solution to governability and partly marginalise the opposition. Despite indications to the contrary, this option should not be too lightly ruled out.

As for the third government coalition partner, the Estonian People's Union, the party remains in parliament, although almost halving its votes from 13% (13 seats) in 2003 to the now 7.1% (6 seats). The People's Union is a populist and nationalist agrarian party. The party, founded by former president Arnold Rüütel, has been in government with both the Reformists and Res Publica (now IRL - cf. below), and was also a coalition partner in the outgoing Ansip cabinet. Consequently, it might prove very convenient for Ansip to form a consistent right-wing government of Reformists, IRL, and the People's Party.

What might, at first sight, appear as the great election loser is the Pro Patria and Res Publica Union (IRL). In comparison to 2003, the party went from 31.9% (35 seats) to Sunday's result of merely 17.9% (19 seats). This result was however expected, and IRL actually had a stronger showing than expected. Last spring, the two conservative parties - Pro Patria and Res Publica - merged to unify the conservative electorate, which also made it Estonia's biggest opposition party. However, prior to unification, Juhan Parts' Res Publica government had been ousted, marginalising the party in Estonian politics. In view of this, the unified party's result in Sunday's elections was better than expected, despite the fact that it lost almost half its seats in parliament. Some of this loss may also be attributed to the Christian Democrats, which competed for the same votes as IRL and did not reach the 5% parliamentary threshold. As for IRL's potential for forming part of a new government, Reform Party leader Ansip hinted in this direction before the Sunday elections. However, judging from results, a Reformist-IRL coalition would need a third party to form a workable parliamentary majority. Together, the two parties occupy 50 parliamentary seats, falling below absolute majority by a single seat.

Such a partner might well be the Social Democrats, which also increased its votes from 7% (6 seats) in 2003 to 10.6% (10 seats) now. Prime Minister Ansip has also hinted that a leftist alternative might be preferrable, but whether this might include the Social Democrats or the Centre Party is unclear. Personal animosity between leading Reformists and Social Democrats is a factor that must be calculated with in this context, and in the end this might rule out a Social Democratic role in government.

Another alternative to a non-centrist government is the newcomer to Estonian politics, namely the Green Party. With 7.1% of votes (6 seats) they passed the parliamentary threshold with a wide margin. Speaking for such an alternative would be that a new party might be quite gullible for the other coalition parties once in government. A coalition between Reformists, the People's Union, and the Greens - as well as other combinations - is an unexptected option that might present too tempting an alternative to resist for Ansip.

All in all, next to everything seems up for grabs at the moment. As the obvious government former, Reform Party leader Ansip might choose next to any coalition partners he sees fit, and the few contradictory indications he has made so far only add to the impression of an unpredictable political landscape in the country. Still, the main result of the elections is - as a matter of fact - that relative political stability has been achieved for the first time since Estonia regained independence in 1991. As its neighbour Latvia, Estonia now strengthens the tendency towards a more robust political system in the Baltic States. This, in itself, constitutes a great success, regardless of which parties in the end will form the next government.

Estonia's e-voting Elections

As Estonia is approaching parliamentary elections on Sunday 4 March, it is becoming the first country in the world to use electronic voting over the Internet in national elections. Since the web ballots opened this Monday, more than three percent of the electorate have cast their votes using the Internet. Although this is not more than some 30,000 voters, the introduction of web voting in national elections must be considered a great success.

Estonia is not new to electronic voting. The first proposals were raised already in 2001, but then the President vetoed the decision. Thus, it was not until the 2005 local elections that the system was put to the test. Then, not more than 9,000 people used the Internet for voting. Now, when three days remain till the elections, more than three times the number of voters have chosen electronic voting. For practical reasons though, voting was limited to 26-28 February, presumably coinciding with the time allowed for general preliminary voting. Of these votes, the electronic ones constituted some 19%, which is an impressive figure.

What about practicalities then? It is really quite simple. You need access to the web, a national identification card, and a card reader the cost of 6-7 euro. Then you are set to vote. As many Estonians already are used to filing their income tax declarations in this way, many voters already have everything needed for casting their votes on the Internet.

Then, what if you regret your choice come election day? The principle is simple. Electronic votes are considered preliminary votes, and you simply go to your polling station, withdraw your preliminary - electronic - vote and then cast your vote as usual. It is as easy as that. The question is how many people actually will do that. Experiences of preliminary voting show that only a fraction of votes cast ahead of elections are altered on election day. So, as the system will work nicely when a solid majority is expected, it will probably be questioned when it comes to close elections. Also, as with all preliminary procedures of this kind, allegations of election fraud might possibly be raised. Still, Estonians trust their preliminary voting system - electronic or not.

So, why is it that a small country on the Baltic Sea becomes the first country in the world to allow electronic voting in national elections? Estonia is considered the world's most web-dense country. For young people, using the Internet for daily chores has become a habit. As for e-voting, this is also the group expected to use this opportunity the most - at least judging from the 2005 local elections, when most e-voters were under the age of 35. Whether e-voting will influence election results remains to be seen. The election campaign remains very tough until the last moment, and one should not preclude the possibility that e-voters might miss out on political events in the days remaining till the Sunday elections.

Give Peace a Dance?

Who would not agree that a night at the disco is better than a night with a Kalashnikov? Hence, "the supply of discotheques in conflict resolution is often underrated. The loudest music wins." That is what Swedish foreign minister Carl Bildt said during a seminar with the presidents of Georgia and Estonia - Mikheil Saakashvili and Toomas Hendrik Ilves - at the German Marshall Fund's Brussels seminar on the Caucasus this Monday.

President Saakashvili was quick to agree with Bildt, proposing to build "lots of discotecques" to contribute to peace in the Caucasus. "There is a lot to be won if you can get people to dance instead of running around the streets with weapons," the two statesmen argued.

Following up on this idea, Carl Bildt later wrote on his blog: "I suspect that we during the seminar introduced the idea of 'discotecques for peace.' It was about giving - with small means - young people in confrontation and conflict zones a possibility to naturally spend time with each other. A night at the disco is better than a night with a Kalashnikov. Especially in South Ossetia."

As much as this idea might seem daft, one should not underestimate the significance of a neutral meeting-ground during conflict. Giving people a chance to concentrate on something else for once except war and conflict, indulging in pleasure instead of shooting at each other might, at first glance, seem like a good idea. Also, bars and restaurants have in recent years become the target of terrorist attacks, much motivated by the fact that they represent values not tolerated by extremists and war-mongers.

However, when regarding the issue more closely, one wonders who would constitute the disco clientele. Who could really afford going to the discotecque in a conflict or war zone? The answer is obivous for all who have seen conflict: It is mainly the profiteers of war that can allow themselves such luxury during conflict. Ordinary people just would not even consider it when they can hardly win their daily bread, and for them establishments of this sort are only associated with criminality, prostitution, and possibly foreign soldiers and aid workers.

Still, the idea might seem novel and original. However, it is far from a new concept. Dancing for peace first came in vogue during the "flower-power" era in the late 1960s, and formed part of the expanding international peace movement. Peace dance festivals have since been a recurrent phenomenon to promote pacifism. For Carl Bildt, this is perhaps a sign that he is getting old, as his youth was much spent combatting exactly this sort of "leftist" ideas. But perhaps he has come to realise that with more discos "peace will guide the planets, and love will steer the stars."

As for the "discos for peace" proposal one cannot but wonder how distant and distraught political leaders are from the realities of war and conflict, thinking that such ideas might give peace a chance to dance. What is there then left to say but: "Send in the clowns!"

A Bursting Baltic Bubble?

Are the Baltic states facing an impending economic crisis? So seems to be the case, due to the current overheating of both Estonian and Latvian economies. Earlier this week, Standard & Poor's as well as Deutsche Bank warned that Latvia's economic imbalances might cause a currency devaluation. Estonia risks a similar fate in the runup to its 4 March parliamentary elections. Only Lithuania seems to be getting off scot free.

In January, Standard & Poor declared Latvia Europe's "most dynamic economy in 2007" with a GDP growth of 8.9%, and with neighbouring Estonia coming in second, with a 7.5% growth. Estonia and Latvia - along with Slovakia - are the fastest growing economies in Europe.

Growth, however, has a price. Both economies are facing an inflationary spiral with most economic indicators going wild. In the battle over customers, Latvian banks have lended money to consumers at an interest lower than the inflation rate, and Estonian banks have followed suit.

However, Latvia's problems are the most acute. Since January, economic growth has risen to 11%, by far exceeding the 6-7% that are long-term economically sustainable. High domestic demand and corporate investment rates add to the problems. The increase in imports - clearly over what the country exports - has also created a worryingly negative balance of trade.

As for the labour market, supply cannot meet demand as many Latvians work abroad. The annual wage-rises of an average 10% have so far been compensated by a corresponding growth in productivity, but this year the tendency is towards an impassable 20% rise.

What may really topple the economy, however, is the negative real interest rate combined with a high rate of public lending - largely in euro-loans. According to some sources, this has caused prices of real estate to double in recent years.

All in all, if Latvia were now to devalue its currency - the Lat - banks would be forced to compensate themselves by a drastic increase in interest rates. With loans largely in foreign currency, consumers would face acute solvency problems, potentially with a consequent crisis for the banking system. As it appears, recession seems to stand at the door.

So, what has the Latvian government done to curve inflation and battle economic overheating? Precious little, one must admit. Already last spring, Standard & Poor predicted several years' delay for Latvia's inclusion into the eurozone, postponing it for 2009-2010 at the earliest. Prognosis was based on sustained price growth, driven by demand and rising inflationary expectations. This, in itself, should have been a clear stop-sign for the Latvian government.

All the same, the Latvian economy is basically in good shape. The country's foreign debt is low and the state economy is under control. And, obviously, economy is booming. So, why waste a winning concept, seems to have been the reasoning of the government. Some measures have been made, but they have either failed or been dubious as for their effects.

Also, it is quite obvious that the government had had more reasons to be content. In October, the government coalition, led by conservative People's Party (Tautas Partija) leader Aigars Kalvītis, was the first to be re-elected since the country regained independence in 1991. No wonder the government had a laid back attitude to developments, wanting to enjoy its honeymoon with the voters as long as possible.

However, now the government has come to a rude awakening, as the situation has quickly gotten out of hand. The question is if it will dare to challenge the banking and financial sector, which - as in Estonia - belongs to its key support groups. It is questionable if the Kalvītis cabinet can rise to the challenge. In the meantime, the fear that the Baltic bubble bursts will linger on.

Estonia: Battle by Bronze Proxy

Why is it that a WW II-monument repeatedly sparks bilateral crises between Estonia and Russia? This question has, in recent days, gained new relevance after strong Russian reactions against the Estonian parliament's decision to remove the so called Bronze Soldier (Pronkssõdur) soviet war monument from central Tallinn. The reason is simple: The Bronze Soldier has become a proxy for the conflict between Estonian and Russian interests in Estonia before the 4 March parliamentary elections. The Estonians thus vage a battle by bronze proxy.

It is becoming increasingly clear that Edgar Savisaar's Centre Party (Keskerakond), will stand as victors on election day, ousting the coalition government led by Prime Minister Andrus Ansip's Reform Party (Reformierakond). Such a result risks toppling the delicate balance between western financial interests, dominating the Estonian banking system, and Russian interests controlling the lucrative transit trade, with far-reaching consequences for domestic and foreign policy.

Economic interest has been one of the main driving-forces in Estonian politics since the country regained its independence in 1991. A division of labour was developed roughly between two opposing groupings - the Russians controlling transit trade and backed by Moscow, and the Estonians controlling the financial and banking sector and backed by western - mainly Scandinavian - interests. This is reflected also in politics. Thus, Savisaars Centre Party has gradually become Moscow's agent, with heavy economic backing from Russia, to the point that the party actually has entered into union with Russian power party United Russia (Единая Россия). Savisaar's main opponent, the Reform Party, is to the contrary linked to finance and banking dominated by western business interests. A final peculiar twist to the matter is that these two main contenders for political power in Estonia, in fact form the current coalition government, together with the People's Union (Rahvaliit).

It is obvious that the the Bronze Soldier crisis this time is a desperate attempt by the Reform Party, facing potential defeat, to gain votes by shedding light over the close relations between the Centre Party and Russia. So, who are the major players in Moscow's relations with Estonia? On the Russian side, two names stand out as safeguarding these interests, namely Gleb Pavlovsky, one of Russia's foremost "political technologists," and Igor Levitin, Russia's Minister of Transportation. Pavlovsky gained wider international attention in 2005, due to allegations of involvement in the dioxin poisoning of Ukrainian president-to-be Victor Yushchenko. As for Levitin, Savisaar the other year unsuccesfully tried to grant him Estonian citizenship due to his great services to the country.

Then, what is actually at stake for the upcoming elections? Estonia is currently struggling with an overinflated rate of public lending - a financial bubble that could easily burst in face of any radical change of power in Tallinn. If Savisaar's Centre Party would win on 4 March, this might well be the spark to set off a major financial crisis in Estonian economy. As the Reform Party relies on the finance and banking sectors that constitute the lenders, such development would be catastrophic to the party, and potentially topple the fragile balance of power within Estonian politics and society. Moreover, it would hit hard on the western investors, forming Estonia's link to European economy. Therefore, the Reformists now are desperate to undermine the Russian interests forming the power base for Savisaar's Centrists. Thus, the Bronze Soldier crisis must be seen as an attempt to provoke sanctions from Russia, which would hit the very transit trade that forms the basis of Savisaar's Russian backing.

As the Estonian parliament (Riigikogu) this morning decided to move the Bronze Soldier monument, the country's president, Toomas Hendrik Ilves, was quick to declare that he would not sign such legislation, claiming it to be in breach of the constitution. In this context, one must ask whether it really was necessary for the parliament to pass a law on the removal of the Bronze Soldier. If this really was the intention of the Reform Party, could it not have been easier accomplished by a simple government decision? From this perspective, it is quite obvious that the Reformist ulterior motive was to provoke a crisis with Russia that would benefit the party for the upcoming elections.

So, what have been the reactions in Moscow? Russian Foreign Minister, Sergey Lavrov, was quick to characterise the decision as a "grave mistake" and as a "blasphemous act." Also, the chairman of the Russian Duma's foreign relations committee said that the decision would have catastrophic consequences for Russian-Estonian relations, especially trade and economy, thus hinting at exactly the effect the Reformist Party wanted to achieve. However, Estonia's ambassador to Moscow, Marina Kaljurand, was quick to point out that Russia would be unlikely to impose bilateral sanctions on Estonia, not wanting to risk a "trade war" with the European Union. What will actually come out of this is yet to be seen, but it seems that Russian politicians would be shrewd enough to call the bluff. Still, Russian-Estonian relations have been shaky for long, as previously reported, so it is difficult to say what will come out of Moscow this time.

Here one should instead direct more attention to an overseen foreign policy factor in the context of Russian-Estonian relations, namely the projected Russian gas pipeline through the Baltic Sea. This crucial project for Russia is meeting increasing opposition among Baltic Sea states, and currently public opinion also in Sweden is turning against letting the pipeline run through its territorial waters. Would Sweden and other Baltic states turn down the project, with a Centrist government ruling Estonia, one scenario is that Russia might turn its frustration towards Tallinn, possibly giving massive support to Savisaar in order to gain a permanent influence over EU-member Estonia. This would create a very difficult terrain for the EU and Estonia's neighbours to manouevre, not to speak of what challenges it would pose to president Ilves and the Estonian political system.

Finally, is there any solution in sight for the issue of the Bronze Soldier monument? As for its removal, Estonia probably lost its chance back in 1991. However, doing so spurred an idea of expanding the monument to hold also statues of Estonian, German, as well as allied soldiers of WW II, along with various paraphernalia. This idea was never realised, paradoxically due to lack of metal for the statues. In the early 1990s, Estonia was a major exporter of metal, despite its evident lack of this type of natural resources. Mainly Russian business interests made fortunes by exporting whatever metal scrap they could lay their hands on, thus forming the mighty Russian economic interests that now dominate the transit trade. So, what then made Russian fortunes - the metal that might have expanded the Bronze Soldier monument into a unifying symbol for Russians and Estonians alike - now comes back to haunt the transit profiteers by a constant threat of sanctions to their trade. Had there been metal then, this explosive matter might have been defused at an early stage. Then, of course, Estonians and Russians would probably have found some other symbol to quarrel over.

Comment: On Baltic economy, especially Latvia, cf. "A Bursting Baltic Bubble." For an overview of Russian-Estonian relations see also "Estonia: Stalemate in Russian Relations."

Estonia: Gay Ambassador Flees Homophobia

The Dutch ambassador to Tallinn, Hans Glabitz, has decided to leave his mission to Estonia due to "persistent racist and homophobic abuse," BBC reports. Glaubitz is openly gay and lives with his coloured Cuban partner.

The problem has not been on an official level. The Estonian foreign ministry is, to the opposite, careful to point out that the couple has been well received at an official level. Instead, Glaubitz decision is due to widespread public homophobia in Estonia. According to Glaubitz, the couple has been constantly harassed in public by skinheads and drunkards with homophobic and racist remarks.

The Glaubitz case regrettably demonstrates the kind of homophbia still latent in many East European countries. That even a foreign ambassador finds his posting to a fellow European country unbearable, shows how profound a clash in cultures may be between the liberal Netherlands and relatively conservative Estonia.

Estonia: Stalemate in Russian Relations

In August 1991, Estonia regained its lost independence after nearly 50 years of soviet occupation. Some 15 years later, Estonia and Russia still lack regulated borders. Last year a border agreement was finally signed, but it did not take long before Russia withdrew from the treaty - something next to unprecedented in international relations. Since then, a stalemate persists between the two countries as relations thus reached a dead end. What will it take for Estonia and Russia to sort out their differences?

In May last year, everything seemed set for a go-ahead on a final Russian-Estonian border treaty. The last hurdles had been cleared, as the two foreign ministers decided to sign the treaty in Moscow on May 18, instead of the infamous 9 May Soviet victory day. The latter was not possible, while 9 May 1945 signified the seal of Estonia's soviet occupation. The treaty was signed and the only thing that remained was to have it ratified by parliaments in the two countries. Both were eager to remove the matter from the agenda once and for all, and hastened to have ratification bills passed by parliaments. Just weeks earlier, president Putin had declared that:

Russia is ready to sign formal border treaties with Estonia, Latvia and Lithuania. I hope this will not be accompanied by some idiotic territorial demands. In today’s Europe, in the 21st century, one country making territorial demands against another, at the same time wanting to ratify a border treaty - this is complete nonsense.

However, this is more or less what happened, at least according to Moscow's version of events. Whereas the Russian parliament - the State Duma - was hesitant to ratify the border treaty, anticipating trouble, Tallinn moved on. Eager to get the question off the agenda before vacations, the Estonian government also put the treaty before parliament - the Riigkogu. Reactions to this were negative from the very outset, as many parliamentarians held that the government thereby tried to force through the treaty without proper discussion and debate. To be passed, the bill had to get a 2/3 majority. Such majority suddenly seemed unable to reach, why the government preferred to enter negotiations instead of facing certain defeat. These negotiations resulted in a separate preamble or declaration to the border treaty, referring to the Tartu Peace Treaty of 1920, by which Soviet Russia recognised Estonia's independence within the pre-WWII borders. However, current borders have been revised during soviet reign, which makes Tartu references unacceptable for Russia. With this preamble, the Estonian parliament passed the ratification.

Moscow's reaction
Moscow's reaction was predictable to say the least. On June 21, Russia's Ministry of Foreign Affairs stated that it would not put the treaty before the Duma for ratification. Then, during a visit to Helsinki at the end of June, foreign minister Lavrov declared that Russia had decided to revoke its signature from the border treaty. This is also what happened, and on 1 September president Putin formally withdrew Russia from the treaty. The move to withdraw from an already ratified treaty is next to unprecedented in international relations, and must be considered a very stern reaction. The scandal, a few years back, when president Bush revoked the US signature from the treaty on the International War Crimes Tribunal has reverberated in the international community ever since. Examples are scarce, because the international outcry for doing so is expected too great, and one has to pay too high a price for it to be worthwhile. Still, this was exactly what Moscow chose to do.

Estonian explanations
Why did the Estonians act in this way, if they clearly understood what the reactions from Moscow were to become? What were they to gain from this? Some suggestions have been made, although they fail to explain for - even in combination - Tallinn's action.

One factor is that Estonia in April 2005 went through a government crisis and that the sacked prime minister and leader of the Res Publica party, Juhan Parts, quickly needed to profile himself with some cause, not least after a failed unification of Estonia's two right-wing parties - Res Publica and the Reform Party. Thus, demands connected to the border treaty seemed as a convenient opportunity for Res Publica.

Another reason is that the foreign minister of Ansip's new Reform Party government - 31-year-old Urmas Paet, simply was too new and unexperienced on his post, why he could not manage to deal with Moscow and domestic political intrigues at once.

A third explanation, is that government coalition partners - not least the Social Democrats with their grey eminence Thomas Hendrik Ilves at a safe distance in Bruxelles - stood to gain from a squabble between the two right-wing parties.

Then, there is Estonian politics' black horse of Edgar Savisaar and his Centre Party. Being the new minister of finance, Savisaar was arguably the one pulling the real strings in cabinet affairs. Savisaar is a political survivor with a murky soviet past, who has been constantly scandalised over the years but always gets away without a stain on his popularity, especially among poor and rural population, including the Russians. Also, Estonian conservatives are usually quick to point out that the Centre Party is in union with president Putin's United Russia, thereby casting suspicion on him for being on Kremlin's leash or even - at times - payroll.

Finally, it must have been hard to put off Russian interests, though not necessarily Russia itself, from the temptation of exploiting Estonia's domestic difficulties in this situation. Whether the Russian factor could hold on to itself in not giving in to such an urge will however remain unclear. The effect was though in Russia's interest. Thus, Estonia stood to gain nothing, but to once again be portrayed by Russia to the great powers of Europe as an amateur in international relations in disrupting the treaty. Still, blaming Moscow is simply too much of going through the motions to be taken seriously. Perhaps, Russia in reality simply had to stand idly by while the Estonians themselves fumbled about in torpedoing the treaty.

So, is there any way out of this mess for Estonia? At an OSCE-meeting earlier this spring, foreign ministers Lavrov and Paet discussed the need for resumed negotiations to settle the border issue once and for all. Some discussions have also been held since, but both parties seem to agree that a ratified treaty will not come into force in the foreseeable future. The issue is simply politically dead at the moment, while so much prestige was put in on both sides to finalise the border settlement. Once this was lost, little room was left for future talks. Estonia thus seems to have little choice but to let the issue at rest for the time being.

Dealing with Russia
In view of the current situation, how should Estonia handle its relations with Russia? Professor Andres Kasekamp, director of the Estonian Foreign Policy Institute, believes that Estonia now will opt for an EU-solution. According to Kasekamp, Estonia should take the CFSP/ESDP more seriously. This is also currently the sentiment among many politicians in Estonia. The country seems intent on playing out the EU-card, despite the Union's demonstrated inability to stand firm on Russia. Such a policy thus seems to have a weak foundation in current realities. That Sweden and Finland were the only other EU-states in support of the Estonian position concerning the border treaty, is a telling example of how little the EU cares about Estonia's relations with Russia. EU politicians are simply fed up with the whole affair of Estonia not being able to conclude a border treaty with Russia for the last 15 years. EU-support thus seems destined to fail, and EU's European Neighbourhood Policy appears to offer little use to Estonia, as it does not comprise relations with Russia.

The alternative of handling relations with Russia through Nato should, in this perspective, seem all the more tempting to Tallinn. Such a method would, in reality, mean using the US and the Transatlantic link to influence NATO-policy. In May 2005, president Bush visited Riga, and among other things discussed subjects such as democracy and freedom in Eastern Europe. This kind of US high-level discussions is in the best interest of Estonia, while statements to this fact facilitate setting the Nato-agenda in Tallinn's favour. US vice president Cheney's speech at the May 2006 Vilnius Conference also signalled a change towards a more critical stance in US policy towards Russia. In November this year, Riga will host the annual Nato Summit, offering an opportunity to further Estonian interests in relations to Russia by proxy of Nato. Estonian chances to bandwagon with the US to deal with Russia through Nato are therefore greater than ever. Still, Tallinn strangely enough seems to prefer the EU option - perhaps reflecting the post 2001 change in Nato's geographical focus. What Estonia fails to recognise is the fact that also within Nato, the tide is changing in relations with Russia. Tallinn should clearly not miss out on this opportunity to use a change in US and Nato policy towards Moscow in its own favour.

Finally, a joint approach in coordinating Estonian interests on Russia to concurrently influence both Nato and the EU in the same direction might be a recipe for success, but this is simply too complex a task for a small country to pull off.

Domestic difficulties
In the meantime, the Russian question in Estonia continues to drag on as an annually recurrent tradition. The drama has been played out by more or less the same actors over the last 15 years with little variation. This year's incident was the 20 May desecration of the Bronze Soldier Monument (Pronkssõdur) by Estonian nationalists. For Russians, it is a memorial to Soviet soldiers who died fighting in World War II. For Estonians, it is a symbol of the Soviet occupation.

Therefore, in connection to Russia's victory day each year, soviet veteran ceremonies at the monument are ritually followed by protests from Estonian nationalists. This year, events have been especially serious with a string of demonstrations. Among Estonian nationalist demonstrators were crackpot professional dissidents such as Holocaust-denier Tiit Madisson, but also more respected people such as former commander-in-chief Aleksander Einseln. Their objective is the removal of the Bronze Soldier from central Tallinn, and little consideration is taken to reasoning in view of their unwavering demands.

The situation has been exploited by extremists on both sides. Last week, the headline of the leading Russian newspaper in Estonia, Vesti Dnia (fmr. Sovetskaya Estonia), read: "On the Brink of Civil War." Also, rumours about Russian vandalisation of Estonian monuments, e.g. in Tartu, are spreading, and the resurfacing of old Interfront activists has been quite unexpected. Probably, protests will peter out in a few weeks, but it is worrisome that extremists repeatedly are allowed to set the political agenda for almost a month each year. This is simply not a sound political tradition for a small country like Estonia. Protests and demonstrations may well be overlooked by the majority of Estonians as an annual freak event, but each year extremists are allowed to set the public agenda through media.

Narva and the Russian-speaking population
When one refers to the situation of Russians in Estonia or Latvia, one should be aware of the fact that this does not necessarily mean Russians as such. Migration to Estonia in the post-war era came from all over the Soviet Union, why it might be as natural to come across a Tajik, a Ukrainian or a Lithuanian in Tallinn as it is with a Russian. Today, they all meet the same conditions and requirements for residence permit and citizenship no matter what their place of origin might once have been. That Russians are in a majority should not serve to hide this fact.

Estonia's Russian-speaking population is concentrated partly to Tallinn and neighbouring cities, and partly to Eastern Estonia. However, it is in the East that the Russian dominance is especially compact - in cities like Narva and Kohtlajärvi. For long, crisis has coincided with ethnicity in this part of the country, which incidentally also neighbours on the disputed border areas with Russia. Unemployment and social malaise have been a constant feature in Eastern Estonia during the last 15 years. A destitute population with little hope for the future has presented a great problem for Estonian authorities. The city of Narva, right on the border to Russia, facing Russian Ivangorod on the other side of the river, is a telling example.

In reality, the few Estonians living in Narva are state representatives in some capacity, and they associate little with the local Russian-speaking population. In Narva, it is perhaps no coincidence that the well-held offices of the Russian Consulate are located only a few hundred metres from the headquarters of KaPo - the Estonian security service.

However, things are now looking brighter for Narva. The situation is still such that everyone who knows how to, tries to move away from the city. Many of the top students at Estonian universities originate from Eastern Estonia, strongly motivated from knowing that the alternative is poverty. This may not be the case in the future though. In recent years, things have begun to turn around for Narva. Unemployment has decreased and many industries are moving production to this area due to dramatically rising costs and a deficit of qualified labour in Tallinn and the densely populated areas of Western Estonia. The opposite to high costs and unskilled labour is exactly what Narva has to offer. Adding to this, the lower wages in this region attract a rising number of investors. Whereas activities still are far from bustling, the tendency towards a rather rapid development within the next decade is clear.

Until now, Narva's economy has largely depended on border trade with Russia. With much lower prices on petrol, alcohol, and tobacco in Russia, shuttle traders cross the border back and forth on a daily basis, bringing merchandise for illegal distribution and sale on Estonian and Western markets. There are few figures on the full extent of this trade, but Russian customs' estimates say, that it accounts to some 20-30% of Northwestern Russia's foreign trade. There is no wonder then that transit-trade is Estonia's most profitable business, the proceeds of which have made great fortunes for the people who control it. Today, a majority of Estonia's richest businessmen are ethnic Russians. The paradox is that the population of Narva and Eastern Estonia has had little to gain from the shuttle-trade. Most of the money has ended up in the pockets of a few fellow compatriots that could not care less about the situation of their Russian kin. Therefore, the future of Narva rests on the opportunities to enter other economic areas.

That a rising number of businesses in Estonia are now moving production to Narva is thus very promising. Too long, the level of costs has not been sufficiently geographically diversified to make it profitable moving industry to the East. Now, this has changed, why companies will seek to increase their dividends by lowering costs by relocation. In the meantime, however, a generation of workers has been lost to Eastern Estonia due to unemployment destitution. The old generation may be lost, but the new generation faces a much more promising future, which might allow them to stay on in their hometowns in the East.

The Choice of a New Generation
Things are changing in Estonia with 15 years passed since regained independence. A second new generation is entering the public and business spheres. This generation has little to remember from soviet times. The situation applies to Estonians and Russians alike. The arguments from nationalists and pro-Russia groups are increasingly perceived as artificial constructs with little relation to everyday reality. Both groups are themselves becoming as antiquated as oblivious. With economic development, also social and economic differences between Estonians and Russians will narrow, and so will consequently also the potential for extremists to exploit such friction. The focus of a new generation in Estonia is set on Europe and not on Russia. Relations with Russia are increasingly becoming irrelevant for most people in Estonia. Once this is realised, Moscow will have difficulties to exploit the situation of the "Russian minority" in Estonia in relations with Tallinn. It will also become harder for Russia to raise support in Estonia per se by appealing to fellow Russians. Perhaps then, Moscow will definitely let go of its lost empire and plainly put borders and other issues at rest with Tallinn without further ado. However, also in Estonia it will take a new generation to sort out the country's differences with Russia, but in the end, Tallinn and Moscow will budge to the new realities.