Estonian prime minister refuses to resign over husband's ties to Russia

Kaya Kallas with her husband Arvo Hallik, who owned a 25 percent stake in a company that supplied an aerosol can manufacturing plant in Russia. Photo: Pavel Golovkin/AP

Kaya Kallas, Estonian prime minister and leader of the anti-Kremlin EU bloc, has said she won't step down after coming under pressure over her husband's business ties to Russia.

< p> Callas, 46, began to be called to step down after it became known that her husband owns a 25 percent stake in Stark Logistics, an Estonian company that supplies an aerosol can manufacturing plant in Russia.

At least two major Estonian newspapers have called on Ms Kallas to step down, and opinion polls have shown that most Estonians also want her to step down, although she insists her husband Arvo Hallik has done nothing illegal.

“There should be penalties for dealing with authorized goods, but everything else is a matter of moral principles,” Ms Kallas told ERR, the Estonian public broadcaster, on Friday evening. “I have no plans to resign.”

Ms Kallas won a second term in May after actively campaigning for her anti-Kremlin credentials.

Moscow ruled Estonia and its two Baltic neighbors, Lithuania and Latvia, after World War II until they seceded from the Soviet Union in 1991. Since then, the Baltic states have joined both NATO and the EU and are staunch supporters of Ukraine, even though they share borders with Russia and Belarus.

Customs of hypocrisy

Politicians in Estonia have accused Kallas of «hypocrisy» because she urged Estonian businesses to find a «moral compass» in their relations with Russia and demanded to break all but the most important ties.

She has now been forced to admit that she lent about £300,000 to an investment company through which her husband owns a 25 per cent stake in Stark Logistics.

“My husband said that his company Novaria Consult invested in this amount along with other capital in various financial ventures,” she said. «His company has now repaid the loan in full.»

Opposition parties have reportedly begun plotting a vote of no confidence in Ms Callas in Parliament, with even her allies saying she needs to step down now or risk undermining credibility Trust in Estonia.

“Particularly disturbing in this whole story is the fact that we in the government show zero tolerance for any business related to Russia,” said Lauri Laanemets, Estonian Minister of the Interior and head Social management. The Democratic faction in the government coalition.

Mr. Hallik did not comment, although the media reported that he had agreed to sell his stake in Stark Logistics.