As a journalist, I've often envied the people who run major banks in Estonia. The view you get of what your clients are doing is extremely broad — ranging from small business owners, bakers and accountants to large energy companies. Looking at how your client portfolio is doing, you can often get a sense of the Estonian economy or even the wider region about three or four months ahead of what's coming.

Yes, exactly. That's the appeal and why I've stayed in banking.

A bank really is at the heart of everyday life. We see and sense how Estonian society is doing more broadly and how different client groups are doing more specifically. Often, the signs we pick up in our client portfolio show up in official statistics three, six or even nine months later.

So why are things going so badly for us?

On the contrary — I'm naturally an optimist.

Of course, nearly three years of economic decline has been exhausting. But if we look more closely, there are logical reasons why it has happened this way and also why we've been hit harder than, for example, our southern neighbors, whom we like to compare ourselves with.

I'm an optimist by nature and believe optimism helps you move forward in life. When you look at the economy, if pessimism dominates, everything seems dark and bleak. But in reality, you can take any indicator and view it either optimistically or pessimistically — just like people and businesses do in life.

What I'd say today is this: yes, we've been through a relatively difficult period, but last year the Estonian economy managed to find its footing, and this year I see that we've slowly started to climb out of the hole.

And that's based on what you see yourself as the head of the bank?

Exactly — that's what I see and sense from our clients.

Every day I see some clients having their best month or quarter ever, while others are going through the most difficult period they've ever faced. For both, it can be hard to understand how their situation compares with the average statistics reported daily. But when we put those numbers together — and I believe generalizations and conclusions should come from aggregated data — I'd say the trend is upward. On average, our companies are doing better today than they were a year ago.

It's true that larger companies are generally doing better, while smaller ones continue to face tougher challenges. The main reason, I think, is that small business owners have smaller financial buffers. Setbacks, difficulties or problems with partners or suppliers hit them more directly and more quickly. Their cushions are thinner. But in the bigger picture, we see business confidence recovering.

There are more new projects than a year ago, and not just among large companies. We also see small and mid-sized firms investing more, across different sectors.

Isn't it a bit like this — when we talk about larger and smaller companies, the bigger ones, which on a small market like Estonia often end up being close to monopolies, simply have an easier time passing price increases and rising costs on to their clients? But for smaller businesses — if you're a hairdresser or a baker — that's not so easy to do, is it?

In some cases, that may be true, and much has also been said about the fact that the period of extremely rapid inflation is now behind us.

It's still at 5 percent.

That's a lot, I agree. But we also saw 25 percent, which is astronomical. When we were really up in those so-called inflation stratospheres, there was a lot of talk about "greedflation."

About greed.

The idea being that it's greed — you have the chance to raise prices, you do it, and since everyone is talking about prices going up, you just go along with it.

That may indeed be somewhat easier in certain sectors, in monopoly-like branches. But overall, I believe in the free market and open competition. And if we look at what our economy is made of, then it's mostly — over 80 percent — exports. Meaning Estonia's economic performance cannot be driven simply by raising prices for local consumers.

For the Estonian economy to grow and see good times, we have to be able to market our products abroad.

I'd like to ask a question that remains relevant with the current inflation and zero growth.

About a year ago, I had an interesting conversation with the outgoing Japanese ambassador, who was finishing his last posting before retirement. I told him the same thing — that at some point growth has to return, that it can't always be inflation and economic decline. He replied: look, when I graduated from university in 1991, I also thought the time would come when growth would resume. But in Japan, there were roughly 30 years when growth simply never came back, while inflation remained. Could we face something like that here as well?

Well, I'd at least like to hope we won't see anything like that. Our economy isn't that closed.

Japan is also a very export-oriented economy.

Yes and no. Lately they've become much more open in terms of foreign investment and other areas than they used to be. But I don't think we'll see that kind of scenario here. This year we will see positive growth figures — not very strong, but still economic growth on the plus side.

At SEB, we believe that next year growth could reach around 2 percent, maybe even more. But I don't believe we're headed into a deflationary environment.

We've seen three years of it almost.

I believe Estonian stubbornness and entrepreneurial spirit will break through this period of decline.

Let's talk about something you certainly know better than I do — who's doing well and who isn't.

June was extraordinary in that sense: Estonian banks issued nearly €270 million in home loans, which is a record-breaking figure. True, part of this is clearly because real estate has never been as expensive as it is now. But on the other hand, starting July 1, the VAT increase took effect, which had to be passed on to buyers of new developments, apartments or houses. And it seems it worked — at least many apartments were sold before the deadline.

But that also means someone had €270 million sitting in their accounts or these individuals were successful enough to qualify for loans from the bank. €270 million around Tallinn translates into about 500–600 private houses or several thousand apartments. That's massive — those people have to be doing well.

Yes, but there's a very simple explanation for that. Despite everything, the labor market in Estonia is still very strong.

Our employment level is higher than it was in 2019, which I call the end of the golden decade.

It's also been called the end of the lost decade.

Yes, but either way, things went well — each year was basically better than the last and the economy kept growing. For many, it created the illusion and perception that things could only move in one direction.

But our employment today is better and higher than it was in 2019. Yes, the unemployment rate is around 6.5 percent, but essentially I'd say that anyone who wants to work is able to find a job today. We may not be at the statistical minimum of 5 percent, but...

In Tallinn, or more broadly in Harju County, it's just a couple of percent — if that.

I mean across Estonia as a whole. Overall, I think our labor market is very strong. Yes, wage inflation has come down and wage growth has slowed somewhat, but it's still very, very strong compared with just about any market or country outside the Baltics. But if we look at consumer confidence figures...

They're very low.

When I talk with our macro analyst Mihkel Nestor, he says all the numbers are pointing upward. The only one that isn't — and he can't understand why — is consumer confidence.

To your knowledge, are the people buying private houses worth half a million or new apartments costing several hundred thousand — over a hundred thousand for sure — salaried employees?

I think it's a cross-section of our society. I'd add one clarification — if we look at the nature of these transactions, the share of new developments is smaller than ever, because, let's be honest, the prices of new developments are still relatively high.

I'd say extremely high.

Yes, and if the share of new developments in new home loan sales is around a quarter today, that's already good.

At least two-thirds are still transactions on the secondary market, where people can afford it but are also confident enough to want to improve their living conditions somewhat.

It's a cross-section of society. It's not just salaried employees or business owners — we see everything.

The activity in the housing loan market already began in the second half of last year, but what we've seen has surprised even us. [In] June, which you mentioned, we also thought a certain trigger might have been the VAT increase. But when we look at July's numbers, there was still very rapid new home loan activity. From an individual's perspective, the willingness to take on long-term obligations also points to a recovery in confidence.

If in 2025 — a time when our neighboring country is at war and geopolitical uncertainty is very high — a person still goes ahead and makes what is likely the biggest purchase of their life here in Estonia, then that shows people have a great deal of confidence that things will go well for us in every sense, not just economically.

It certainly does reflect that. There's plenty of criticism directed at the government, but there really does seem to be trust in the state's permanence.

Let's also talk about those who aren't doing so well. There are undoubtedly more of them than those who are doing well — that's only logical.

I don't know where you live, but I live west of Tallinn and in the evenings I often take longer bike rides. Out there you'll find Veskimöldre and Uus-Veskimöldre, some of Estonia's most expensive residential developments. One is now about 20 years old, the other is brand new. There are very beautiful houses there, costing at least €600,000 — and certainly some starting from €800,000.

And right between those two Veskimöldres sits a Rimi supermarket, which always has four or five job vacancies. It's not a large store, which means their staff turnover is quite high. As a resident in the area, I get Rimi's flyer in my mailbox listing the positions they're hiring for — and it also very honestly states the salaries. I can't imagine who could take those jobs, since the gross [monthly] pay is around €1,000.

With that kind of money, you can't buy an apartment in Veskimöldre — or in fact anywhere in Estonia. So there's a part of society that is employed — like the people working at Rimi — but who are actually doing very poorly. In the bank, you also see people who run out of money by the middle of the month.

We've been keeping an eye on one indicator: how many of our clients have less than €100 in their account before the next payday. That percentage has remained surprisingly stable, even through the period of high inflation.

It has fluctuated from month to month between 20 and 25 percent, which I'd say is a very high share.

So 20–25 percent of SEB's private clients have less than €100 in their account before the end of the month?

Yes.

That really is an astonishingly high number.

Yes, but it's been a consistent percentage.

How many private clients do you have who actively use their accounts?

Hundreds of thousands.

So it's fair to say that at least 25,000 of your clients are flat broke in the middle of the month?

Yes. And if we also look at those families who are still trapped in debt because of payday loan companies...

But it's also true that the labor market is strong and private savings have grown. At SEB, savings have been growing steadily at about 6 to 7 percent per year, which is quite a solid increase.

Altogether, private individuals' deposits amount to more than €10 billion?

In Estonia, it's around €12 billion in total and that pool of money is still growing.

That's almost half the size of the Estonian state budget.

But it's not distributed evenly. That much is clear.

Do you know how many of your private clients are growing their savings every month? What percentage of your client portfolio does that make up?

Honestly, I can't say for sure, but I think it's more than half. And what we see is that the percentage of those who are consistently struggling has remained relatively stable over the past two to three years. At the same time, however, the number of people who have started investing — or who are actively investing — has been growing.

Looking at that contrast in my own neighborhood — like the Rimi situated between wealthy residential areas — I've gotten the impression that maybe in the past ten years social mobility has really decreased. We know that Erkki Raasuke started out as a clerk at a Statoil gas station in Lasnamäe and has since gone on to run at least two major banks and do many other things and is no doubt personally very wealthy. But does a 21-year-old today, working as a shelf-stocker at Rimi, have any real hope of becoming, say, head of the loan department at a major Estonian bank five years from now?

Whether they could move from there to head of a loan department in just five years is another question, but the possibility of moving forward is certainly there.

This brings us back to where we started: what's a person's outlook on life? If I'm working as a shelf-stocker, is that the fault of society, the government or the state — or is it also because I myself have left something undone?

Will society be able to spot that talented and capable person working there at Rimi?

If the person recognizes it themselves, wants it, puts in the effort and sets it as a goal, then yes, they will be found.

Let me ask about people trapped in debt and those who are poor. There's been a lot of talk about payday loan companies giving people loans at very high costs. But when I look at Estonian banks' credit card interest rates, they're in a similar range. The average credit card interest rate is around 15–16 percent, maybe even 18 percent.

Well, the interest rates at payday loan companies are 70, 80, even 90 percent — certainly over 30.

Seventy percent isn't even legal anymore, is it?

The scales are still very different. We issue credit cards to people who use the credit portion temporarily. It's not meant for someone to get stuck with forever. It's for smoothing out and better managing a household's cash flow over a month or a quarter. We don't expect people to be paying that interest rate over a long period of time.

What's the credit card interest rate at your parent bank in Sweden? It's certainly not 18 percent.

I can't comment on that. But if the point is whether banks' fees and interest rates are fair, then I think in Estonia we'll likely return to that discussion again. Competition is working well here, so the comparison isn't entirely accurate.

True, there are quite a few banks here. SEB is, I believe, the second-largest bank in Estonia in terms of both loans and deposits.

Precisely.

But when I look at banks' profits both this year and last, it seems that holding a banking license in Estonia basically amounts to a permit to print money. All the major banks posted profits in the hundreds of millions last year, and this year the total will likely be somewhere around half a billion. Am I wrong?

I think banks' profitability should be assessed over a longer period. Entering the banking sector comes with very high barriers. And on the other hand, if we look at the profitability and return on capital in Estonian banking over the long term, it's actually lower than the average return on capital of Estonian companies.

So banking in Estonia has certainly not been the most profitable business over the long run.

If you include the years 2008–2011 in that period, then of course the number comes down.

But you need to include them.

I agree.

You cannot look at it just over a year or two.

You're saying that the fact banks get hit very hard during crises, but then earn large profits in good times — that's simply the normal pattern?

Just like in any business — you have to build up buffers in good times to weather the tougher ones.

You mentioned the high barriers to entry in the banking market. If it were easier to get a banking license in Estonia or the Baltics, would your competitor Swedbank still be able to make several hundred million in net profit here each year?

I think banking and the financial market as a whole are changing. We've gained new competitors from outside traditional banking.

But what kind of competitor is Revolut really for you? I'm not an SEB client, I use Revolut, but compared with what a regular large Estonian bank offers, their services are very limited. In fact, they're not really competing directly, are they?

But in terms of certain products and services, they definitely are competing, and they've been steadily expanding their portfolio.

I'd argue with that. One area where Revolut does compete on the Estonian market is credit cards — you can just put a credit card on your phone and pay, as long as you've got money in the account on the due date. A couple of days ago, I saw that Swedbank, Estonia's largest bank, decided it could significantly raise its monthly credit card fees. The numbers are small — say, from €10 to €17 or from €1.50 to €2.00 — but in percentage terms, with 100,000 clients, that's still a lot of money. If Revolut were really hurting them, they wouldn't be able to do things like that, would they?

I can't comment on that.

But Revolut is taking some of your clients too, isn't it?

We certainly can't ignore the new players and keep a very close eye on what they're doing.

I'll say again that competition between banks in Estonia works very well. If we look back a little, what has disappeared? Essentially, securities transaction fees are gone. Day-to-day banking transfer and settlement fees are gone. We spoke about credit card interest, but if we look at where mortgage interest rates are...

Compared with 2007, they're actually quite high.

If we compare with where they've come from — say, from 2 or 2.2 percent — then today the average rate is around 1.5. And if you have an energy-efficient home, some market players are even offering loan rates of zero point...

Someone must be covering that interest difference, right?

Once again, I think competition is quite active and effective, with banks operating in fairly different niches and profiles.

There are the large Scandinavian banks with international reach, like us, and there are locally owned banks with varying levels of risk appetite and ambition.

So yes, there is competition. And if we add to that the external so-called "new world" financial institutions, which include companies like Revolut, then I'd say the competitive landscape is quite diverse.

At the same time, no entirely new bank has really entered the market. The ones you probably meant as domestic banks — LHV and Coop Pank — have both held banking licenses for decades already. The risks in banking seem fairly small to me anyway, since the sector is so heavily regulated. Isn't the barrier to entry too high?

On the contrary. One of the problems traditional banking faces today is precisely that our sector is heavily overregulated.

But that also reduces your risks.

Our clients feel that overregulation as well.

It increases your costs, but reduces risks.

It increases costs, and if we look at the capital buffers or reporting requirements expected of us...

Over the long term, it raises questions for banks' investors and shareholders about just how profitable this business really is.

Did you go see the play "Rahamaa"?

Unfortunately, I haven't had the chance.

That's a pity — I really enjoyed it. The play painted a different picture of Estonia's money laundering crisis and Estonian banks than the impression many people had. It wasn't exactly the case that some evil Estonian bankers were laundering massive amounts of money in ways that couldn't stand up to any ethical or legal scrutiny. But anyway, you haven't seen the play.

Still, the issue of money laundering is certainly familiar to you. You have to thoroughly vet all clients, some you can't accept at all, and you have to review every transaction. You have hundreds of employees working solely on this. You see all of that firsthand.

Certainly. It has been, and still is, a very sharp focus for all banks.

In addition to combating money laundering, another major challenge for banks and the financial system today is international sanctions and compliance with them. At the moment, that issue is even more relevant.

As for past money laundering scandals and that whole topic, I'd say it has largely been weeded out of banks' loan portfolios today. The framework is now built on a very different basis. But when it comes to international sanctions — I couldn't tell you off the top of my head which package we're on now, since a new one is always being discussed — the banks have been given a very significant role and responsibility there as well.

How long have you been in banking?

Since 1995.

Thirty years. You must know that period very well, when banking in Estonia and the Baltics was exceptionally free. Both bank leaders and shareholders looked at it as: we'll take in anyone's money and use it to generate returns for the owners. Did they do anything fundamentally wrong? Did they do anything morally wrong when, for example, they accepted money from Uzbekistan, Azerbaijan or Russia?

To ask it that way today...

I'm not even sure it's the right question.

I think it is the right question, because we do judge people today by the standards of things they did back in 1998.

But is it right to look at it that way?

That's the way the question is being asked.

I think all entrepreneurs and banks have acted according to the norms in force at the time. They tried to comply with the laws as fully as possible at that moment. Remember, Russia was at one point even on the verge of joining the WTO. If we look at this 30-year period, it's been very different and has changed very quickly.

As for the regulations we follow today — all the money laundering laws and related rules — that legislative framework only began to emerge around 2005. So when we look at the past through today's standards, it's always very complicated.

I agree. But haven't we now clearly gone too far?

We already have several examples that raise a whole series of questions for many ordinary bank clients. The Financial Intelligence Unit has managed to push through the Riigikogu a law that ties together, I believe, 11 different state databases into a single package for anonymized data mining. But if patterns are found, it can then be de-anonymized and banks' clients can be confronted with very tough questions about whether they're involved in some kind of violation or money laundering.

The president has refused to promulgate the law, I think with quite understandable arguments. But what's your view — does banking secrecy even exist today, even in a limited form? And should it exist?

Certainly. I believe banking secrecy is the foundation — the alpha and omega — of our business.

At the same time, I think every good country must have built-in control mechanisms to ensure that in our naïveté we don't end up giving away the freedoms we take for granted, including banking secrecy.

Those freedoms have already been given away.

I think what the chancellor of justice has pointed out — raising these questions — is absolutely the right thing to do.

Why didn't you lament it yourself when you were told — I'm not even sure by whom, whether it was the Tax Board, the police or the Financial Intelligence Unit — that they were going to create this kind of data-exchange system where officials from different state agencies could come and look at accounts, without you even having a record of it?

I'd take two steps back. What kind of environment are we operating in today? It's the digital, high-speed internet age. And if we look at how financial crime oversight is carried out, then in virtually all developed countries, organizations similar to the Financial Intelligence Unit are granted the right to make inquiries to financial institutions when there's justified suspicion.

That's not what the chancellor of justice really disputed. The chancellor's concern was mainly about the channel and the form in which oversight bodies have the right and ability to make such inquiries. In this respect, it's a bit of an administrative error on the state's part — some issues have been left unregulated and there's no legal clarity about which inquiries the Financial Intelligence Unit can make through which channels. I think the state needs to clear up that confusion and establish legal certainty.

But if the question is whether banking secrecy is sacred for us, then of course it is. If it is whether state supervisory bodies or certain authorities should have the right to make inquiries when there is justified and reasonable suspicion, then my answer is also yes.

Shouldn't you have some role in reviewing the inquiries — where you can say this one is justified but that one is not? Because right now, you don't have that role anymore.

We don't have that role or responsibility. But should we be the ones assessing them, should we take over the functions of the Financial Intelligence Unit...

No, you shouldn't.

Should we adopt the role of the Tax and Customs Board?

No.

We have assumed quite a few roles as is.

In the end, you're there for your clients.

Yes, but if that were the case, we would have to start investigating things. Investigations should be up to the state. But the state also needs to create trust.

I spoke with people at the Prosecutor's Office. They haven't seen this data-exchange system either — and I assume you haven't seen it yourself. I asked them what it looks like. Apparently, it works like this: you enter a person's or a company's name and add a criminal case number, and the person and the case don't even have to be connected. So essentially, I could enter your name along with some random criminal case number — so long as that case exists — and the bank would automatically give me your account statement.

As I said, in a well-functioning country there are built-in control mechanisms. Just as there are in any business.

Right now, they clearly aren't there.

In every business, there are built-in control mechanisms. At our bank, we have a three-tiered system — three lines of defense.

At a bank, somebody can't just randomly go and look at my account. At least, I hope not.

We have a three-lines-of-defense system: the business unit, compliance and internal audit, which reports directly to the owner. That gives the owner confidence that the company's management is operating within the established legal norms and expectations. The state side should work the same way.

That framework needs to be in place so that the key institutions and supervisory bodies also have independent oversight — ensuring that the inquiries made, regardless of the channel, are justified. It shouldn't be as you described, where you just enter two numbers and a name and off it goes. Before anyone has the right to enter that data, the inquiry must be properly justified.

Still, it seems to me that you could also exercise some due diligence on behalf of the client — but let's leave that aside.

We talked about competition between banks and a foreign bank's name came up — one that offers a very limited range of services. You said it's already clear they're gaining clients in Estonia. And indeed, in my own circle of friends — which may not be very representative — several people are using that bank. Do you know what they all tell me as the reason? That no Estonian authority can make those kinds of inquiries there. That's a very significant competitive advantage.

Let's put it this way: 99.9 percent of our clients are law-abiding and don't worry about that. If you're a law-abiding citizen, then...

I definitely don't agree with the idea that "an honest person has nothing to fear." I consider myself an entirely honest person, but I grew up during Soviet rule and fear that officials or politicians might abuse their power.

That's precisely why the state must ensure that officials have no possibility to abuse their power.

The simplest way to ensure that is by not giving officials access at all.

Let's talk about trust. Trust is, of course, central in banking — if a client doesn't trust the bank, then the bank has no business.

But trust is also a broader issue. You said earlier that people seem to trust the state — maybe not the government, but certainly the state. I agree, because how else can we explain the fact that there hasn't been a major wave of emigration, despite high inflation and low economic growth? Thousands of people are still taking out loans or using their savings to buy real estate here, tying their lives to Estonia in a very long-term way, despite all the risks.

At the same time, some of that trust has still been lost. It may be partly because people feel that their concerns — about rising prices, low wages, limited social mobility or a lack of holistic economic development — aren't being clearly acknowledged by the state or politicians. How do you see it — is trust an issue in Estonia and how much of it is tied to the economy?

Once again, the fact that people are taking out loans and companies are investing again — we touched on the rapid growth of household borrowing and people's strong willingness to take on loans, and we see the same thing on the corporate side. If we look at projects underway, there are 50 percent more than a year ago. And it's broad-based. It's not just retail or working-capital financing driven by higher prices.

In the first half of the year, the biggest growth among small and medium-sized businesses has been in industry, real estate and agriculture. And what's encouraging is that the IT sector, which for a while seemed to be struggling, has also started borrowing again. So it's relatively broad-based.

Another sign of trust in the state and in the region where we operate is that we're seeing quite a lot of mergers and acquisitions among larger companies.

And the buyers are mainly Estonians?

Yes.

And the sellers are foreigners.

That has changed somewhat — we're also seeing the return of foreign investors. But yes, if we look at transactions over the past 12 months, the sellers have mostly been foreign investors and locals have been the buyers.

That, of course, confirms Estonians' trust.

Yes, it shows trust.

We talk about the will to defend the country and the need for defense investments — I think everyone agrees on that. And the state has already taken concrete steps, which now must be carried out and financed. Loans will have to be taken partly to cover it, but all this shows that trust has not disappeared, despite geopolitical tensions and despite the fact that we are neighbors with Russia, which has been at war in Ukraine for nearly three years.

Yes, there has been a lot of uncertainty, but I think overall trust has been preserved.

Borrowing by the state. Estonia's debt burden is extraordinarily low, both by global and European standards. Do you think borrowing for defense spending — because it's hard to call it an investment — is justified?

To borrow now?

Next year we'll be taking out about €3.5 billion in loans to finance our defense budget. Do you think that's the right step?

If the money goes where it should — strengthening our defense capabilities — then it's certainly the right step.

The question is whether we really need to take the full €3.5 billion or whether — something that's already being hinted at — tax revenues might turn out stronger than expected, making it unnecessary to borrow that much or implement all the planned tax hikes. But be that as it may, borrowing to strengthen defense is justified.

Are there any other areas where the Estonian state should borrow?

I can tell you what it must not borrow for. It must not borrow to cover ongoing expenses.

But it already does.

That's something the state should try to avoid...

The gap between state budget revenues and expenditures is in the ballpark of €2 billion every year and we already finance that with borrowing.

Partly, yes. But again, I think what must be avoided, what requires great caution, is borrowing to cover current spending.

I'm glad I don't have to make political decisions about which taxes to raise or lower. But if I could give one suggestion, one thought, it would be this: the automatic indexation of various costs — in my view, as someone looking from a business perspective — that's very difficult and burdensome.

When you plan costs for the next year, you also look at your expected revenues, because in the long run, it's impossible to live beyond your means. What I expect from statesmen is a balanced solution.

But if you look at which expenses in the state budget are indexed, for example to inflation or something similar, they're mostly social spending.

Not only.

Still, mostly. If we look in financial terms, the largest part of that is pensions. And just imagine how hard it is for politicians to say that next year pensions won't go up the way they have for the past 20 years. That too is a question of trust.

The state should take a longer view here. We've discussed at length and at one point went down the road of dismantling the pension system—"money is free, everyone decides for themselves what to do with it." But as it turned out, it was simply spent in most cases.

Instead of dismantling, we should look at how to strengthen the system and people's sense of social security for the future. One example is employer-funded pensions. Why hasn't that taken off? From my perspective, it's hard to say.

The state probably thinks that yes, in the short term it could mean somewhat lower tax revenue growth. But if we look at developed societies, employer pensions are one of the pillars we currently lack.

That's a small thing, you can't even call it a major reform if it happens.

I think in the long term it's a very important reform. If we look at Sweden, for instance, employer pensions make up one-third of a person's future retirement income. The question is, what perspective are we taking? If we look at the burden on every taxpayer today, it's only growing. Our demographic trend is worrying.

If you look at this not as a bank head — since employer pensions would obviously also be good for you from a business perspective — but as someone who, thanks to your position, has a broad overview of Estonia's economy, maybe you can offer a major goal we should have. I personally can't describe any such goal right now that either society or politicians have set. Where should we be heading, what should we be doing, what should be the thing we're striving for?

I think first we should look at what we're doing well and aim to preserve those strengths.

What do we have going for us? We can say that although we're a small nation, we're an educated one. If we think about where the country should be aiming, perhaps AI could be Estonia's Nokia. We don't have major natural resources or a large population, but we do have a relatively well-educated people. More effective application of AI — if we can cultivate that in our education system and economy — could give an extra lever to Estonia's future outlook, making it possible for a small nation to achieve big things.

The real question is: where should we be investing? We need to ensure that both local entrepreneurs and foreign investors find it good to operate in Estonia, that we maintain a predictable economic environment and a stable tax system, so that people still want to come here, set up businesses here, keep them here and grow them here. First we must get the fundamentals right, and then we can start thinking about bigger things.

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