Kaja Kallas had barely won re-election as Estonian premier in March before observers were already predicting that she would soon be picked to be Nato’s new secretary-general.

When questioned by Politico in late March, Kallas acknowledged that “the gossip is very interesting” but said that no-one had actually talked to her about the Western security alliance post and that it was “highly unlikely that I will be offered such a job”.

Being linked with the Nato job is par for the course for strong female Baltic politicians – as is being described as an “iron lady”  – but this time around the story might have more legs.

Estonia under Kallas has achieved a high profile for its firm stance on Russia’s aggression against Ukraine, a stance that the country has followed not just since Moscow’s occupation of Crimea in 2014 but since its invasion of Georgia in 2008 and even earlier.

Like the other Baltic states – which only won their independence from the Soviet Union in 1990 – Estonia has faced regular harassment since Vladimir Putin’s rise to power in 2000. A cyber attack in 2008 – seen as one of the first major instances of cyber warfare – encouraged Estonia to become a leader in cyber defence, and it now hosts CCDCOE, the Nato cyber defence centre of excellence.

The Baltic states were also among the first EU countries to prioritise reducing their dependence on Russian energy by establishing LNG terminals and building cross-border connections.

Under Kallas, Estonia has given the most aid to Ukraine in relation to GDP and has been a tireless advocate for more help to Kyiv and tougher sanctions on Moscow.

“Everything that is happening today in Ukraine is existential for us,” Mari-Liis Sulg, researcher at the Johan Skytte Institute of Political Studies at the University of Tartu, told a Talk Eastern Europe podcast in April. “We have been at the forefront of aid to Ukraine and punching above our weight.”

“Estonia has been for a long time among the 2% [of GDP] club,” points out Professor Andres Kasekamp, the Elmar Tampold Chair of Estonia Studies at the University of Toronto, referring to the country’s high defence spending. “Now it will go up to 3%.”

In the past Baltic candidates for secretary-general were routinely written off as “too hawkish”. Now there is widespread recognition that the Balts have been more realistic about Putin’s intentions than other Western states.

The West ignored the eastern member states’ calls for more Nato military deployments on the Eastern Flank, for arming Ukraine, and for wider and quicker Nato and EU enlargement, while Germany dismissed concerns that Russia’s Nord Stream gas pipelines would deepen Western dependence on Moscow for energy supplies.

The sea-change in perceptions since Putin's invasion makes it conceivable that a Baltic leader could succeed Secretary-General Jens Stoltenberg when his term expires at the end of September.

Kallas, as the most vocal and visible of the three Baltic PMs, would be the obvious choice. If she were picked, it would be a reflection both of Estonia’s leadership and her personal qualities, says Kasekamp. “It’s force of personality and preparedness,” he says. “She is very focused on messaging – she is well prepared, committed, very direct, simple, relatable.”

Kallas also has the advantages that she would be the first woman secretary-general and the first from a country that had been part of the Warsaw Pact. “It would be the biggest job any Estonian has ever had on the international stage,” Kasekamp points out.

“There is not a stronger candidate,” he says. “No-one ticks all the boxes like she does. If she does not get it, it shows that influential people in Western Europe still think she is too hawkish and think Russia should have a veto on who can be secretary-general.”

“She’s done really well,” agrees independent MP Raimond Kaljulaid. “It’s understandable that a large-scale war in the region will also create opportunities for regional leaders to become a voice on the international stage. I think Estonia has been a strong voice in support of Ukraine and in providing military assistance.”

The Estonian premier will now want to use her international profile to continue pushing for more aid for Ukraine and tougher sanctions on Moscow, as well as to block any negotiations with Putin that could lead to a face-saving peace settlement for the Russian dictator. Estonia is also looking for Nato’s summit in Vilnius in July to bolster its own defence as part of the alliance’s Eastern Flank.

“What Kallas needs – but what we are not going to get – is some strong commitment to the 2008 agreement on Nato membership for Ukraine,” says Kasekamp.

Rocky road

Kallas’ leadership during the war in Ukraine over the past 15 months has also won plaudits at home, resuscitating her career after what had been a rocky period since 2018, when she became leader of the Reform Party, founded by her father, former premier and European Commissioner Siim Kallas.

Though Kallas’ Reform was the largest party at the March 2019 election, the populist Centre Party chose to ally with the radical right-wing EKRE party in order to grab the prime minister’s post.

When this government collapsed, Kallas became the country’s first female premier in January 2021 in a troubled coalition with the Centre Party during the pandemic.

This all changed with the Russian invasion in February 2022.

“Although, as the prime minister, she was neither popular nor very skillful in managing the various domestic crises, like energy, the economy and COVID-19 just a year ago, she became very quickly a very popular politician because of the dramatically changing geopolitical context and the war,” Tonis Saarts,  Associate Professor of Comparative Politics at Tallinn University, told bne IntelliNews before the election.

Kallas used the outbreak of the Ukraine war to throw Centre out of the coalition last June – implying the ethnic Russian-backed party was untrustworthy because of its past affiliation with Putin’s United Russia party – and formed a new government with the Social Democrats and the right-wing Isamaa Party.

The general election in March 2023 came at the perfect time for Kallas. “There was a rallying round the flag and a boost to the government, which was on a wartime footing,” says Kasekamp. Both EKRE and the Centre Party – which had both been more ambivalent about the war – fell back, while Reform consolidated its position of being by far the largest party, with 37 seats.

The election gave Kallas a clear mandate as head of a much more cohesive three-party coalition with the Social Democrats and the new centrist Eesti 200 party. As well as having a solid majority of 60 in the 101-seat parliament, it is the most liberal government Estonia has had for many years.

The government has already decided to allow same-sex couples to marry, which would make Estonia only the second country in Central and Eastern Europe after Slovenia to permit it.

“EKRE will try to mobilise on this,” says Kasekamp. “I don’t think they will have much traction.”

The biggest challenge will be the budget. Estonia has traditionally followed a conservative fiscal policy but higher social spending from government measures to alleviate the energy crisis, together with boosted defence spending, will push the deficit up to a forecast 4.3% of GDP this year at a time when the economy is still stuck in recession and suffering one of the highest inflation rates in the EU.

The government now wants to cut the fiscal deficit to meet the Maastricht criteria of 3% of GDP next year, with Reform favouring spending cuts, while the Social Democrats prefer tax rises.

“We need a moratorium on state spending,” Kallas said last month. “That is the only way we can climb out of the hole. This also means looking some past decisions in the eye, which is another thing we must decide." 

Here Kallas’ perceived lack of empathy with common people could damage her, The current plans include increased VAT and income tax, but also tax cuts for high earners.

The tax plans have already pushed down the ratings of the newly victorious parties. Support for the Reform Party fell from 29% to 23% between March and April this year, according to an opinion poll last month, though Kallas herself remains consistently more popular than her party.

Whether or not Kallas stays as premier or moves to Nato, the government nevertheless should have plenty of time to turn the economy and budget around.

“They are starting by doing the tough things first and in four years they hope they will be in better shape,” says Kasekamp.