OREANDA-NEWS. December 09, 2011. At a ceremony in Freiburg, Estonian Prime Minister Andrus Ansip and Latvian Prime Minister Valdis Dombrovskis were awarded the renowned international prize of the Friedrich August von Hayek Foundation for implementing liberal economic policy.

The Estonian head of government said in his acceptance speech that the prize was a testament to the Estonian people, who have played the most important part in the success story that is their country. “The Estonian government has been able to cope relatively successfully with the European debt crisis of the past years only with support of our citizens,” said Ansip, who said only this precondition has made it possible to practice liberal economic policy in the most recent crisis years and the previous, economically better years. The head of government’s remarks were greeted by a round of applause.

Ansip said Estonia’s liberal economic policy meant lack of tariffs, non-existence of noteworthy subsidies and finally, the fact that the country was able to amass sufficient reserves and refrain from living in debt. “That is why part of the recognition given to me today belongs to my predecessors, the last Estonian prime ministers,” said Ansip, naming two former heads of government – the current vice president of the European Commission Siim Kallas and two-time prime minister and current Minister of Defence Mart Laar.

Ansip said Estonia embarked on the road to a liberal market economy in 1992 with its monetary reform, when the Estonian kroon was introduced at a rate pegged to the German mark. “Symbolic meaning can be ascribed to the fact that monetary reform was carried out on 20 June – the same day on which the German mark was adopted back in 1948,” said Ansip in his remarks and added that the Estonian currency remained at an unchanged exchange rate until 1 January 2011, when the euro was introduced at the same rate.

The head of government said Estonia’s economic policy is founded on the same worldview championed in its purest form by Friedrich August von Hayek. “And that is so-called common sense policy,” he said.

“One must always be prepared to make unpopular decisions. One should understand that money does not allow itself to be played with. We can permit this only what we have truly created. That means following the principle of a balanced budget,” said Ansip. He said that living off of future income inevitably meant shifting the burden of repayment on to the shoulders of our children and grandchildren. “We are inevitably debtors to our parents, but we must not become debtors to our children. We have understood this,” Ansip said in accepting the prize.

At the end of his remarks, Ansip expressed gratitude and satisfaction that the award had been given simultaneously to both him and his Latvian counterpart. “This shows the common future perspective in our region, our similar view of the possibilities for surmounting the crisis, even the fact that the friendly sense of solidarity has been noted from outside,” said Ansip.

Latvian Prime Minister Valdis Dombrovskis said that paradoxically Latvia’s problems began when the country joined the European Union and NATO, which caused a wave of optimism that was in fact out of proportion. We had the feeling that now nothing bad could happen to us,” Dombrovskis recalled.

The award was bestowed on the Estonian and Latvian prime ministers by the former President of Germany, Roman Herzog.

Previous winners of the international prize have all been among the world top calibre – for instance, Margaret Thatcher, who supported free enterprise and followed a strict financial policy as prime minister, and German economist professor Otmar Issing, who was on the boards of the German and European Central Bank. In 2005, the Hayek Prize went to the current Italian prime minister and former European Commissioner Mario Monti. The Foundation’s first prize in 2001 went to the Polish economist, professor Leszek Balcerowicz, in 2001, a key figure in Poland’s economic reforms of the early 1990s. Balcerowicz also served as the head of the Polish central Bank and deputy prime minister. Professors Issing and Balcerowicz are today members of the Foundation council and also delivered remarks at formal ceremony.

The Friedrich August von Hayek Foundation was established in 1999 to mark Hayek’s birth centennial. The aim of the Freiburg-based Foundation is to support the liberal philosophies espoused by Hayek both domestically and internationally. Every year, the Foundation awards 1-2 international prizes and one publishing prize.

Friedrich August von Hayek was the author of The Road to Serfdom and The Fatal Conceit, both of which have been translated into Estonian.