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After centuries of Swedish and Russian rule, Estonia attained independence in 1918. Forcibly incorporated into the USSR in 1940, it regained its freedom in
1991 with the collapse of the Soviet Union. Since the last Russian troops left in 1994, Estonia has been free to promote economic and political ties with
Update No: 257 - (30/05/02)
Estonia is preparing itself for early EU entry. It has the best qualifications for EU membership of any former Soviet republic, precisely because it does not
resemble one any more, being a Scandinavian country in all but geographical exactitude. It has a language akin to Finnish, faces Finland across the narrow
Gulf of Finland, and has a Protestant faith and a strong memory of its heritage as the northern extension of the Hanseatic League, linking ports across the
Baltic and the North Sea in the medieval epoch and early modern times.
Estonia is also keen to join NATO, which it most assuredly will in the aftermath of 9:11, being a member of the Vilnius 10 (see Lithuania). But economics is
the prime area of prowess for the Estonians, and here they are doing very well.
A buoyant economy
After growing consistently by five per cent or so annually in the 1990s Estonia's GDP rose by 6.9% in 2000 and 5.4% in 2001 and is expected to grow by 4% in
2002, still a good result given the general gloom and depression in the EU, with which more than 70% of its trade is now done. FDI is coming in at a rate of
over US$300m per annum, that is US$150 per capita, which is equivalent to US$30bn for a country the size of Russia. In fact its attraction of such sums of
FDI, well over US$2bn accumulatively, puts it not far behind Hungary and the Czech Republic among post-communist states on a per capita basis.
New government wants parliament, not a referendum, to decide on EU entry terms
Since the beginning of the year, Estonia has had a new government, under the young, but veteran politician Siim Kallas, who has been premier beforehand.
It is often said that it does not much matter who is in office in Estonia since all the main parties have the same agenda and menu of policies. Maybe they
do. But they do not always share the same idea of how to implement them.
Kallas, for instance, has a quite different notion of EU entry than his predecessors. Instead of a referendum, he wants parliament to decide the issue and
the terms of entry, which would then inevitably become a compromise between the view of different parties. Under a referendum the government would be just
rubberstamping the people's views. He is in favour of a representative, rather than a plebiscitary democracy.
Estonia increases farm subsidies with European help
The Estonian state will pay 687.2m kroons in support to agriculture and rural life this year, the Agriculture Ministry said on 30th April, ETA News Agency
has reported. The support amounts surged by 71.7 per cent from the 287m kroons last year and that mostly on account of the planned SAPARD [Special Accession
Programme for Agriculture and Rural Development] support, an Agriculture Ministry spokesman told ETA.
The number of different types of support will not increase this year but the amounts to support young cattle and beef cattle and certified seed growing will
increase. The ministry also wants to boost the amounts for environmental support. The ministry said that next year the support amounts were expected to
increase further as SAPARD resources would be used even more actively than this year.
Estonian company to extend helicopter services to Russia
Copterline, the company maintaining a helicopter connection between Tallinn and Helsinki, plans to open a similar connection to St Petersburg and will buy a
250m-kroon helicopter for the purpose, the 'Eesti Paevaleht' daily reported.
"There are 5m people living in St Petersburg and 2m tourists visit the city a day," Tonis Lepp, member of OU Copterline Estonia's board, said. He said that
the flights to St Petersburg would be launched this year but at present it was not yet clear which routes in the triangle Tallinn-St Petersburg-Helsinki the
company would choose... In connection with opening the new route, Copterline plans to buy a large 24-seat helicopter the price of which might reach 250m
kroons, Lepp said...
Estonia must build nuclear power plant because of EU directive
In five years' time, Estonian Energy [Eesti Energia] will no longer be able to satisfy Estonian energy needs and for this reason Estonia must start to plan
for a nuclear power station as early as this year. Otherwise, Estonia will lose its independent electricity supply from 2015, Aripaev web site has reported.
The building of a nuclear power station in Estonia is inevitable, politicians, scientists and heads of enterprises say today. The voice of opponents of
nuclear power is as yet uncertain, since this course of events is seen as incredible.
Because of the EU environmental directive 2001/80/EN of last October, Narva power plants will not be able to meet the capacity required for domestic
electricity consumption as soon as 2008 and thereafter. With the energy blocks that fail to meet the environmental requirements, Estonia will be in a position
to produce a limited quantity of electricity only until the end of 2015, Valdur Lahtvee, the environmental affairs manager at Estonian Energy, says.
Estonian Energy's current investment plan envisages the renovation of two power blocks in Narva and so the average annual production of Narva power stations
would be 2,300 GWh from 2015. Over the past financial year, Estonian Energy's sales amounted to 5,948 GWh...
In addition to the forthcoming renovation of the two power blocks in Narva, the renovation of another 10 power blocks might cost nearly 25bn kroons and would
ensure independent electricity supply for Estonia. However, the EU is progressing along the path of constraining the use of combustion technologies and
pessimistic assessments suggest that Estonian oil-shale resources will continue for only 25 years.
With the present use, Estonia would have enough oil shale for at least 100 years, Alo Adamson, director of the mining institute at Tallinn Technical
University, says. Surprisingly, however, Adamson recognizes the inevitability of nuclear energy. "Changeover to nuclear energy is a reality and it is high
time we acknowledged this in Estonia," Adamson says. "We need not wait until the oil shale runs out to build a nuclear plant."
"I can see no alternative for Estonia but nuclear energy," Andres Lipstok, chairman of the Economic Affairs Commission in the Riigikogu [parliament] says...
"Nuclear energy is the least dangerous while being environmentally friendly," Mati Jostov, director-general of the Estonian Oil Shale joint stock company and
a member of the Centre Party, says. "We have oil-shale resources for 50 years, which is a sufficient period of time to clarify our need for a nuclear
Estonia should wait another 30 years, which is a likely period for some completely new and safe source of energy to be devised, Einari Kisel, head of the
energy section at the Ministry of Economics, says...
Estonian government allocates funds for job creation
The Estonian government on 30th April allocated 11m kroons from its reserve fund to the Social Ministry for a programme to boost employment. The ministry
originally asked for 18m kroons, saying that its existing budget could not guarantee an efficiently functioning labour market, ETA News Agency has
The programme will actively expand Estonia's labour market policies and includes an improvement to labour market services, special programmes for integrating
risk groups and raising administrative capacity. The priorities include young people, long-term unemployed and people with disabilities. Some parts of the
programme will be co-financed by [EU's] PHARE programme.
In 2000 and 2001 Estonia invested little in creating new jobs despite high unemployment. In both years the investment formed just 0.24 per cent of the gross
domestic product and even fell to 0.22 per cent of GDP in this year's budget. The Estonian government allocated 10.45m kroons for the programme last year. Of
this money, 2m kroons is unused thus far and therefore only 11m kroons was allocated this year.
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