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estonia

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ESTONIA


 

REPUBLICAN REFERENCE

Area (sq.km) 
45,227 

Population
1,423,316

Principal 
ethnic groups 
Estonians 63.9%
Russians 29%
Ukrainians 2.7%

Capital 
Tallinn

Currency 
Kroon

President 
Arnold Rüütel

  

Background:
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 Western Europe. 

Update No: 271 - (24/07/03)

Estonia takes stock of EU
On September 14th the Estonians are voting in a referendum on EU membership. The result is scarcely in doubt. As the northernmost of the Baltic states just opposite to Finland across the Gulf of Finland, it feels itself to be part of Scandinavia and so of Western Europe.
The Estonians have a new premier in Juhan Parts, with a new coalition government as of April. But changes in government are frequent in Tallinn and have less meaning than elsewhere; given Croatians of rather like-minded small parties, there have been more than a dozen since independence in 1991.

Eurozone membership in view
Estonia was the first FSU republic to adopt its own independent currency in June 1992, the koruna, which has been a huge success. Managed under a currency board system, such as Hong Kong's, it has been run in effect by the independent central bank with strong advice from the Germans, the old Bundesbank.
It is logical that the Estonians should now look to join Euroland as soon as possible after EU entry in May next year. Estonia may adopt the Euro currency in 2006, two years after it joins the European Union, Bank of Estonia President, Vahur Kraft said at a press conference. This will be the optimum choice for us, he said. Delays in introducing the Euro in Estonia's may be caused by changes to EU policy or delays in Estonia's implementation of the Maastricht Treaty. For timely accession to the Eurozone, Estonia needs to continue a balanced budget policy and try to lower its current account deficit.

All parties urge pro-EU membership vote in referendum
There is a remarkable unanimity in Estonian politics about the coming referendum on EU membership; all parties are in favour. Estonian President, Arnold Ruutel, parliamentary Chairman, Ene Ergma and Prime Minister, Juhan Parts, circulated a joint statement urging citizens to vote for Estonia's membership in the European Union during the September 14 referendum. "Estonia was, is and will be part of Europe. In the European Union we will remain independent and preserve our language and culture. Membership in the EU opens up new prospects for economic development," the statement said. "If we do not join the EU our economy will stagnate, a security vacuum will form and the level of Estonian culture will go down," the leaders said.
The ethnic Russians in Estonia are generally as pro-EU as the rest of the population, eager to benefit from unrestricted access to Western Europe. A problem is that 170,000 out of 240,000 of them are still without full citizenship. But the integration of young ethnic Russians is proceeding apace and it is only a matter of time before they all see themselves as citizens of Estonia and the EU first, and as descendants of Russian forebears second. On another level, it is a means of Russian owned businesses getting access to the EU on different and better terms.

Moves to elect president directly
The presidency is an august post in Estonia, previously held by the most distinguished of Estonian dissidents in Soviet times, Lennart Meri, and now by Arnold Ruutel, a former premier. But so far the occupant has not been elected directly by the people.
The council of the Estonian ruling coalition of Res Publica, the Reform Party, and the People's Union agreed to suggest amendments to the constitution that would provide for direct popular elections of the country's president. Parliament Constitutional Affairs Committee Chairman, Urmas Reinsalu, said the proposed amendments would provide for the election of the president by direct popular vote for a term of six years without the possibility of re-election instead of the current system, under which the president is elected by the parliament or a special electoral assembly for a term of five years with the possibility of serving a second term.

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EU ACCESSION

Estonian's called upon to vote in referendum


Estonia's Centre Party recently called on people to participate in the referendum on September 14th to decide whether or not their country should join the European Union (EU). 
The call was contained in a statement issued after Chairman of the Centre Party, Edgar Savisaar, and his supporters had blocked an attempt by the pro-EU wing of the party to adopt a statement supporting Estonia's EU membership, 'Postimees' and 'Eesti Paevalht,' two leading Estonian newspapers, reported. 
The statement was adopted after hours of heated debates in Kanepi, southern Estonia, in which 70 leading members of the Centre Party and numerous guests heard Savisaar's thorough analysis of the pro and con of Estonia's EU membership. 
"We wanted to give a signal to people that nothing has been decided until they decide," said Evelyn Sepp, PR manager of the Centre Party. 
Savisaar expressed no clear stand on Estonia's EU membership in his address to party members. Among the positive aspects of joining the EU, Savisaar pointed out that it would be easier to introduce globalisation and gradual income tax in the country after it joins the EU. 
On the negative side, Savisaar stressed that Estonia is actually not welcome in the EU and that the future of the EU is unclear. The Centre Party is the only major political force in Estonia that has not yet taken a clear stand on Estonia's EU membership. 
Estonia, along with nine other central and east European states, has been invited to join the EU in 2004. Enditem

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FINANCIAL NEWS

Inflation in Estonia falls to record low

Inflation rose 0.3% in the year to June, statistics office data showed. This is the lowest annual inflation rate since Estonia regained independence in 1991. Month-on-month deflation was 0.4%, marking the third consecutive month of deflation, with the greatest price decreased being for fuel and foodstuffs. There were also drops in the prices of household goods and communication services. Adres Saarniit said that food prices were lower because prices were unusually high last June and because demand was low throughout Europe, RFE/RL reported.

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TOURISM

SOK acquires operations of Viru Hotel in Tallinn

The business operations of the Viru Hotel in Tallinn, which is the largest hotel in the Baltic states and a landmark of the Estonian capital, will be acquired by SOK, reports New Europe. 
SOK is the central organisation of the S-Group, which runs supermarket chains Prisma, Alepa and S-Market in Finland. Sokos hotels are also part of the group, and Viru will now become the first foreign hotel in the chain. SOK will take over the operations of the Viru Hotel in September. The property itself will not be sold, so Sokos Hotel Viru will officially be a tenant. "The deal was supposed to take place in 1994, and then about every two years thereafter," recalls Yrjo Vanhanen, who has headed Viru for nine years. According to Matti Pulkki, the head of SOK's hotel and restaurant business, the drawings for a new Sokos hotel in Tallinn had already been completed, but the well-established operations of Viru were deemed a better alternative. "Viru is in good shape, and it is a well-known landmark. The hotel is well managed, the staff is highly skilled, local relations are in good shape, and a large expansion is on the way," Pulkki said. Vanhanen revealed that many other interested buyers had contacted the hotel as well. 
Viru has over 400 rooms, and around one hundred more should be added in spring 2004. A conference centre that can host nearly 1,000 guests will be opened in autumn this year. Work on a new restaurant is also close to completion. SOK said the number of business and conference travellers should grow in Estonia after it joins the EU in May next year. Pulkki commented that after Viru has been fully integrated in the group, SOK would seek other expansion options in the hotel business of the Baltic region. SOK already runs Prisma supermarkets and car dealerships in the Baltics.

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