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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

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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: 264 - (01/01/03)

Estonia is due to become a member of both the EU and NATO in the same year, 2004, when it becomes what it now terms as 'Euro-Atlantic.' This is likely to be seen as an historic date when Estonia definitively puts its subjugation within the USSR behind it.

Heritage of autonomy
In fact the small Baltic country with a lake-strewn plain and many forests was never a natural territory for communism, having much of the terrain that made Holland a pioneer of both Protestantism and capitalism. Estonia espoused the Reformation in the late 1520s even earlier than Holland and, with a long tutelage under Teutonic overlords and knights, was part of the Hanseatic League in the case of its main ports, above all Tallinn, its capital. Russian rule from 1721 onwards was deeply resented, while after the brief experience of independence in 1920-40, Soviet rule was roundly detested.
Independence in 1991 led swiftly to a redirection towards the West. By June 1992, Estonia had a currency board system, as in Hong Kong, and an independent currency, the kroon, linked to the DM (today the Euro) under strong German tutelage once again.

EU jitters
But neither is Estonia such a natural for the state-dominant version of capitalism peddled by Brussels. As membership of the EU nears, the population is nervous of what is entailed. They are apprehensive that however benignly in intent their independence and the freedom of manoeuvre of their farmers and business folk, so recently won, are once more to be curtailed in the thrall of outsiders. This is doubtless why only 39% are in favour of Estonia entering the EU, according to recent polls. The mood may and almost certainly will change, but at present national sentiment is opposed.
Brussels has tried to mollify Estonian susceptibilities. It granted concessions in labyrinthine negotiations, taking account of Estonia's traditional pastimes. Estonian hunters will still be allowed to shoot lynx, and occasionally bears, for a transition period of five years. 
The rural population of farmers is smaller than in the other Baltic states, making up 7% of the total. But even its townsfolk like to go hunting in the forests. Five years' grace is not enough for many hunters. Estonia will join the EU all the same. Too much is at stake in defining a new European identity for the Estonians for them to refuse.

Happier with NATO
NATO membership is almost wholly good news as far as Estonians are concerned. NATO is the real guarantor of their independence. Premier Siim Kalles has pledged total support to the US in event of a military action against Iraq, the use of its airfields or whatever.
The real point is that NATO makes Estonia truly Euro-Atlantic, just what it has always aspired to be, with its own Protestantism and independence of spirit.

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FOREIGN LOANS 

Estonia looks forward to 10bn kroons as EU aid in 2004-06


A total of 10bn kroons will arrive in Estonia from the EU in 2004-06, Renaldo Mandmets, deputy chancellor at the Ministry of Finance, has said. According to Mandmets, these are aid funds that will definitely arrive. They have been calculated at the 1999 prices, Aripaev web site has reported. "As to the amount, the talks have in essence been completed," the deputy chancellor, in charge of foreign relations at the Ministry of Finance, said. "It means over 3.3bn kroons per annum, which will amount to about 10 per cent of the Estonian state budget and a major part of investment."
Mandmets said this aid offer to Estonia was better than the one made to a number of other countries. There will be 2,500 kroons of aid arriving per head of population a year. At the same time, the amount is limited by EU regulations, in line with which the budget for [aid] funds must not exceed 4 per cent of GDP. "We are close to the limit," Mandmets said. He said that Estonia's own part in the funding arrangement might amount to a problem. "There are funds for this, but not necessarily in the right budget box for our use."
With the funds, investment in vocational training will increase four or fivefold and threefold in environmental projects.
Mandmets said that Estonia was one of the best recipients of PHARE [Poland and Hungary Action for Restructuring the Economy] and SAPARD [Special Accession Programme for Agriculture and Rural Development] funds while with ISPA [Instrument for Structural Policies for Pre-Accession] it was seriously lagging behind on environmental issues.

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MINERALS & METALS

EU quotas said to undermine Estonian metalworkers' competitiveness

If cheap metal from the east were to disappear as a result of Estonian accession to the EU, this may directly or indirectly put up the costs of thousands of Estonian metalworking firms or reduce their competitiveness, Aripaev web site, has reported.
The Estonian machine building, metal and apparatus industries are threatened with a considerable price rise because of the raw material they use and the quota policy of the EU. "The price of sheet metal from Russia is 30-40 per cent or even more down on what we could buy from Scandinavia," Jaak Sulg, a member of the Viljandi Metall joint-stock company board, said. "At the same time, the quality of Russian steel has been satisfactory to us and to our customers."...
Pressure to change over to the more expensive EU metal comes from the fact that once Estonia joins the EU its imports from non-EU countries will come under the quota system. At the moment, for example, the permitted quota for CIS countries is just 0.5 per cent and the Estonian annual steel requirement amounts to 300,000 tonnes. At the same time, Estonia must harmonize its customs tariffs for third countries with the EU ones and adopt EU standards.
Viktor Levada, the owner of the Levadia cooperative, one of the biggest Estonian metal traders, which has 4,500 customers and a turnover of 0.5bn kroons, said that for the time being there was no solution to the quota issue. "What makes me wonder is the passivity of the state of Estonia," he said. "It seems that the metal issue attracts significantly less attention than meat and milk production or fishing whose share of GDP is considerably smaller than that of metalworking."...
Metal imports from CIS countries account at present for a substantial part of Estonian metal imports. Last year the Russian share alone was 38.3 per cent, in monetary calculation. "The cost of raw materials accounts for a third or even nearly a half of all production costs in Estonian machine building," Juri Riives, chairman of the Machine Building Union, said...
Jaak Sulg said that a major part of the Estonian metal industry was oriented towards subcontracting and if raw materials were to become more expensive this would affect its prospects considerably. "It is not ruled out that subcontracting will go elsewhere where the resources are cheap," he said. "To Russia, for example, where the potential is considerable." 
At the same time, there are firms in Estonia who even now buy their raw materials from the West...

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TELECOMUNICATIONS

Vodafone in partnership with Radiolinja Eesti

Vodafone Group Plc said it had signed a partner agreement with Radiolinja Eesti As (RLE), the Estonian subsidiary of Finland's mobile operator Oy radiolilnja Ab, AFX News Agency has reported. 
The deal extends the existing relationship between Vodafone and Radiolinja in Finland, to the Estonian market. The dual Radiolinja Vodafone brand, already launched in Finland, will be used by RLE to market Vodafone's global services to its international travellers and corporate customers in Estonia. The first services to be implemented by RLE include Eurocall, Assisted Roaming, Virtual Home Environment, GPRS Roaming and inbound roaming for Vodafone's pre-paid customers travelling in Estonia.

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