Republican Reference - Area (sq.km) 45,228 - Population 1,282,963 - Capital Kroon - Currency Lari - President Toomas Hendrik Ilves - Principal ethnic groups Estonians 67.9%, Russians 25.6%, Ukrainians 2.1%, Belarussian 1.3%, Finn 0.9%, Other 2.2%

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Key Economic Data 
 
  2009 2008 2007 Ranking(2009)
GDP
Millions of US $ 19,084 23,400 21,447 98
         
GNI per capita
 US $ 14,060 14,570 13,180 63
Ranking is given out of 213 nations - (data from the World Bank)

  

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. 
The referendum on EU entry was won by the pro-EU side quite comfortably, 66.9% to 33.1% against.
Nobody would dispute Estonia's excellent credentials to belong to Europe. Founded by the Teutonic Knights and the mercantile Hanseatic League in the early Middle Ages it was always looking across the sea rather than inland. Just across the Gulf of Finland, it is in all but name a Scandinavian country. It adhered to the Reformation before any other European state in the 1520s and has been a model of Nordic propriety ever since. The Protestant work-ethic is proverbial.
The very success of Estonia since independence outside not only the USSR, but also the EU, however, gave some Estonians second thoughts. The Centre Party, Estonia's largest opposition group urged the nation to vote against EU membership. They object strongly to the fact that the EU is requiring the Estonians to scrap a great deal of their free trade practices, adopted since 1991. It is as if they have to join a new USSR, which does not take account of their peculiarities.
It is arguable that the Estonians could have achieved all that they need from integration into Europe already without the drawbacks. Since independence they have done remarkably well. The Germans, their traditional allies, helped to set up the koruna, their new currency, in June 1992. They soon established a free trade regime second to none in the world. It was a question of a bonfire of controls. 
GDP leaped ahead at 5% rates of annual growth. The sagacity of the move to monetary independence was shown in 1998-99 when they were the one FSU state to survive the rouble crisis without much in the way of reverse.

Update No: 323 - (26/11/07)

There is no doubt that there is a Nordic communality of nations. They have a common past and they hope a common future. There is a common constant - fear of Russia.

Nordic and Baltic prime ministers meet in Oslo
The Estonian Prime Minister feels that everyone should be concerned about developments in Russia. "Naturally I am worried about the way things are developing in Russia. Only three years ago the state accounted for 50 per cent of the Russian national economy: now it is 70 per cent." Andrus Ansip said in the Norwegian capital Oslo, where the prime ministers of Estonia, Latvia, and Lithuania met on November 12, along with their colleagues from the five Nordic countries.

The leaders of the Baltic countries were nevertheless cautious in their statements on how the possible accession of President Putin to the post of Prime Minister after his presidency runs out might affect the situation in the Baltic States. "Let's see what happens in March. Today we can only speculate, and that is not the job of a prime minister", said Lithuania's Prime Minister Gediminas Kirkilas. Latvia's leader was also cautious. "Nobody can predict what will happen in the elections for the Duma and the Presidency. We are open to cooperation", said Prime Minister Aigars Kalvitis. As it so happens, it will not be his job to be so, as he became obliged by a domestic crisis to step down on December 5.

Only Ansip would ponder the implications of Putin staying in power. "Some say that it would bring stability to Russia, but I would prefer democracy", Ansip says. "It is hard to talk about, say, freedom of the press in connection with Russia nowadays." Ansip emphasised Estonia's desire for good relations. "We would want good, pragmatic relations with all of our neighbours, and I hope that some day we will have those kinds of relations with Russia", Ansip said. 

The topic of relations with Russia was not the main issue in the official part of the summit meeting of eight countries. Climate change dominated a one-hour discussion involving the prime ministers of the Baltic countries, as well as those of Finland, Sweden, Norway and Iceland. Danish Prime Minister was at home, taking part in his country's ongoing election campaign. A discussion on Russia was scheduled for the dinner hosted later by Norwegian Prime Minister. 

In recent years the prime ministers of the Nordic and Baltic countries have held a meeting in connection with the annual meeting of the Nordic Council. Hundreds of Parliamentarians, civil servants, and a number of ministers from the five Nordic Countries convened in Oslo for the annual session. 

Energy independence coming to Estonia
Estonia has shown itself less fearful of Russian control of energy than have Latvia and Lithuania. One effect of the riots in Tallinn last May (which were given tacit Kremlin support) has been a spectacular worsening of Estonian-Russian relations. As a result, Estonia is developing a policy of energy self-sufficiency that may serve it better in the long run. 

It has already completed the Baltics' first power bridge, the EstLink cable to Finland. In the words of European Commission President Jose Manuel Barroso, "Before EstLink, the Baltic states were an energy island." 

Construction of a second EstLink cable has been confirmed, and Estonia is keen to be a full partner when Finland builds an expected sixth nuclear power station. Until then, Estonia theoretically could supply all its own electricity needs. 

Estonian Prime Minister Andrus Ansip said recently: "Today, we are an energy island. Estonia's main energy source is oil shale. We produce enough energy from oil shale to meet our own needs. And we are even able to supply our neighbors with electricity. Thanks to oil shale, our overall energy dependency is one of the smallest in the European Union. Indeed, we are not highly dependent on Russian energy, as is commonly believed." 

But burning shale oil produces high-level carbon emissions far above than the quota allocated by the EU. So while Lithuania protests about having to shut down its ancient nuclear plant, Estonia is defending its use of 'dirty' oil shale. 

Nord Stream 
Another element of the energy debate is Nord Stream, a Russo-German project to construct a 1,200-kilometer gas pipeline along the Baltic seabed. It is much more expensive to build a pipeline underwater than it is on land. The Baltics were not consulted about its pending construction. The obvious conclusion is that Nord Stream is a Poland-Belarus -Baltic bypass, enabling Russia to cut off supplies to the Baltics without affecting its bigger customers in the West. 

Nord Stream also makes the EU's talk of a common energy policy look questionable. From a Baltic perspective, it enhances the energy supply of some EU states at the expense of others, placing national interest above collective interest. 

When Finland expressed environmental concerns about the route of the pipeline, Nord Stream was forced to make a belated approach to Estonia for permission to survey the seabed in the small country's exclusive economic zone. Estonian politicians derived some satisfaction from giving Russia a taste of its own medicine and refused. 

The real irony now is that the Baltics' haphazard attempts to avoid being split by Moscow's divide-and-rule strategy may end up having precisely that effect. Estonia is disillusioned with the dithering over the Ignalina nuclear plant and is looking north.  

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