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Estonia Flag of Estonia

Last reviewed: 31 March 2009

Country information


Map of Estonia

ESTONIA TODAY

Country Facts

Area: 45,227 sq km (17,462 sq m)
Population: 1.34 million
Capital City: Tallinn (Pop: 411,600)
People: 68% Estonian, 25% Russian, 7% other
Languages: Estonian (the official language), Russian
Religion(s): mainly Lutheran; Orthodox Christian
Currency: Kroon
Major political parties: Centre Party, Res Publica and Pro Patria Union, Reform Party, People's Union, Social Democrats, Green Party.
Government: Parliamentary Democracy
President: Toomas Hendrik Ilves (2006)
Prime Minister: Mr Andrus Ansip (2007)
Foreign Minister: Mr Urmas Paet (2007)

Membership of international groupings/ organisations: United Nations (UN), Organisation for Co-operation and Security in Europe (OSCE), North Atlantic Treaty Organisation (NATO), European Union (EU), Council of Europe (COE), Euro-Atlantic Partnership Council (EAPC), World Trade Organisation (WTO), Council of the Baltic Sea States (CBSS)

ECONOMY

Basic Economic Facts (Source: Estonian Ministry of Finance (www.fin.ee) & Statistical Office of Estonia (www.stat.ee)
GDP: €15.9b (2008)
GDP per capita: €11,833 (2008)
Annual Growth: -3.6% (2008), -9.7% (Q4 2008)
Inflation: 10.4% (2008), 3.4% (Febuary 2009 y-o-y)
Unemployment: 4.5% (2008), 7.6% (Q4 2008)
Major Industries: Timber, food processing, machine production
Major trading partners: Finland, Sweden, German, Latvia, Russia

Further information about Estonia's economy can be found at UK Trade & Investment Country Profile: Estonia

Of the countries formerly in the Soviet Union, Estonia has made some of the most remarkable progress in its move to a liberal market economy. Following independence, Estonia followed an open market policy, with little or no trade barriers, which saw sustained levels of growth, averaging around 4-5% a year. After EU accession in May 2004, growth accelerated to around 10%. The economic boom was fuelled by low interest rates and constrained by the limited workforce, driving up consumer prices and wage inflation. Following the few years of rapid pace of convergence to the old EU MS the need for structural changes to the economy became evident in 2007. The small and flexible Estonian economy started its adjustment, which was interrupted by the global economic crisis. In 2008 the economy went into recession. Bank of Estonia believes the country has the prerequisites for being among the first ones to exit the crisis. This will depend on the speed of further adjustments to the economy and the recovery of the main export markets.

HISTORY

Recent History

During its long history Estonia has been ruled by the Danes, Swedes, Russians, Germans and Soviet Union. But the 22 years of Independence, between the First and Second World Wars, was the defining period in the country's modern history.

This was achieved in the wake of the 1917 Russian Revolution. With the assistance of the British Royal Navy, Estonian forces were able to repel Bolshevik troops. Three years of effective autonomy led to the formalisation of Estonian independence in the Treaty of Tartu (1920), signed with the post-revolution Moscow government. Independence continued until 1940, when Estonia was annexed by the Soviet Union, with Nazi German agreement, according to a secret annex to the Molotov-Ribbentrop pact of 1939. Following a rigged election, an Estonian Parliament declared Estonia a constituent part of the Soviet Union in August 1940. The German army occupied Estonia until 1944 when the Soviet army repelled the German forces and re-established control in Estonia. Society and industry were modelled along Soviet lines and absolute control rested with the Soviet Communist Party. The UK and most other western countries never recognised de jure the Baltic States' incorporation into the USSR.

The more tolerant political atmosphere in the Soviet Union in the late 1980s allowed pro-independence and reform groups to come to the fore in the so-called 'Singing Revolution'. In March 1990 these groups assumed control of government. The restoration of Independence took place on 20 August 1991, and was recognised by the UK with the rest of the European Community, on 27 August.

Longer Historical Perspective

BBC News Country Timeline: Estonia

INTERNATIONAL RELATIONS

Relations with Neighbours

In April 2004 Estonia formally joined NATO and on 1 May 2004 also became member of the EU, thereby completing 2 long-term foreign political objectives, which had shaped Estonian policy choices for more than a decade.

Estonia was in the first wave of Central European countries invited to begin negotiations to join the EU, in 1998. Negotiations were relatively smooth, culminating in the invitation issued in Copenhagen in December 2002. Estonia was one of the best-performing EU candidates in terms of closing chapters of the acquis, implementing its commitments, and exemplifying clean government. Agriculture has been the most contentious issue in Estonia: quotas for sugar and milk were considered too low. The UK view has been that, in the absence of scope for further concessions, CAP reform is the best solution. Estonia was granted the exceptional right to hunt bears and lynx: not endangered species in this forested country. As an EU partner, Estonia has taken similar approach to the UK on issues such as tax harmonisation, trade policy and social policy.

The Estonian EU referendum was held on 14 September 2003. Public support for the EU was high at just under 67% with a turnout of 63%. On 1 May 2004, Estonia joined the EU along with 9 other countries.

In November 2002 Estonia was invited to join NATO at a summit meeting in Prague. Estonia has been an enthusiastic participant in NATO’s Partnership for Peace programme and has joined peacekeeping operations in the former Yugoslavia and Afghanistan. Estonia became an Associate Partner of the Western European Union in May 1994. It joined the Council of Europe in 1993, and was an effective Chairman of its Council of Ministers for 6 months from May-October 1996.

The Baltic States have developed a wide network of co-operation. Intergovernmental co-operation is managed in the framework of the Baltic Council of Ministers. Heads of State and Government meet regularly - at least once a year. Co-operation focuses on areas such as trade, economic relations and EU/NATO integration.

Estonia maintains excellent relations with its Nordic neighbours, strong historical and linguistic bonds exist, in particular between Estonia and Finland. Finland is Estonia's leading trading partner, closely followed by Sweden.

Relations with Russia

Political relations between Estonia and Russia remain strained following the relocation of a war memorial in Tallinn in late April 2007 (see below). A number of other difficulties exist, which stand in the way of improved relations. For example; although Russian troops were withdrawn from Estonian territory on 31 August 1994, some problems remain over residence rights for retired Russian military personnel still in the country.

The most sensitive issue in Estonia/Russia relations is the position of the Russian-speaking ethnic minority in Estonia. As a result of the Soviet occupation (deportation of many of the indigenous population and inward migration by Russians), the ethnic Estonian component of the population has fallen significantly since 1940. Ethnic Estonians account for 68% of the population; 25% are ethnic Russian and 7% other (mostly Russian-speaking former soviet) nationalities. Most ethnic Russians live in the industrialised North East (70% Ethnic Russian) and Tallinn (50% ethnic Russian).

The Estonian Government requires those applying for citizenship to demonstrate knowledge of the Estonian language and constitution. Many Russian speakers, especially the elderly, are reluctant or unable to learn the Estonian language to the required level, and thus remain stateless. Non-citizens with residence permits are entitled to aliens' passports for foreign travel (however, they require a visa for travel to many other countries, including the UK.) Non-citizens are entitled to work, live, own property, obtain pensions etc as any other residents in Estonia. They are allowed to vote in local government elections but not national elections. In 2005, the number of naturalised citizens exceeded the number of non-citizens for the first time, but around 10% of the Estonian population remain without citizenship.

The OSCE opened a resident Mission in Estonia in 1993. Russian allegations of human rights abuses by Estonia (towards the ethnic Russian minority) have been consistently judged unfounded by the UN, and by OSCE and Council of Europe Missions. However, those missions and the OSCE High Commissioner on National Minorities (HCNM) recommended the easing of citizenship requirements to help integrate minorities and promote better communal relations. Estonia has satisfied all the HCNM's recommendations on the citizenship law. The OSCE Permanent Council closed its mission monitoring the situation of ethnic minorities in Estonia in March 2002, thus recognising that Estonia had fulfilled all OSCE requirements.

Controversy over the Estonia/Russia Border Treaty also affects bilateral relations. After protracted negotiations, a border was agreed in all technical respects in spring 1996 and an agreement was finally initialled on 5 March 1999. In May 2005, both Russia and Estonia formally signed. . The Estonian Parliament ratified it in June 2005. Shortly afterwards the Russian Government withdrew its signature citing concerns over the text of Estonian addition of a preamble in the Estonian ratification law.

Following violent demonstrations on 27 April 2007, which resulted in 1 death and many arrests, the Estonian authorities relocated the controversial “Bronze Soldier” war memorial to a military cemetery in Tallinn from its previous location in the centre of Tallinn. This act badly affected relations between Estonia and Russia but the situation has calmed down. It remains to be seen what the full consequences for bilateral relations will be.

Relations with the UK

Before the Soviet occupation in 1940, relations between the UK and Estonia were close. The UK was a major market for Estonian produce. With our EU partners, we recognised the restoration of Estonian Independence on 27 August 1991. Diplomatic relations were restored in September 1991, and our Embassy opened in Tallinn in the same year. The Embassy moved to a new building in May 1999.

There is an UK-Estonia All-Party Parliamentary Group, chaired by Gordon Marsden MP, and an equivalent in Estonia, chaired by Sven Mikser MP.

Cultural Relations with the UK

The British Council has a representation in Tallinn. There is an active programme of English language teaching support, cultural exchange and scholarships for Estonian students to study in the UK.

British Council - Estonia

Recent Visits

Inward

Almost all of Estonia’s Ministers visited the UK during the second half of 2005, as part of the UK’s EU Presidency programme of events.

  • Andrus Ansip, (Prime Minister) in October 2005
  • Urmas Paet, (Foreign Minister) in November 2005
  • Jaak Aab (Social Affairs Minister) in March 2006
  • Arnold Rüütel (President) in July 2006
  • Andrus Ansip (Prime Minister) in January 2007 (private)
  • Toomas Hendrik Ilves (President) in February 2007 (private)
  • Viljar Jaamu, (Chairman of Enterprise Estonia) in May 2007.
  • Urve Palo (Minister of Population and Ethnic Affairs), November 2007
  • Urmas Paet (Foreign Minister), March 2008
  • Toomas Hendrik Ilves (President), October 2008
Outward
  • Gerry Sutcliffe (Parliamentary Under-Secretary, Department for Trade and Industry) in October 2004
  • Ivor Caplin (Parliamentary Under-Secretary of State, Ministry of Defence) in January 2005
  • Rosie Winterton (Minister of State, Department of Health) in January 2005
  • Stephen Ladyman (Minister of State for Transport) in June 2005
  • Barry Gardiner (MinisterParliamentary Under-Secretary of State for Competitiveness) in June 2005
  • George Osbourne (Shadow Chancellor)in June 2005
  • Douglas Alexander, (Minister for Europe) in July 2005
  • Baroness Ashton, Parliamentary Under-Secretary of State at the Department for Constitutional Affairs (September 2005)
  • The Rt. Hon Tony Blair, (Prime Minister) in December 2005
  • HRH The Duke of Kent in March 2006
  • State Visit by Her Majesty The Queen and The Duke of Edinburgh, in October 2006.
  • Margaret Beckett (Secretary of State for Foreign and Commonwealth Affairs), in October 2006.
  • Pat McFadden (Minister for Employment Relations), in September 2007
  • Visit by the Members of Liberal Democrats Party, in September 2007
  • Gordon Marsden, MP (Chair of the UK-Estonia All-Party Parliamentary Group), in September 2007
  • Baroness Taylor (Minister fo International Defence and Security) in November 2008
  • Members of the House of Commons Defence Select Committe in March 2009

GEOGRAPHY

Estonia, at 45,227 sq km, is the smallest and the most northerly of the 3 Baltic states, with Latvia to the south. Estonia borders Russia to the east and is only 80km South across the Gulf of Finland from Helsinki. The country is mostly flat, the highest peak being Suur Munamägi hill at 318m (the highest in all the Baltic states) in the south east of the country. Lake Peipsi on the Estonian-Russian border is the fourth largest lake in Europe at 3555 sq. km (but just an average of 7.9m deep), although Võrtsjärv in the south of the country is the biggest lake lying totally in Estonia, at 266 sq km, but just 6m deep.

Tallinn, the capital (population 411,600), is situated on the north western tip of the country. The old town is well preserved within its original walls, both the upper town (Toompea) where the parliament and the Lutheran cathedral are located, and the lower merchant town. The city was an important medieval port and trading centre. In 1234 it joined the Hanseatic League, the trading union, which was the dominant commercial and cultural link across northern Europe. It is now a UNESCO world heritage site.

Tartu (population 100,577) in the south east, is Estonia's second largest city, and is famous for its university, which was founded in 1632.

TRADE AND INVESTMENT

Trade and Investment with the UK

Britain is a major investor in Estonia, and British exports to Estonia are significant (211.89 million GBP in 2008). Estonia exports to the UK, notably food, timber and petroleum products/related materials, totalled 142.8 million GBP in 2008.

POLITICS

Recent Political Developments

Parliamentary elections on 4 March 2007 resulted in the Reform Party and the Centre Party emerging with the most seats. The number of seats in the 101-member Riigikogu (Parliament) were:


Reform Party 31
Centre Party 29
Res Publica and Pro Patria Union (RPPPU) 19
Social Democrats 10
Green Party 6
People's Union 6


Ansip has been Prime Minister since April 2005. Prior to that he had been the Economics Minister in Juhan Parts' coalition government and before that he served for 6 years as the Mayor of Tartu. Urmas Paet, was re-appointed as Foreign Minister, having also served in the same post since April 2005. The former governing party, Res Publica merged with Pro Patria in May 2006 to form a new party, the Res Publica and Pro Patria Union.

In June 2004, Estonia held its first ever election to the European Parliament. A record low turnout for an election, only 27% of the electorate, saw the Social Democrats win 3 seats and the Centre Party, Pro Patria and Reform Party win 1 each.

The Estonian President is elected by Parliament and may serve up to 2 5-year terms. Presidential elections on 23 September 2006 saw Social Democrat MEP and former Foreign Minister, Toomas Hendrik Ilves, elected as the new President. He took office on 9 October 2006. Prior to that Arnold Rüütel was President from 2001-2006 and Lennart Meri was in office from 1992-2001.

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