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Estonia country brief

Introduction

Estonia is the smallest of the three Baltic Republics covering an area of 45,227 square kilometres. Situated on the north-eastern edge of the Baltic Sea, Estonia borders Latvia to the south and the Russian Federation to the east. Estonia's population is approximately 1.3 million (2014). The capital of Estonia is Tallinn. Estonia celebrates its National Day on 24 February.

Political overview

System of Government

Estonia regained its independence on 20 August 1991 following the break-up of the Soviet Union. The Fourth Constitution of the Republic of Estonia, adopted on 28 June 1992, established a democratic system based on a Presidency and a unicameral 101-seat parliament, known as the Riigikogu.

Political Developments

The President of Estonia, Toomas Hendrik Ilves, was elected in September 2011 for a second (and final) five-year term. The next Presidential elections are scheduled for 2015. The President has mainly ceremonial powers.

In the March 2011 parliamentary elections, the mandate of Prime Minister Andrus Ansip's centre-right Reform Party was renewed. The new governing coalition consisted of the Estonian Reform Party and the Pro Patria and Res Publica Union. However, in the beginning of 2014 Ansip steped down, and a new coalition was formed under Prime Minister Taaivi Roivas between Roivas’ Reform Party and the Social Democratic Party. The coalition controls a majority in the 101-seat Parliament. The next Parliamentary election is due in 2015.

Foreign Policy

Estonia joined NATO on 2 April 2004 and acceded to the European Union on 1 May 2004. Estonia joined the Schengen group of European countries on 21 December 2007. Estonia was accepted into the eurozone on 1 January 2011.

Economic overview

Estonia experienced sharp falls in the economy in 2008-09, due to a slide in domestic demand and weak exports arising from the global financial and economic crises. GDP contracted by 13.9 per cent in 2009, but returned to positive growth in the following year. GDP grew in 2012 to 3.2 per cent, supported by robust domestic demand and moderate export growth. While GPD fell to 0.8 per cent in 2013, the IMF forecasts it will rise again to 2.5 per cent in 2014. Unemployment jumped up to 16.9 per cent following the global financial crisis but has fallen consistently since then. According to Statistics Estonia, unemployment was at 8 per cent in September 2013, the lowest rate in the last four years. The IMF predicts it will fall further to 7 per cent in 2014.

Bilateral relationship

Australia was one of the first countries to recognise Estonia's return to independence in August 1991, pushing strongly for the withdrawal of all Russian troops from Estonian territory in the period that followed.

Australia has the sixth largest expatriate Estonian community after Finland, Russia, Sweden, Canada and the USA. The 2011 census in Australia recorded 8 550 people who identified as being of Estonian ancestry. The largest Estonian communities are in Sydney, Adelaide and Melbourne.

The Australian Ambassador to Estonia is accredited from Stockholm. Australia also has a consulate in Tallinn headed by an Honorary Consul. Estonia is represented in Australia by a Consulate-General located in Sydney, and consulates in Perth and Brisbane. The Estonian Ambassador accredited to Australia resides in Tallinn.

Australia has signed a Working Holiday Maker arrangement with Estonia, which came into effect in May 2005. In 2011, Australia and Estonia commenced negotiations on a bilateral Social Security Agreement.

High-level visits

Estonian Foreign Minister Urmas Paet visited Australia in November 2011 to open Estonia’s Consulate-General in Sydney. Mr Paet had previously visited Australia in April 2009. Parliamentary delegations from Estonia visited Australia in March 2008 and in April 2000. President of the Australian Senate, Senator John Hogg, visited Estonia in October 2013. Former Minister for Foreign Affairs, the Hon Stephen Smith MP, visited Estonia as part of a Foreign Ministers’ Meeting of the International Security Assistance Force in Afghanistan (ISAF), held in Tallinn in April 2010.

Bilateral economic and trade relationship

Two-way merchandise trade between Australia and Estonia is small, valued at $60 million in 2013-14. Australia’s exports to Estonia totalled A$12.3 million, primarily consisting of gold coin and legal tender coin. Estonia’s exports to Australia for the same period were valued at A$48.4 million and included wood and telecom equipment and parts.

Australian institutions are working to develop education links and student exchange arrangements with Estonia. Monash University in Melbourne has an exchange agreement with the Estonian Business School in Tallinn.

Please contact Austrade for information on doing business in Estonia.

Updated April 2014