Remembering the Tartu Peace Treaty

Estonian War of Independence Victory Column, Tallinn

Much of the global media’s attention will no doubt focus on a rather confused groundhog in Punxsutawney, Pennsylvania, but let’s pause for a moment to remember that tomorrow, February 2nd, marks 90 years since the signing of the treaty, between Russia and Estonia, that ended the Estonian War of Independence and, for the first time in modern history, legally established the Republic of Estonia as a sovereign state.

Estonia had been a province of Imperial Russia since 1710, and had been subject to some sort of foreign hegemony since the 13th century. Then, in the late 1910s, amidst the turmoil of World War I and the Russian Revolution, chaos ensued: foreign armies (Bolshevik, White Russian, German, even British) came and went, and political institutions were suddenly more vulnerable to change than they had been for centuries.

Estonia formed a provisional government and, on 24 February 1918, declared a fragile independence which lasted for only about 24 hours: German troops occupied Tallinn the very next day. But after the First World War ended on 11 November, the Germans left and Estonia revived its provisional government to challenge the Tallinn Soviet that had been established by the Bolsheviks. The Red Army invaded Estonia less than two weeks later, igniting the Estonian War of Independence.

The war attracted a diverse lot of participants. Estonian efforts were augmented by White Russian soldiers, by Finnish, Swedish, and Danish volunteers, and by a British naval presence; Estonia also fought a bloody battle on its southern border against a Baltic German military force. There was a great deal of battlefield realignment, and front lines moved dramatically as each side’s fortunes rose and fell: at one point, Soviet forces came within 35 kilometers of Tallinn; at another, Estonian forces conquered Pskov and got quite close to St Petersburg (then called Petrograd). By the time it was over, the 14-month war had claimed 3,588 Estonian lives and left 13,775 Estonians injured.

Signatures on the Tartu Peace Treaty

Estonian and Soviet Russian negotiators met in Tartu, Estonia’s second-largest city, to negotiate peace. In the resulting Tartu Peace Treaty, signed on February 2nd, 1920, Soviet Russia recognized Estonian independence and forever renounced claims on Estonian territory. The Soviets also agreed to pay Estonia restitution in the amount of 15 million gold rubles.

Tartu was an apt choice for the peace negotiations, because it was the site of one of the decisive battles, two centuries earlier, of the Great Northern War, which resulted in Russia gaining the Estonian territory from Sweden. In 1707, Russia implemented a brutal scorched-earth policy which resulted in the destruction of every major building in Tartu.

Read more about the Estonian War of Independence and the Tartu Peace Treaty here and here.

The last new Estonian kroon coin?

In the same week that Estonia’s ministry of finance announced that the country had completed its application to join the eurozone, the Bank of Estonia released the newest — and perhaps the last — Estonian kroon coin. The silver coin was issued to commemorate the Vancouver Winter Olympics and carries a nominal denomination of 10 kroons.

The eye-catching design is meant to depict “a dynamic stylised image of racing cross-country skiers.” While you may or may not be able to discern the skiers in the rather abstract image, what you will see on the coin is the word “krooni” for perhaps the last time. And its probable status as the last kroon-denominated coin to be minted by Estonia should greatly enhance its collectible value.

Interested in picking one up for your collection? Notwithstanding its modest face value, it’s made of real silver, so it will cost you 350 kroons. Information on how to order the coin is here.

The Estonian kroon is officially an endangered species

Estonia’s determined push to adopt the euro as its legal currency has reached its final stage as the government today approved a convergence program that it believes will pave the way for euro adoption next January. Barring any unforeseen surprises, Estonians will exchange their kroons for euros in less than a year.

The Finance Ministry’s report concludes that Estonia has met the requirements for adopting the euro. Known as the Maastricht criteria, these include a cap on government budget deficits of 3 percent of GDP, maximum government debt of 60 percent of output, and inflation no more than 1.5 percent above the average of the three European Union countries with the lowest inflation rates.

Estonia is not alone in its optimism. Two European political heavyweights — German foreign minister Guido Westerwelle and EU commissioner Olli Rehn — have recently voiced support for Estonia’s euro bid.

Coming soon to Estonian wallets

So what are the pros and cons for Estonia of joining the euro club? Here’s a concise summary of the arguments on both sides of the debate.

Benefits

  1. Estonia becomes a much more attractive target for foreign investment, as foreign investors won’t need to worry that their investments will lose value due to currency fluctuations
  2. The country is insulated from the unpredictable and potentially devastating forces of foreign currency speculation
  3. Estonian households and businesses are able to borrow money, free of foreign exchange risk, from any bank in the eurozone; the increased competition could considerably reduce Estonians’ borrowing costs
  4. Estonians reap the psychological benefit of full membership in every European club

Costs

  1. Estonia loses control over its own monetary policy; decisions about interest rates and the amount of money in circulation will be made in Frankfurt rather than Tallinn
  2. The process of qualifying for the euro may have made Estonia’s recession deeper by restricting government spending just when it was most needed
  3. Estonians must endure the loss of a big source of national pride, the kroon

Estonia’s application will be voted upon by the European Commission on June 18th. If it is approved, Estonia will, on January 1, 2011, become the 17th country to adopt the euro as its official currency. And it will be time to wave goodbye to the kroon.

CORRECTION: An earlier post asserted that the euro could be adopted by Estonia as early as June 2010. This is of course the earliest possible approval date; as noted above, the soonest adoption date is January 1, 2011. Estonia on the Map regrets the error.

Estonia launches a global movement

The hottest new Estonian export is not a product or a service. It is the deceptively simple idea that, if you make it fun, and create a sufficiently groovy vibe around it, you can mobilize huge numbers of people to clean up massive amounts of illegally-dumped garbage — all in one day. The concept, perhaps better described as a movement, is called Let’s Do It!

Estonia first “did it” almost two years ago, effectively demonstrating the concept on the 3rd of May, 2008. The country mobilized 50,000 volunteers to clean up 10,000 tons of garbage: trash that had been dumped illegally in forests and meadows, along roadsides and riverbeds, all over the country.

It took a lot of planning. For months beforehand, volunteers had crisscrossed the country on foot with GPS-enabled cell phones to map the illegally-dumped garbage. Then they created an effective marketing buzz around the project, getting politicians and celebrities involved, and succeeded in achieving something quite remarkable: they made garbage collection cool.

Let's Do It! volunteers demonstrate an uncanny enthusiasm for their work

Now word has spread. A conference held in Tallinn last weekend attracted eight countries: Slovenia, Portugal, Romania, India, Lithuania, Latvia, Estonia and Finland. The movement has put up a website. And they’ve attracted the notice of media outlets as far afield as France, India, and Singapore.

So pick up some trash. You’ll be cool if you do.

Back on the blog

Greetings to all! Estonia on the Map has returned from its mid-winter hibernation. I’m looking forward to resuming EOTM’s observations and ruminations on contemporary Estonia in the days and weeks ahead.

But first, here’s a quick update on Back on the Map. Sales of the book have been brisk, and I appreciate the wonderful comments that readers have posted, both on this blog and on the book’s page on amazon.com. The promised bonus features — the playlist, the 1992 photo album, and the long-awaited “lost” chapter — are nearly ready for release and will be rolled out in February. Watch for details soon.

February is also a weighty month in the Estonian calendar. Even before the country sends 27 talented athletes with high hopes to the Winter Olympics in Vancouver, Estonia is set to observe the 90th anniversary of the signing of the Tartu Peace Treaty on February 2nd. And three weeks later, on February 24th, comes the celebration of Estonian Independence Day. Watch for full coverage of these events and milestones, and lots more too, here on Estonia on the Map.

Percentage of foreign citizens in Estonia’s population is 3rd-highest in Europe

Estonia ranks third in the European Union in its proportion of foreign citizens, according to a study published last week by the EU’s statistical agency Eurostat to mark International Migrants Day. Foreign citizens comprise approximately 17% of Estonia’s population, placing Estonia third behind Luxembourg (43%) and Latvia (18%).

At the bottom of the rankings is Romania, with foreign citizens representing just 0.1% of its population.

Who are Estonia’s foreign citizens? The Eurostat study is silent on this question, with a footnote that detailed data on Estonia is unavailable. But some insight can be gained by looking at the data for neighbor Latvia. According to Eurostat, most (89.5%) of Latvia’s foreign citizens are classified as recognized non-citizens, a category defined as:

… [A] person who is neither a citizen of the reporting country nor of any other country, but who has established links to that country which includes some but not all rights and obligations of full citizenship.

One can reasonably assume that a similar proportion of Estonia’s foreign citizens is made up of recognized non-citizens. And just who are these RNCs? According to 2000 census figures, 25.6% of Estonia’s population is ethnically Russian, with another 2.1% Ukrainian and 1.3% Belarusian.

Would you be surprised to learn that the majority of foreign-citizenship leader Luxembourg’s foreign citizens are Portuguese? The complete study is here.

Precisely how miserable is Estonia?

The economic crisis has hit Estonia hard. As this blog has noted, Estonia’s economic output declined at an annualized rate of 15.6% in the third quarter, and the country’s unemployment rate, at 14.6%, is a modern record for Estonia and the third highest in Europe. The only Estonian industry showing any growth at all is fisheries, and Estonian construction workers have fled to Finland in search of employment.

Today’s New York Times cites a new Moody’s report that compares a mainly European group of countries on the basis of a newly contrived misery index. This index adds together a country’s unemployment rate and its government budget deficit, calculated as a percentage of its gross domestic product. The resulting total represents the country’s misery index, which

captures the current conundrum for many countries: their economies need stimulus, but their budgets may not be able to afford it.

Estonia scores a misery index of about 18%, placing it between Portugal (less miserable) and France (more miserable) in the league tables. But Estonia is considerably less miserable than the United States and Britain, and far better off than misery leaders Spain, Latvia, and Lithuania (each close to 30%). View the complete tables here.

None of these countries is in great shape, but the figures suggest that the Estonian government has a bit more flexibility to implement economic stimulus measures than do its Baltic neighbors.

Estonia mourns seventh Afghanistan fatality

An Estonian soldier was killed yesterday while on foot patrol in Helmand province, marking Estonia’s seventh fatality in the current Afghanistan conflict. Stars and Stripes has the details.

As noted in an earlier post, with 10 percent of its active troops on the ground in Afghanistan, Estonia is the largest per capita contributor to the coalition effort in that country. Helmand province, where the Estonian soldiers are serving, is one of the most volatile regions of the country.

RIP modern Estonian kroon: June 1992 – June 2010?

In spite of the economic crisis, Estonia’s government policy-makers have continued to focus, laser-like, on fulfilling the Maastricht criteria for adoption of the euro. Most of the criteria are being met, and the country appears to be on track to become the 17th country to adopt the euro as its official currency.

Getting to this point hasn’t been easy. And as a policy goal, euro adoption has many critics because meeting the Maastricht criteria has meant reducing government spending — and therefore the size of the social safety net — just as tens of thousands of Estonians are falling victim to unemployment. But for better or worse, according to a brand new International Monetary Fund publication, euro adoption could happen as early as next June.

Estonia became the first former Soviet republic to dump the ruble and issue its own currency, the kroon, in June 1992. More correctly, the kroon was reissued. The kroon was first introduced by the fledgling Estonian Republic in January 1928, and it remained the country’s legal tender until the Soviet occupation began in 1940. So taking into account both of its iterations, the kroon will have had a 30-year lifespan if current forecasts prove to be accurate.

If you’ve had the pleasure of holding them in your hands, you know that Estonian banknotes are beautifully designed and a pleasure to behold. I provide a fond description of my first encounter with a 500-kroon note in chapter 12 of my book. Here’s an overview of the notes currently in circulation:

For a more detailed perspective, you can click to open images of every version of every denomination note at the website of the Bank of Estonia.

If Estonia does manage to adopt the euro next summer, it will become the first former Soviet republic, and the third formerly Communist country (after Slovenia and Slovakia) to do so.

Estonian economy: good if you’re a fisherman

Growth industry

In my post on Estonia’s third quarter gross domestic product (GDP) report last month, I took the glass-half-full approach and ventured that the numbers suggested the Estonian economy had turned the corner. The revised figures, just released by Statistics Estonia, show that the corner was not as sharp as we thought.

The original numbers had the Estonian economy contracting by 15.3% in the quarter ended September 30th; the revision shows that actual GDP contraction was 15.6%. This still represents an improvement over the second quarter, during which economic output fell 16.1%, but one that is less pronounced than the preliminary numbers suggested.

The official GDP revision also included some eye-popping numbers on the performance of individual components of the Estonian economy. The only industry that grew meaningfully in the third quarter was fishing.

The biggest loser was construction, where economic activity fell by a whopping 32%. No wonder so many Estonian construction workers have gone to Helsinki looking for work.