Tag Archives: estonia

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Farewell to the kroon: European Commission endorses Estonia’s bid to adopt the euro

Estonia’s long and determined effort to join Europe’s monetary union was rewarded this morning when the European Commission endorsed Estonia’s application to adopt the single currency.

In its 2010 Convergence Report, the EC formally declared that Estonia has satisfied all 5 criteria for membership and recommended that Estonia become the 17th country to adopt the euro as its official currency. The final decision will be made by the finance ministers of the 16 countries already in the eurozone. If, as expected, they give the green light at their meeting in July, Estonia will make the switch from kroons to euros in January 2011.

The Convergence Report asserted that eight other euro candidates (Bulgaria, Czech Republic, Hungary, Latvia, Lithuania, Poland, Romania and Sweden) are not ready and must wait awhile longer. Analysts take this to imply a waiting period of at least four more years, so Estonia is likely to be the last country to join the eurozone until at least 2014.

This moment of triumph for Estonia also contains a hint of contention, because even as the EC has endorsed Estonia’s readiness to join the eurozone on the bases of all five required criteria (budget deficits, debt, long-term interest rates and currency stability, and inflation), a report released today by the European Central Bank calls into question Estonia’s readiness on the last factor. According to a Bloomberg report,

[t]aking direct issue with the commission’s ruling, [the ECB] voiced “concerns regarding the sustainability of inflation convergence in Estonia.” Prices in April, the month after the euro test, rose 2.9 percent from a year earlier, the fastest pace in 14 months. Asked in a telephone interview how Estonia will counter the criticisms, Finance Minister Jurgen Ligi said he will work with European governments “to explain our case so that no doubts remain about our eligibility.”

Estonia is probably not too worried. The ultimate decision-makers, the finance ministers of the 16 existing eurozone countries, have always followed the recommendation of the European Commission, and they are under no obligation to heed the European Central Bank’s suggestions.

You can read the New York Times’s report here. And here’s a nice backgrounder on the history of the euro with a list of the countries that currently use it and their dates of adoption.

Key milestone is approaching for Estonia’s 2011 euro bid

Estonia’s long and arduous endeavor to become the 17th country to adopt the euro as its official currency will reach a key milestone next week. The European Commission will issue its official report approving or rejecting Estonia’s application on 12 May.

So what will the report conclude? In spite of the financial market turbulence wrought by the unstable situation in Greece, most analysts expect the EC to give Estonia a thumbs-up. A Reuters backgrounder out today concludes that the EC is “expected to grudgingly let in Estonia”. And Estonia’s bid continues to be supported by its closest neighbors. In an interview published yesterday, Finnish finance minister Jyrki Katainen was upbeat:

“Estonia has coped with a decline in economic activity of 10% and obviously still fulfills the criteria” for adoption of the common currency, he said. “In my opinion, nothing argues against the planned acceptance into monetary union next year.”

Latvian Prime Minister Valdis Dombrovskis was even more adamant, asserting in a speech last week in Munich: “We would like to highlight the importance of Estonia joining the euro zone at the earliest opportunity, for the economic recovery and stability of the whole Baltic region.”

Doubts have been raised, however, by an economic report released today which shows that Estonian consumer prices increased at an annual rate of 2.9% in April, the highest rate of inflation the country has seen since February 2009. And public comments issued by Olli Rehn, European Commissioner for Economic and Monetary Affairs, have become less favorable than they were just a few months ago.

Assuming a favorable report by the EC, will euro adoption be a good thing or a bad thing for Estonia? I summarized the arguments for and against the adoption of the euro in this earlier post. The Estonian political leadership is still 100% in favor of monetary union, and Estonian popular opinion is still decidedly lukewarm.

On this day in 1918: an independent Estonian nation was born

Estonia's national flower is the blue cornflower

“Esthonia” had for centuries existed only as a far-flung province in somebody else’s empire. The land that encompasses today’s Estonia has at various times been included on the official maps of Denmark, the Livonian Order, Sweden, and Russia. But never, from the early 13th century to the early 20th century, was Estonia its own nation.

On a cold winter’s day in 1918, however, Estonians declared that the time for independence had arrived.

The idea of nationhood had begun to gather steam in the late 19th century. And on 19 Feb 1918, amidst the turmoil of the First World War, a “manifesto” of independence was approved by Estonia’s Provisional National Council. Five days later, on Sunday, the 24th of February, 1918, it was proclaimed to the world.

The manifesto marked a bold first step, but actual nationhood would have to wait almost two more years, during which the fledgling sovereign state would endure nine months of German occupation followed by a brutal tw0-front War of Independence — fought against Bolshevik Russia to the east and Baltic German forces to the south. De facto independence was achieved with the signing of the Tartu Peace Treaty on 2 February 1920 (which you can read more about here).

24 February 1919: Estonia celebrates the first anniversary of its Declaration of Independence

Estonia’s independence lasted until World War II, at which point it was interrupted by nearly a half century of Soviet occupation. Independence was regained in August 1991, but the Republic of Estonia officially commemorates its independence on the date, 92 years ago, that the bold manifesto was issued in Reval (as the capital Tallinn was then known).

Click the link to read the 1918 New York Times article reporting the proclamation of Estonia’s independence manifesto: Reval would now be free

You can listen to the rousing cadences of Estonian national anthem here, and read more about Estonian Independence Day here.

Happy Birthday, Estonia!

Complete Winter Olympics results for Estonia (updated through today)

Here are the results of all of the Winter Olympics events in which Estonia has competed to date. For each event, we present the medalists and all Estonian finishers. Estonian competitors are shown in blue.

Estonian Olympic team results 2010

Estonia has so far captured one medal: the silver medal in the Ladies’ 10km Freestyle Cross-Country Skiing event, which was won by Kristina Šmigun-Vähi.

Estonian unemployment is still climbing

There were fewer jobs and more job seekers in Estonia in the 4th quarter of 2009. According to the Estonian Labor Force Survey conducted by Statistics Estonia, the country’s unemployment rate increased to 15.5% and the number of unemployed persons rose to 107,000. Both figures are record highs for the period since 1991.

Estonia’s unemployment rate remains the 3rd-highest in Europe, trailing only Latvia (22.8%) and Spain (19.5%). The 4th quarter unemployment rate across the 27-member European Union was 9.6%. Unemployment in the United States at the end of the 4th quarter was 10.0%.

As discussed in this earlier post, the job picture for young people aged 15 to 24 is particularly bad. Moreover, according to the Estonian Labor Force Survey, the number of children suffering from the effects of their parents’ unemployment is also increasing:

[M]ore and more children are in [a] difficult economic situation. The number of children (less than 18 years of age) in … jobless households was 37,000 in the 4th quarter of 2009, which is over two times more than a year ago.

The survey also asked respondents how well they were coping, and the results are sadly unsurprising: fewer than half of all respondents rated their coping as “satisfactory,” with 16% of the population (164,000 people) reporting “great difficulties” in coping.

Let’s hope things begin to turn around soon.

Kristina Šmigun-Vähi captures Estonia’s first medal of the 2010 Olympics

Kristina Šmigun-Vähi

Estonia yesterday captured its first medal of the 2010 Olympics. Kristina Šmigun-Vähi, winner of two gold medals at the 2006 Winter Olympics in Turin, claimed the silver medal in the women’s 10km freestyle cross-country event. She finished just 6.6 seconds behind gold medal winner Charlotte Kalla of Sweden.

Šmigun-Vähi’s achievement capped a significant comeback for the 32-year-old skier. She had “retired” from cross-country skiing after the 2006-2007 season in order to have a baby. She missed the past two seasons and began training for the Vancouver games only recently.

In other events Estonia has been far less successful. The country has to date participated in five events (men’s and women’s cross country skiing, men’s and women’s biathlon, and pairs figure skating), but Šmigun-Vähi can claim the country’s only competitive performance so far. Estonia will also compete in alpine skiing, ladies’ figure skating, ice dancing, and snowboarding.

The table below presents the top three finishers and all Estonian finishers in each medal event in which Estonia has competed. Estonian athletes are shown in blue.

Cross-Country Skiing – Ladies’ 10 km F (15 Feb)

78 competitors

1 (gold) Charlotte Kalla (Sweden) 24:58
2 (silver) Kristina Smigun-Vähi 25:05
3 (bronze) Marit Bjoergen (Norway) 25:14
58 Tatjana Mannima 28:13
Cross-Country Skiing – Men’s 15 km F (15 Feb)

95 competitors

1 (gold) Dario Cologna (Switzerland) 33:36
2 (silver) Pietro Piller Cottrer (Italy) 34:01
3 (bronze) Lukas Bauer (Czech Republic) 34:12
51 Aivar Rehemaa 36:13
67 Karel Tammjarv 37:38
Figure Skating – Pairs Short Program (14 Feb)

20 competitors

1 (gold) China
2 (silver) China
3 (bronze) Germany
19 Maria Sergejeva & Ilja Glebov
Biathlon – Men’s 10 km Sprint (14 Feb)

87 competitors

1 (gold) Vincent Jay (France)
2 (silver) Emil Hegle Svendsen (Norway)
3 (bronze) Jakov Fak (Croatia)
31 Indrek Tobreluts
48 Kauri Koiv
62 Roland Lessing
Biathlon – Women’s 7.5 km Sprint (13 Feb)

88 competitors

1 (gold) Anastazia Kuzmina (Slovakia)
2 (silver) Magdalena Neuner (Germany)
3 (bronze) Marie Dorin (France)
55 Eveli Saue
64 Kadri Lehtla
83 Kristel Viigipuu
84 Sirli Hanni

Estonian Olympic team gets off to a mixed start

Andrus Veerpalu

The twenty-first Winter Olympic Games in Vancouver are in only their second full day, and Estonia’s athletes have not even begun to compete, but away from the ice and the snow the Estonian team has already experienced both a victory and a defeat.

The victory came in the Parade of Nations on Friday, as Estonia caught the eyes of viewers around the world with its smartly designed outfits. An ongoing “Top Opening Ceremony Outfit” poll on the Huffington Post ranks Estonia 6th, behind the Czech Republic, Azerbaijan, Lithuania, Latvia (go Balts!), and Bermuda. The Estonian outfits were designed by Estonian fashion house Monton. Click on the image below for a better look.

So much for the victory. The defeat came today with the suspension of Estonian cross-country skier Kaspar Kokk, whose blood test revealed hemoglobin levels above the permissible limit. He will be forced to miss the opening cross-country skiing event on Monday but, subject to further testing, will be eligible to rejoin the team on Wednesday.

Estonia looks smart in the Parade of Nations (12 Feb 10, Vancouver)

Kokk’s teammates will begin competing for medals when the cross-country skiing events kick off on Monday. Estonia is a flat country accustomed to long, snowy winters, so it’s no surprise that Estonians are avid cross-country skiers. For Estonians it’s not just a sport; often, it’s a mode of transportation.

Since the country’s re-independence in 1991, all six of its Winter Olympics medals have been won in cross-country skiing events. The team hopes to continue its success this year. Andrus Veerpalu (above) won two medals in the 2002 Winter Olympics in Salt Lake City (the 15km gold and the 50km silver), and one in the 2006 Turin games (15km gold). He’ll be competing in both events this year as well and, although he just celebrated his 39th birthday, he’s considered to be a strong contender at both distances.

Read more about the outlook for Estonia’s Winter Olympic team here.

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.