Estonia country brief

Introduction

Located in Northern Europe, Estonia borders the Baltic Sea and Gulf of Finland and covers an area of 45,227 square kilometres with 1.3 million inhabitants (2017). Situated on the north-eastern edge of the Baltic Sea, Estonia borders Latvia to the south and the Russian Federation to the east. The capital of Estonia is Tallinn. Estonia celebrates its National Day on 24 February.

Political overview

System of Government

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, HE Ms Kersti Kaljulaid, was elected on 3 October 2016 for a five-year term. She is Estonia's first female president, replacing Toomas Hendrik Ilves who completed his maximum two terms in August 2016. In the Estonian system, the President is elected indirectly (i.e. by parliament) and has mainly ceremonial powers. Prior to her election, President Kaljulaid served as Estonia's representative in the European Court of Auditors between 2004 and 2016.

Parliamentary elections are held in Estonia every four years. After the March 2019 parliamentary elections, the Estonian Centre Party formed a coalition government with the Conservative People’s Party (EKRE) and Pro Patria Party (Isamaa). The leader of the Centre Party, Jüri Ratas, was sworn in as Prime Minister in April 2019 (and had served as Prime Minister in the previous coalition government, with the Social Democratic Party and Isamaa, since November 2016). 

Foreign Policy

Estonia regained independence on 20 August 1991 following the dissolution of the Soviet Union. Estonia became a member of the United Nations on 17 September 1991 and Baltic Assembly in November 1991. Since then, Estonia has pursued a foreign policy of close cooperation with Western European countries and institutions. Estonia joined the IMF and Council of the Baltic Sea States in 1992, the Partnership for Peace in February 1994, WTO in November 1999, and NATO in April 2004. Estonia joined the European Union in May 2004, the Schengen Group of European countries in December 2007 and the Eurozone on 1 January 2011. Estonia has close ties with the Nordic countries, especially Finland and Sweden. In 1992, Estonia joined the Nordic-Baltic Eight. In 2005, Estonia joined the European Union's Nordic Battle Group and Estonia remains keen to become a full member in the Nordic Council.

Economic overview

According to IMF assessments, the Estonian economy has held up well since the global financial crisis. Economic growth is expected to continue, with 3.7 per cent GDP growth in 2018 and 3.2 per cent forecast for 2019. Estonia is highly dependent on trade and its banking system is dominated by cross-border banking groups, meaning that its economic fortunes are closely tied to external developments.

Estonia is often described as one of the most ‘wired’ digital-friendly countries in Europe, with significant developments in e-governance and cyber security. Estonia was the first country to permit online voting and has consistently led the way in digital signatures and online transactions since. The country is home to high-tech start-ups such as Transferwise, Bolt (Taxify) and Skype, which revolutionised telecommunications. Estonia hosts the NATO Cooperative Cyber Defence Centre of Excellence (CCDCOE) in Tallinn.

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 2016 census in Australia recorded over 9,500 people who identified as being of Estonian ancestry.

The Australian Embassy in Tallinn is Australia’s first ‘Pop-up Embassy’. Our Ambassador to Estonia operates from an office in Tallinn during April and May. Outside this period, the Ambassador visits Tallinn a number of times a year, and maintains relations via phone, video conferencing, social media and websites. Australia also has a consulate in Tallinn, headed by an Honorary Consul. Estonia is represented in Australia by an embassy in Canberra and honorary consulates in Adelaide, Hobart, Perth and Brisbane. Australia has a Working Holiday Maker arrangement with Estonia, which came into effect in May 2005. In September 2015, Australia and Estonia signed a bilateral Social Security Agreement. The agreement provides improved social security protection to people who live or work in both Australia and Estonia.

High-level visits

The Hon Michael Keenan MP, then Minister for Human Services and Minister Assisting the Prime Minister for Digital Transformation, visited Estonia in April 2018, followed by Australia’s Ambassador for Cyber Affairs, Dr Tobias Feakin, in May 2018. 

Then Minister for Foreign Affairs, the Hon Julie Bishop MP, visited Estonia in April 2017. This was followed in June 2017 by visits by Australia's Ambassador for Women and Girls, the Hon Dr Sharman Stone, and Ambassador for Cyber Affairs, Dr Tobias Feakin. Then President of the Australian Senate, Senator John Hogg, visited Estonia in October 2013. Then 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.

President Kersti Kaljulaid visited Australia in October 2018 to attend the Invictus Games in Sydney and met the Governor General, Sir Peter Cosgrove. Then Estonian Foreign Minister Marina Kaljurand visited Australia to open Estonia's Embassy in Canberra in February 2016. Then Foreign Minister Urmas Paet visited Australia in November 2011.

Bilateral economic and trade relationship

Two-way merchandise trade between Australia and Estonia is modest, valued at $160 million in 2018. Australia's exports to Estonia totalled $9.2 million, primarily consisting of gold coin and legal tender, and prepared additives for mineral oils. Estonia's exports to Australia for the same period were valued at $150 million and included wood, telecom equipment and parts, computers, and measuring and analysing instruments. Australia’s services exports to Estonia grew to $31 million in 2018. 

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 while the University of Adelaide arranges summer programs with Tallinn’s University of Technology.

For information on doing business in Estonia, see Austrade's website

Last updated: May 2019

Last Updated: 14 May 2019