Estonians are one of the longest-settled European peoples and have lived along the Baltic Sea for over 5,000 years. The Estonians were an independent nation until the 13th century A.D. The country was then subsequently conquered by Denmark, Germany, Poland, Sweden, and finally Russia, whose defeat of Sweden in 1721 resulted in the Uusikaupunki Peace Treaty, granting Russia rule over what became modern Estonia.
First Period of Independence
Independence remained out of reach for Estonia until the collapse of the Russian empire during World War I. Estonia declared itself an independent democratic republic on February 24, 1918. In 1920, by the Peace Treaty of Tartu, Soviet Russia recognized Estonia's independence and renounced in perpetuity all rights to its territory.
The first constitution of the Republic of Estonia was adopted in 1920 and established a parliamentary form of government. Estonia's independence would last for 22 years, during which time Estonia guaranteed cultural autonomy to all minorities, including its small Jewish population, an act that was unique in Western Europe at the time.
Leading up to World War II (WWII), Estonia pursued a policy of neutrality. However, the Soviet Union forcibly incorporated Estonia as a result of the Molotov-Ribbentrop Pact of 1939, in which Nazi Germany gave control of Estonia, Latvia, and Lithuania to the Soviet Union in return for control of much of Poland. In August 1940, the U.S.S.R. proclaimed Estonia a part of the Soviet Union as the Estonian Soviet Socialist Republic (E.S.S.R.). The United States never recognized Soviet sovereignty over Estonia, Latvia, or Lithuania.
During World War II, between 1939 and 1945, through both the Nazi and Soviet occupations, Estonia's direct human losses reached 180,000 residents, which amounted to 17% of its total population. During the Nazi occupation from 1941 to 1944, 7,800 citizens of the Republic of Estonia (70% ethnic Estonians, 15% ethnic Russians, 12.8% Estonian Jews, and 2.2% representing other nationalities) were executed in Nazi prison camps. Of the total number executed during the period of Nazi occupation, an estimated 1,000 were Estonian Jews--or roughly 25% of the pre-war Jewish population of Estonia. Additionally, an estimated 10,000 Jews were transported to Estonia from elsewhere in Eastern Europe and killed there. Soviet authorities conducted mass deportations in 1940-41, 1944 and 1949, with smaller deportations running through 1956. In total, an estimated 60,000 Estonians were murdered or deported by the Soviet Union. Another 70,000 fled to the West in 1944.
In the late 1980s, looser controls on freedom of expression under Soviet leader Mikhail Gorbachev reignited the Estonians' call for self-determination. By 1988, hundreds of thousands of people were gathering across Estonia to sing previously banned national songs in what became known as the "Singing Revolution."
In November 1988, Estonia's Supreme Soviet passed a declaration of sovereignty; in 1990, the name of the Republic of Estonia was restored, and during the August 1991 coup in the U.S.S.R., Estonia declared full independence. The U.S.S.R. Supreme Soviet recognized independent Estonia on September 6, 1991. Unlike the experiences of Latvia and Lithuania, Estonia's revolution ended without blood spilled.
Estonia became a member of the United Nations on September 17, 1991 and is a signatory to a number of UN organizations and other international agreements, including IAEA, ICAO, UNCTAD, WHO, WIPO, UNESCO, ILO, IMF, and WB/EBRD. It is also a member of the Organization for Security and Cooperation in Europe (OSCE). In May 2007, Organization for Economic Cooperation and Development (OECD) ministers invited Estonia to begin accession discussions.
After more than three years of negotiations, on August 31, 1994, the armed forces of the Russian Federation withdrew from Estonia.
Modern Period: 1990s - Today
In 1992, a constitutional assembly introduced amendments to the 1938 constitution. After the draft constitution was approved by popular referendum, it came into effect July 3, 1992. Presidential elections were held on September 20, 1992, with Lennart Meri as victor. Lennart Meri served two terms as president, implementing many reforms during his tenure. Meri was constitutionally barred from a third term. Arnold Rüütel became president in 2001, and Toomas Hendrik Ilves in 2006. Since fully regaining independence, Estonia has had 10 governments with 7 different prime ministers elected: Mart Laar, Andres Tarand, Tiit Vähi, Mart Siimann, Siim Kallas, Juhan Parts, and Andrus Ansip.
Estonia began to adopt free-market policies even before it declared independence in mid-1991 and has continued to pursue reform aggressively ever since. For example, the government set privatization as an early priority and has now completed the process of putting most major industries in private hands. After independence the Government of Estonia took steps to simplify the tax system. Tax evasion is now relatively low by regional standards. Income tax is levied at a flat rate, a principle supported by the major parties except for the Center Party, for which a progressive tax system remains a keystone policy. An integral part of Estonia's transition to a market economy during the early 1990s involved reorienting foreign trade to the West and attracting foreign investment to upgrade the country's industry and commerce. In 1990, only 5% of Estonia's foreign trade was with the developed West; only 21% of this trade represented exports. About 87% of Estonia's trade was with the Soviet Union, and of that, 61% was with Russia. Estonia's main foreign trading partners today are Sweden, Finland, Germany and others in the West. Russia's share of Estonia's trade is less than 10%.
The introduction of the Estonian kroon in June 1992, with only U.S. $120 million in gold reserves and no internationally backed stabilization fund, proved decisive in stabilizing foreign trade. For stability, the kroon was pegged by special agreement to the deutsche mark (DM) at EKR8 = DM1 and later to the Euro. The new Estonian currency became the foundation for rational development of the economy. Money began to have clear value; the currency supply could be controlled from Tallinn, not Moscow; and long-term investment decisions could be made with greater confidence by both the state and private enterprise. The central bank is independent of the government but subordinate to the parliament. In addition to its president, the bank is managed by a board of directors, whose chair is also appointed by parliament.
The fall of the Soviet Union and the rapid contraction of Estonia's market to the East during the early 1990s caused Estonia's economy to shrink 36% from 1990 to 1994. But economic reforms in Estonia and the ability of its economy to reorient toward the West allowed Estonia's economy to pick up in 1995 with 4.6% growth and 4.0% growth in 1996. Russia's financial crisis in 1999 led to a relatively small decline in GDP of 0.7%. Driven by liberal economic policies and fiscal discipline, the Estonian economy rebounded quickly and grew at an average annual rate of 8% from 2000 to 2007 (see below). The world economic crisis struck early in Estonia with the bursting of a large real estate bubble in 2007. GDP fell by 3.6% in 2008 and 14.1% in 2009, however most economists believe the economy has bottomed out and expect 0.5-1.5% growth in 2010.
In 1999, Estonia joined the World Trade Organization, adding to its previous membership in the International Monetary Fund (IMF), World Bank, and the European Bank for
Reconstruction and Development.
In November 2002, Estonia was one of seven Central and East European countries to be invited to join NATO; it officially became a member of NATO on March 29, 2004. Since re-establishing independence, Estonia has proven itself to be an excellent ally, having built a military capable of participating in ever more complex and distant military operations.
European Union (EU) accession negotiations proceeded rapidly, and Estonia joined the EU in May 2004, along with nine other countries, including its Baltic neighbors. The final decision was conditional on the outcome of a national referendum which was held in September 2003 and returned a large majority in favor of membership. Estonia joined the Schengen zone in December 2007 and hopes to accede to the Euro in January 2011.
Estonia has developed into a strong international actor, through its membership in the EU and NATO; it is a capable advocate and promoter of stability and democracy in the former Soviet Union and beyond. Estonian troops have been in Afghanistan since 2002 and were in Iraq from 2003 through 2008. It participates in the NATO training mission in Iraq. Estonia also provides peacekeepers for international missions in Bosnia, Kosovo, and Lebanon and contributes to EU battlegroups and NATO Response Force rotations. It supports democratic developments in key countries of the former Soviet Union and beyond by providing training to government and law enforcement officials as well as non-governmental organizations. It has valuable experience to offer new democracies from its own recent history, and it works hard to promote democracy, freedom, and stability worldwide.
From April to May 2007, international cyber attacks targeted government and private sector websites in Estonia, causing significant service disruptions to websites, servers, and routers linked to government, banking, media, and other resources. These highly coordinated attacks captured widespread international media attention. Estonia has taken a leadership role on cyber security within NATO, the European Union (EU), and other organizations, becoming an important player in international cooperation on cyber defense. Estonia hosts a NATO Center of Excellence for Cyber Security in Tallinn.
Information by U.S. Department of State
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