Everything You’ve Always Wanted To Know About Estonia…

The chances are that you have at least heard of Estonia, or know a little bit about it. If you have already been ‘converted’ to the Estonian experience (or better still, you are Estonian!) the following will be nothing new to you, but for the rest of us, Tallinn Property will be your guide to this unique country.

Please note all facts are true as at the time of writing, May 2011. Naturally we are open to your comments, feedback or questions as well!

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Estonia is a small country in the North of Europe. It covers an area of 45,228 km2 (17 413 sq miles) which is more than twice the land area of Wales, and slightly larger than Denmark. From an American perspective its land area is slightly smaller than New Hampshire and Vermont combined. Its capital, Tallinn, lies at a latitude of 59° 25′N, roughly the same latitude as St Petersburg, Russia, to the East, and somewhat south of Anchorage, Alaska.

Estonia is a member of the European Union and NATO and also falls within the Schengen area, meaning it has no border controls between it and other Schengen zone countries.

It shares a land border with Latvia (also in the Schengen Zone and the EU) of 343 km, and a land border with Russia of 290 km, much of which is taken up by the large freshwater Lake Peipus. It has a maritime border with its northern neighbour, Finland.

It is generally classed as one of the ‘Baltic states’, three quite different countries which all achieved independence from the Soviet Union at about the same time (see below).

The country is largely low lying, with extensive marshland areas, many of which fall under the protection of the system of national parks. There are many lakes, most of which are quite small, but the largest, Lake Peipus, is actually the fifth largest in Europe. Similarly, the coastline is dotted with approximately 1500 islands, which range in size from tiny uninhabited islets to the biggest, Saaremaa, which is larger than any offshore UK island. The south of the country is hillier, the highest point standing at 318 metres. Approximately 50 per cent of the terrain is forest covered (compare with 10 per cent of the UK).

Estonia is in the northern part of the temperate climactic zone and so does not have extremes of temperatures, though winters can be cold and snowy. It has a largely maritime climate and so is quite wet, slightly more so than London (but about half as much as Glasgow!).

Tallinn, the capital, has a population of a little over 400,000. It boasts a beautiful Old Town which is listed as a UNESCO world heritage site, and has a modern and thriving business centre as well. It is an important passenger ferry port with links to Helsinki, Stockholm and other Baltic destinations, and has a modern airport. There are several noted academic instituions in the city and many multi-national companies have a presence here. The compact nature of the city and its excellent public transport and road systems means it is easy to get around.


Estonia has a population of 1.29 million (July 2010 est.) making it one of the smallest EU member states by population, the smallest Baltic state (in both population and land area) and ranking 154 in the world by population (about the same as Mauritius). Its population density, at 29/km2 (75/sq mile) makes it one of the most sparsely populated EU member states (behind Finland and Sweden) and just slightly less densely populated than the United States! It has a negative population growth rate of -0.635 per cent  (July 2010 est.).

Due largely to the country’s location and its former status as one of the sixteen Republics of the USSR, citizens who are identified as Estonian people make up 68.7% of the population, whereas those who are identified as Russian people constitute another 25.6% of the population. Other notable ethnic groups include Ukrainian people at 2.1% and there is a small but thriving ex-patriate population, largely centred on Tallinn, which includes those not only from nearby Scandinavian and other European countries, but even as far afield as Australia or Argentina!


It has been theorized that Estonia is one of the longest continuously-settled areas in Europe; the Pulli settlement near Pärnu in the South of the country has been dated back to around 8,500 BC. However over time Estonia gradually came under the yoke of its larger foreign neighbours, starting with the Danes in the early thirteenth century, with much of the country later coming under German (via the Livonian and Teutonic knights) rule and parts of the country for brief periods under Danish and Polish occupation, before becoming part of the Swedish empire in the sixteenth century. Over this time Tallinn, or Reval as it was formerly known, became an important port and the northernmost outpost of the Hanseatic league of mercantile cities; Tartu, the second city, grew into an important university town.

The eventual collapse of Swedish rule in the region led to Estonia becoming a part of the Tsarist Russian empire in the eighteenth century. A period of national awakening followed in the nineteenth century, culminating in the country’s first period of independence in 1918. This was something of a golden age, which was cut short again by the machinations of Estonia’s more powerful neighbours; the Molotov-Ribbentrop pact carved up much of North Eastern Europe between Nazi Germany and the Soviet Union, with Estonia falling into the latter’s sphere of influence. It was formally annexed by the Soviet Union in 1940, and was occupied by Nazi Germany after its attack on the USSR in 1941. The Soviets’ eventual victory in the war meant that Estonia was re-occpied by them in 1944, becoming a constituent Soviet Republic along with the other two Baltic States, Latvia and Lithuania.

Economic stagnation in the USSR in the 1980s led to more relaxed policies and a period of economic reform under Mikhail Gorbachev, which, although this was certainly not the intention, led to the snowballing of the indepdence movement, the so-called ‘singing revolution’ in Estonia, culminating in the declaration of independence in August 1991 without a shot being fired. The country adopted its own currency, the Kroon, in June 1992. Post independence growth was extremely rapid, leading to the country being dubbed one of the ‘Baltic Tiger’ economies. Estonia was and is particularly strong in the fields of IT and technology, leading to the coining of another nickname, ‘e-Stonia’ This incudes the development of Skype technology in Tallinn. With accession to the EU and NATO in 2004 and the adoption of the Euro in 2011, Estonia is now firmly established as a modern and forward looking nation.

What language?

The official language of the country is, naturally enough, Estonian, a Finno-Ugric language quite unrelated to Latvian, Russian and indeed most European languages. Its closest relative is Finnish, with which it shares many cognates, and there are some other related minority Finno-Ugric languages spoken within the Russian federation, together with the Võru and Setu minority languages which can be found in the far South-east of Estonia itself. Hungarian is a far more distant linguistic relative.

Due to the proximity of Finland and cultural and linguistic similarities between the two countries, Finnish is understood and spoken by quite a lot of Estonians, particularly in Tallinn. For the historical reasons noted above, Russian is also widely spoken and understood, particularly by the older generation, and indeed is the first language of many residents. English is also now widely spoken, particularly by younger people. Speakers of German and Swedish can also be found here.

What’s the economy like?

Although Estonia saw a huge downturn in the recession of 2008-2010, green shoots of recovery are already in evidence according to most indicators.

Prior to the crash, the country had enjoyed growth rates of an average of 8 per cent per year, between 2003 and 2008. A rigorous policy of ‘internal devaluation’ pursued by the incumbent Prime Minister at the time of writing, Andus Ansip, meant huge cuts in the public sector, but this circumvented the need to devalue the currency against the Euro, which had been pegged to the Euro for some years. Thus Estonia was able to qualify for Euro membership having met the Maastricht criteria, and duly became the 17th country to adopt the single currency in January 2011.

The country also avoided the need for any IMF loan, unlike Latvia, Greece or Ireland. Hopeful signs for the future at the time of writing include GDP growth now showing positive values, of as much as 3 per cent for 2010 and probably nearer 4 per cent for 2011 according to some estimates. The real estate sector was naturally hugely affected by the downturn, with a huge drop in prices and the number of transactions. However the market appears to have already bottomed out (in 2010) and is starting to recover at the time of writing.

Approximately 75 per cent of the workforce is employed in the service sector, and approximately 22 per cent in industry. The remainder mostly work in the agricultural sector. The country has some natural resources in the form of oil shale, which, although scaled down from its Soviet-era production still provides approximately 90 per cent of the country’s electricity and also some bi-products with an industrial application.

Primary exports include machinery and equipment, and wood and paper, and the most important export partners are the neighbouring countries of Finland, Sweden, Latvia and Russia. The country also imports a lot of machinery and equipment, also textiles, mineral fuels and chemicals. The most significant import partners are Finland, Latvia, Lithuania and Germany.

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