Estonia is the economic wunderkind of the accession states. It’s a decade since the Baltic country decided to put itself through economic shock therapy and open itself to world markets by abolishing all trade tariffs, but that decision has now paid off.
Earlier this year the IMF called Estonia and its Baltic neighbours “perfect examples of small open economies”. It may be small and appear vulnerable to the global slowdown, yet Estonia’s economy has grown an average of 5 per cent annually since 1995, thanks to liberal economic policies such as a flat income tax of 26 per cent and exemption from corporate tax for reinvested profits.
These days Estonians joke that their fiscal prudence and balanced budget mean they are more qualified for the euro than Germany.
