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Europe 2020 in Estonia

The Country-specific Recommendations are documents prepared by the European Commission for each country, analysing its economic situation and providing recommendations on measures it should adopt over the coming 18 months. They are tailored to the particular issues the Member State is facing and cover a broad range of topics: the state of public finances, reforms of pension systems, measures to create jobs and to fight unemployment, education and innovation challenges, etc. The final adoption of Country-specific Recommendations prepared by the Commission is done at the highest level by national leaders in the European Council.

Country overview

Reflecting the economy’s catching-up potential, real GDP is expected to continue growing above the EU average, while public finances remain among the strongest in the EU. However, the level of potential growth in Estonia in the years ahead is likely to stay below its pre-crisis rate.

Estonia has made some progress on addressing the 2012 CSRs, notably by limiting its budget deficit to 0.3 % of GDP, further reducing unemployment, launching education reforms and investing in energy efficiency. Notwithstanding these commendable achievements, reform efforts are still ongoing, in particular in certain areas of education (tertiary, vocational education and training, and upper secondary), disability and incapacity for work schemes and the energy sector.

Some reform efforts appear insufficient, in particular given the scale of the challenges on the labour market, the fight against poverty and in the education and energy sectors. Structural unemployment is still high and competitiveness will soon be hindered by skills mismatches, a lack of qualified professionals (both blue and white collar), weaknesses in local public service provision and relatively weak innovation

2013 European Commission's recommendations for Estonia in brief

The Commission has issued five country specific recommendations (CSRs) to Estonia to help it improve its economic performance. These are in the areas of:

  1. Sustainable public finances
    While Estonia's public finances remain among the strongest in the EU, Estonia should introduce the structural budget balance rule as set out in the Treaty and complement it by more binding expenditure targets.
  2. Labour supply and demand
    Estonia has high structural unemployment, with particular problems in the North-East as well as among the low skilled. Yet, in parallel, vacancy rates are growing, reflecting the increasing skills mismatch. Estonia should better target active labour market policies to bring more people back to employment.
  3. Education, research and innovation
    Scarcity of skilled human resources is likely to remain a bottleneck for sustaining rapid growth in Estonia. Even though various initiatives to reform the education sector and foster participation in lifelong learning have been launched, particular attention should be paid to improving the labour-market relevance of education and training systems.
  4. Energy and environment
    Estonia's economy is highly energy intensive and there are visible gaps in the fields of transport and buildings that Estonia should address to improve energy efficiency.
  5. Local government reform
    Great pressure is put on public service provision by local government, which has a considerable impact on addressing structural unemployment. Access to quality services should be guaranteed to the population without differentiating where they live, in particular for child care, family support services, health care, but also for education and transport.

See how Estonia compares with other EU Member States in key areas


Commission documents