This document discusses Estonia's economic performance during the European debt crisis as compared to Finland and the EU average. It shows that while Estonia's GDP declined sharply during the crisis years from 2008-2009, it recovered more quickly than Finland and has seen strong GDP growth since 2010, outperforming the EU average. The document attributes Estonia's recovery in part to structural economic changes during the crisis as well as support from EU funds, though it notes that Estonia's economy is different now than it was prior to the 2007-2009 crisis.

1. Estonia and the European Debt Crisis
kaido vestberg
MI Finland Consultants Meeting
June 26th, 2015 Tallink SPA Conference Hotel Tallinn

2. Economical crises tend to have Wshape - CHW 1998

3. Real GDP Growth Rate – Volume / Eurostat
-20.0
-15.0
-10.0
-5.0
0.0
5.0
10.0
15.0
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Estonia
Finland
EU (28)
Gross domestic product (GDP) is a measure of the economic activity, defined as the value of all goods and services produced less the value of any goods or services used in their creation. The
calculation of the annual growth rate of GDP volume is intended to allow comparisons of the dynamics of economic development both over time and between economies of different sizes. For
measuring the growth rate of GDP in terms of volumes, the GDP at current prices are valued in the prices of the previous year and the thus computed volume changes are imposed on the level of
a reference year; this is called a chain-linked series. Accordingly, price movements will not inflate the growth rate.

4. Real GDP Growth Rate – Volume / Eurostat
-20.0
-15.0
-10.0
-5.0
0.0
5.0
10.0
15.0
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Estonia
Finland
EU (28)
Gross domestic product (GDP) is a measure of the economic activity, defined as the value of all goods and services produced less the value of any goods or services used in their creation. The
calculation of the annual growth rate of GDP volume is intended to allow comparisons of the dynamics of economic development both over time and between economies of different sizes. For
measuring the growth rate of GDP in terms of volumes, the GDP at current prices are valued in the prices of the previous year and the thus computed volume changes are imposed on the level of
a reference year; this is called a chain-linked series. Accordingly, price movements will not inflate the growth rate.

5. We had clear objectives to reach 

6. New York Times columnist / the Nobel-winning
economist Paul Krugman:
„poster child for austerity defenders“
Estonian president hammers Paul Krugman on Twitter,
Washington Post June 7, 2012
Estonian President Toomas Hendrik Ilves:
„smug, overbearing & patronizing“

7. John Maynard Keynes
1883 - 1946
Milton Friedman
1912 - 2006

8. Austerity or not?

9. Keynesian Finland?
http://www.tradingeconomics.com/finland/government-budget

10. General government debt, 2013 and 2014 (¹) (general
government consolidated gross debt, % of GDP)

11. Estonia had the EU's worst year for unemployment, which
rose from 3.9% in May 2008 to 15.6% in May 2009.

12. The same liberal democratic party Reformierakond
in the government last 15 years

13. We are close to the top 2007 year, but
economy is different today
• Less investments (30%-98%), today reached 60% level
• Household has decreased 22%, today 11%
• Governmnet expenditure decreased only 6%
• During the crises import has decreased 40% and
export 20%, now export is 30% and import 10% higher
compared to year 2007
https://mlauri.wordpress.com/2013/09/18/kuidas-kriis-majandust-muutis/

14. During last 10 years export has
grown more than 4 times

15. Structural changes
Decreased sectors
• Construction – 20%
• Trading and logistics – 22%
• Finance – 30%
Increased sectors
• Industry +9%
• ICT +12.5%
• Real estate
• Public sector
https://mlauri.wordpress.com/2013/09/18/kuidas-kriis-majandust-muutis/

16. „Estonia only managed to overcome
the serious 2007-2009 crisis thanks
to well-timed funds from the EU“

18. EU net budget transfers – paid and received 2004-2012 (bn EUR)
http://www.lza.lv/images/Baltic/Varblane.pdf

20. What got us here won’t take us there
We need paradigm shift