Estonia busts another stereotype
Arvamus | 07 Mar 2011  | EWR
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Mar 7th 2011, 20:33 by E.L. [Edward Lucas], Eastern Approaches, Economist.com
ANDRUS ANSIP, Estonia's prime minister, is a happy man. Whatever the result of the coalition negotiations in the next few weeks, his strong showing in Sunday's parliamentary election means he is certain to keep the prime minister's post that he has held since 2005. After the eternal Jean-Claude Juncker of Luxembourg (who beats him by a decade) that makes him the longest-serving head of government in Europe. Poland's Donald Tusk is the runner-up, a few months behind.

Mr Ansip's electoral victory is remarkable given his government's record: it has pushed through an austerity programme (around 9 % of GDP) that in most countries would have had voters rioting in the streets, not queuing to re-elect their government. Estonia's economy shrank by a seventh in 2009 and unemployment rocketed to nearly a fifth of the workforce. Salaries shrank by up to a quarter in some workplaces.

But now a recovery is strongly underway, driven by sharply rising exports, chiefly to Finland and Sweden. Growth in the last quarter of 2010 was over 6%, though unemployment is still stubbornly high at nearly 14%. In January, Estonia joined the euro. It is one of a handful of countries in the euro zone (apart from Luxembourg) that actually meets the single currency's debt and deficit rules.

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