If ever a currency could claim to be appropriately named, it\u2019s the EEK, the Estonian kroon. The 400,000 residents of Tallinn, Estonia\u2019s capital city and Baltic port, might well squeak in horror \u2013 here, the average price of a two-room apartment has shot up 42 per cent in the past year. Rents have increased 14 per cent.<\/p>\n
The world\u2019s fastest-rising property prices are the result of an economic boom of 12 per cent annual growth, spurred on by a flat tax rate, a rocketing technology industry (Tallinn has been called \u201cSilicon Valley on the Baltic Sea\u201d) and a buoyant mood since joining the European Union and Nato in 2004.<\/p>\n
Newly accessible to the rest of Europe thanks to knock-down air travel \u2013 and with no restrictions on foreigners buying property \u2013 entrepreneurs and tourists are fuelling the economy of the former Soviet state, which gained independence as recently as 1991.<\/p>\n
\u201cIt is very hard for even me to remember how Tallinn looked 15 years ago,\u201d chuckles Mart Laar, 46, the affable, two times former Estonian prime minister, who is credited with pioneering flat taxes, leading economic reform and preparing his country for entry into Europe. \u201cYou can imagine a city without cars? In 1991, I was going into the centre of town from the harbour and I saw only two cars on the street. There was the lack of petrol. No colour. The city was in a very devastated mood.\u201d<\/p>\n
I meet Laar at his campaign headquarters near Toompea Castle, home to Estonia\u2019s parliament, days after the March elections that saw his Union of Pro Patria and Res Publica (IRL) party form a coalition government with three of four rival parties. Laar is between summits at the Radisson SAS hotel, where his terrifyingly young colleagues \u2013 Tallinn once boasted a 27-year-old mayor \u2013 are thrashing out the allocation of seats. Post-election, the city\u2019s mood is buoyant.<\/p>\n
\u201cBusiness people are very happy,\u201d explains Steve Roman, editor in chief at The Baltic Times. \u201cThe fact that these parties are forming their coalition makes Tallinn even more friendly to foreign business. But it\u2019s a young political system and politics here is a very populist affair. One party [IRL] promised a free laptop for every high school student. We\u2019ve yet to see if that will happen.\u201d<\/p>\n
Either way, it would seem a shrewd vote-winner. Since the 1950s, when the Soviets chose the Baltic states as the location for numerous scientific institutions and Tallinn gained its Institute of Cybernetics, \u201ce-Stonia\u201d has been one of the world\u2019s most tech-forward countries. Now it\u2019s in a race to modernity that is outstripping the rest of the West.<\/p>\n
Here, mobile phones are used to pay for parking, 95 per cent of bank transactions are done online and petrol stations come Wi-Fi enabled, so customers can check their emails after refuelling. Anyone alighting at any of the tens of caf\u00e9s in Tallinn\u2019s medieval Old Town \u2013 a UNESCO World Heritage site \u2013 without pulling out a MacBook and hunkering down to some serious virtual networking is liable to feel a perverse sort of social pariah.<\/p>\n
\u201cIn terms of information society, we are 10 times ahead of other countries,\u201d says Linnar Viik, the government advisor and professor at Tallinn\u2019s IT College, whose Jedi-like demeanour has earned him the sobriquet \u201cEstonia\u2019s Mr Internet\u201d. \u201cAs a former communist country, where corruption was an issue, the internet increases transparency. Now the leaders cannot abuse their positions.\u201d<\/p>\n
Today, Tallinn\u2019s Institute of Cybernetics houses Skype, the successful service granting free telephone calls over the internet, which has racked up 125 million subscribers in little more than three years and Playtech, which designs software for online gambling and was valued on London\u2019s Stock Exchange at close to \u20ac1bn.<\/p>\n
Here, the contrast between old and new Tallinn could hardly be sharper. Outside, a punishing Baltic wind whips around the dour, imposing Soviet block. Inside, Skype\u2019s bright young things take delivery of a 46-inch TV, Justin Timberlake plays on the stereo and a dachshund wanders around reception.<\/p>\n
\u201cWhat makes Tallinn, and Estonia in general, a special place for this kind of business is simply the lack of people,\u201d says Sten Tamkivi, Skype\u2019s 29-year-old head of worldwide operations. The first version was developed with four guys over four months. Next month, we had a million subscribers.\u201d Skype\u2019s founders sold their share of the business to eBay for \u20ac1.9bn in 2005.<\/p>\n
As the city increasingly looks west to distance itself from its past, signs of new prosperity are everywhere. Not so long ago, the central Kaubamaja (with Soviet literalness: \u201cdepartment store\u201d) boasted a wall devoted to a single style of shoe. Now it houses Chanel, Dior and Lanc\u00f4me. It has been suggested you will see more Ladas on the streets of Liverpool than Tallinn. \u201cSpending on cars increased a billion kroons last year,\u201d says The Baltic Times\u2019 Joel Alas. \u201cPeople have to have the latest thing. All the kids have nice clothes and iPods.\u201d<\/p>\n
Some suggest Estonia is on course to become one of the richest countries in Europe in the next five years. Others \u2013 like Danske Bank \u2013 say the boom is unsustainable and the economy is in danger of overheating. But Laar says he\u2019s got it all under control. \u201cEverywhere you look in Tallinn, you see cranes, new buildings starting. After 50 years of Soviet occupation, everything must be fixed. But, always, you must be careful.\u201d<\/p>\n
Still, with St Petersburg just five hours away by road and the Soviet threat refusing to recede completely \u2013 \u201cPeople talk about how, one day, Estonia will be invaded again. There\u2019s a lot of nervousness of Russia,\u201d says Roman \u2013 who could deny Tallinn a little retail therapy?<\/p>\n
\u201cUnlike the rest of the Soviet Union, Tallinn was the one place you could watch Finnish TV,\u201d says Alas. \u201cI have a friend who used to say the adverts for Mars bars looked like absolute heaven. He couldn\u2019t imagine living in a world where there were Mars bars available to buy. He\u2019s only 22,\u201d he says. \u201cIt\u2019s not that long ago.\u201d<\/p>\n
Ten takes on Estonia<\/p>\n
1.
Trusted media outlet
SL \u00d5htuleht \u2013 the biggest daily. Published in Estonian and with 250,000 readers, it recently expanded into an online news stream.<\/p>\n
2.
Best friends
Finland, Sweden and Latvia are the biggest importers of Estonian goods \u2013 but, in the West, everyone seems to like the Estonians.<\/p>\n
3.
Biggest nuisances
It\u2019s hard to say what\u2019s more annoying, Russia as a neighbour or planeloads of horny stag-weekenders flying in on discount airlines.<\/p>\n
4.
Where did all that talent go?
The trouble with booming, emerging, economies is that they have a habit of leaving local craftsmen behind as the newly rich look for Italian premium brands. Estonia has an outstanding heritage in woodworking and textiles that\u2019s worth fashioning into a luxury sector in its own right.<\/p>\n
5.
Where to watch outside Tallinn
Tartu with its grand university and red, sandy beaches.<\/p>\n
6.
Biggest P2P network
Rate.ee, a hugely-popular MySpace-a-like, is the top online destination for Tallinn\u2019s teenage caf\u00e9 culture.<\/p>\n
7.
Top export
When it comes to raising the national profile, Estonia\u2019s sharp cheekboned boys and girls get more name-checks for the nation than any of its politicians or sports teams.<\/p>\n
8.
Brands with promise
Joost \u2013 from the makers of Skype \u2013 aiming to provide a peer-to-peer approach to distributing videos online; Mobile Credit Baltic \u2013 supplier of short term loans \u2013 that recently debuted on the Alternative Investment Market; and Tallinn\u2019s Three Sister Hotel which we would like to see grow as a brand.<\/p>\n
9.
Flashpoints
Will Estonia\u2019s financial boom be sustainable? Will there be more diplomatic issues with Russia? Also, worries about corruption.<\/p>\n
10.
It would like to be\u2026
Europe\u2019s richest country and also the one that leads the way in technology \u2013 and good looks.<\/p>\n","protected":false},"excerpt":{"rendered":"If ever a currency could claim to be appropriately named, it\u2019s the EEK, the Estonian kroon. The 400,000…\n","protected":false},"author":2,"featured_media":150772,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[89],"tags":[3801,167,71183,166],"class_list":["post-150771","post","type-post","status-publish","format-standard","has-post-thumbnail","category-tallinn","tag-baltic-states","tag-estonia","tag-post-soviet","tag-tallinn"],"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@dk\/117142003866038426","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/dk\/wp-json\/wp\/v2\/posts\/150771","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/dk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/dk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/dk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/dk\/wp-json\/wp\/v2\/comments?post=150771"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/dk\/wp-json\/wp\/v2\/posts\/150771\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/dk\/wp-json\/wp\/v2\/media\/150772"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/dk\/wp-json\/wp\/v2\/media?parent=150771"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/dk\/wp-json\/wp\/v2\/categories?post=150771"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/dk\/wp-json\/wp\/v2\/tags?post=150771"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}