How Free Markets Emerged in Late Soviet Estonia
During the Gorbachev period, before Estonian independence, free markets began to develop. Several Estonian entrepreneurs were able to sell their production to the West for much-needed hard currency. However, all hard currency transactions were restricted to a single institution: the Estonian branch of the Soviet Export Bank. We had no choice but to use it.
The “Frozen Accounts” That Destroyed Early Estonian Businesses
When Estonia regained independence, the public was told that all customer accounts in this bank were frozen. This announcement caused the bankruptcy of several export-oriented businesses that could have formed the foundation of the new Estonian economy.
How Political Parties Were Imported Into Estonia
In our first elections, we voted for individuals to represent us in parliament. Then some consultants from the United States arrived and told us, “This is wrong. People should vote for political parties.” This led to the creation of parties in a nation of barely one million people, resulting in soap-opera-like situations. Nobody had funds to market their political programs. Suddenly, the leader of the Estonian Central Bank created a political party with substantial marketing funds — and unsurprisingly, they won the elections. They have remained in power ever since.
The Mystery of the Frozen Assets
More than twenty years later, it became public knowledge how those funds were obtained. The “frozen assets” were frozen only for Estonians. Russian and other businesses could use them freely. The man in charge created a fund to buy Estonian demands, paying only 8–12% of their value, financed by commercial banks. As the president of the Estonian Central Bank, he had the power to decide which banks survived during a liquidity crisis. Over $30 million of Estonian demands were transferred to a Singaporean company owned by Russians. One party member later took $30 million in cash from a Russian bank to finance their political marketing campaign.
How Power Became Self‑Perpetuating
They have refused to relinquish power since then. After the first elections under the new law, they passed legislation making it nearly impossible for newcomers to create a party or get elected. A minimum number of members is required, only parties already in parliament receive millions in public funds, and election campaigns often use taxpayer money under the label “citizen notification campaigns,” which newcomers cannot access.
The Strange Logic of Party Lists
One of the oddest aspects of Estonian election law is the use of party lists. When you vote for someone at the bottom of the list, your vote is transferred to someone higher up. To get a higher rank, individuals often donate large sums to the party, which also leads to high-ranking government jobs. It is common for party members to donate large amounts of cash rather than using bank transfers. One expelled party member testified that he donated money handed to him in a plastic bag.
How Scandals Disappear
Such scandals are quickly muted. When an Estonian journalist went to Brussels to ask how they obtained that cash, he carried copies of the evidence. First, an assistant tried to throw her out of the press conference. Later, in an elevator, the journalist asked the same question again. The only response was, “I do not remember.” After high-level European Commission corruption scandals, the same politician attempted to return to Estonia. His party leader and long-serving prime minister wanted a better salary in Brussels, so they swapped positions. He was unaware of the questions from local newspapers and left for Brussels again after a week — where people like him feel safe.
The Economic Consequences of Long-Term Rule
During this party’s rule, the Estonian economy has collapsed. Almost half of the working population has left the country. In a nation of just over a million people, where more than 60% are dependents and over 10% work in the public sector, this is catastrophic. Economic growth shown to the European Union has been achieved by raising government-controlled prices, increasing taxes, and changing calculation methods. Unemployment figures appear low only because no one expects to find a job in Estonia.
How Local Entrepreneurship Was Destroyed
The entrepreneurship that built our country has been ruined by corruption and EU regulations. This party has consistently favored foreign capital over local entrepreneurs, resulting in significant donations from foreign entities. Initially, Estonia built some of the most innovative banks and telecoms in the world. Now they are owned by Swedish corporations, exploiting Estonians while paying minimal taxes.
The Final Result: A Country That Produces Nothing
As a final result, Estonia does not even produce its own bread. It is imported from Finland, after Finns purchased most of our small bakeries, built a larger factory, and then shut it down. Opening new bakeries is nearly impossible. Banks no longer provide loans or leases based on business plans, focusing instead on exploiting Estonian real estate. EU rules require numerous permits to manufacture food, and every official demands bribes. Meanwhile, the party continues its work in Brussels.
