Key developments and challenges

Estonia has emerged from a deep recession and confidence is returning quickly given the imminent adoption of the euro and exceptionally sound public finances. To safeguard the competitive advantages that will attract foreign investment, further reforms in the areas of education, innovation, competition policy and infrastructure are necessary.

Modernising the municipal and environmental infrastructure remains a priority. The main sources of funding include the European Union structural and cohesion funds, the private sector and where possible, commercial co-financing from local sources.

A key challenge remains the promotion of energy efficiency as well as alternative energy supplies, including renewable sources of energy, to enhance sustainability, reduce energy intensity and meet environmental targets. Important decisions will be required regarding the restructuring of oil-shale based power plants and the development of new power links to regional energy markets.