Nations in Transit 2023 - Estonia

CONSOLIDATED DEMOCRACY
83
/ 100
Democracy Percentage 83.33 / 100
Democracy Score 6.00 / 7
LAST YEAR'S DEMOCRACY PERCENTAGE & STATUS
83 / 100 Consolidated Democracy
The ratings are based on a scale of 1 to 7, with 7 representing the highest level of democratic progress and 1 the lowest. The Democracy Score is an average of ratings for the categories tracked in a given year. The Democracy Percentage, introduced in 2020, is a translation of the Democracy Score to the 0-100 scale, where 0 equals least democratic and 100 equals most democratic. See the methodology.
 

Authors

  • Liisa Talving

Status Changes in 2023

  • No changes in 2023.

Executive Summary

On February 24, 2022, in the early hours of the 104th anniversary of Estonia’s independence, Russia launched a full-scale war in Ukraine. This drastically and irreversibly changed the course of developments in the region and more broadly. While Estonia faced no immediate security threat, the war triggered major social, economic, and political challenges. Despite these complex threats, Estonia maintained its status as a solid democratic nation as it approached the 2023 election year.

Estonia reacted swiftly and strongly to Russia’s invasion of Ukraine. It was among the first countries to provide military equipment in December 2021, when Russian forces were gathering on the Ukrainian border,1 and donated military aid to Ukraine equivalent to one third of its own military budget in 2022, surpassing other nations of the European Union (EU) in relative terms.2 By November 2022, Estonia’s humanitarian aid to Ukraine had reached €23.1 million, with €4.1 million coming from the public sector.3 Humanitarian organizations and volunteers played a crucial role, helping raise millions of euros to aid Ukrainians and their armed forces in the conflict areas as well as war refugees in Estonia, thereby demonstrating the remarkable capability, efficiency, and strength of Estonia’s civil society.

Moreover, the country emerged as a staunch advocate for Ukraine in the West, pushing for more military assistance to Ukraine and stringent sanctions against Russia. Estonia was the first country to officially recognize Russia’s actions in Ukraine as genocide,4 designate the Russian Federation as a terrorist regime,5 and urge other countries to follow suit. The Riigikogu, Estonia’s unicameral parliament, was the first in NATO to call for a no-fly zone over Ukraine, a total trade embargo against Russia and Belarus, and the closure of all ports and airports to Russian ships and planes.6 Despite dissensus within the EU, Estonia—together with Latvia, Lithuania, and Poland—closed its borders to Russian tourists with Schengen visas for security but also moral and political reasons.7 Estonia’s major universities restricted admission of Russian and Belarusian students.8 Overall, the country emerged as a leading voice on security matters, garnering increased attention and influence with Western allies. The efforts of Prime Minister Kaja Kallas and Estonia’s diplomatic corps had a significant influence on the Western response to Russia’s military actions.

Despite not facing an immediate military threat, Estonia encountered several challenges at home. The war in Ukraine significantly reduced Russian forces near the Estonian border,9 but simulated Russian missile attacks against Estonia served as political provocations.10 Additionally, Kremlin-led cyberattacks on state institutions and private companies occurred on a nearly weekly, if not daily, basis.11 Some of these resulted in short-term service interruptions, yet Estonia had already developed strong cyber defenses since falling victim to a 22-day spate of cyberattacks in 2007.12 The changed security situation in the region prompted the government to invest significantly in defense capabilities, with defense expenditures projected to reach 2.85 percent of GDP in 2023 and exceed the 3-percent mark for the first time in 2024,13 surpassing NATO’s membership requirement of 2 percent. Energy shortages resulting from the invasion of Ukraine highlighted the importance of pursuing energy independence and expanding renewable energy resources more widely. To address this, Estonia made large-scale investments in national and energy security, which contributed to a state budget deficit to be covered by the issue of international bonds.14 Staggering energy costs and inflation rates—among the highest in Europe15 —slowed consumption and dragged the country’s economy into recession. While Estonians generally support tightening belts for the sake of freedom, striking a balance between security and maintaining living standards remained the government’s most pressing challenge.

The invasion of Ukraine revived Estonia’s long-standing ethnic divisions, which are increasingly seen as both cultural and security concerns. With 23.67 percent of the population being ethnic Russians and 6.1 percent being Russian citizens, Estonia has one of the largest Russian diasporas in the world. When the war broke out, the number of Estonian passport applications more than doubled among Russian citizens residing in Estonia.16 However, divisions exist not only between but also within ethnic groups. Within the first year of the invasion, a quarter of Russian speakers considered Russia’s aggression in Ukraine justified,17 and more than a third oppose accepting war refugees from Ukraine.18 The government introduced various initiatives to address integration shortcomings, including transitioning the remaining Russian-language kindergartens and schools to Estonian-language education starting in 2024.19 Extensive subsidies are provided to support this plan, including financial incentives for teachers to relocate to the eastern region of Ida-Viru.20 At the same time, the government’s decision to take Russian TV channels off the air in Estonia21 and the removal of divisive Soviet-era war memorials, such as the tank monument in Narva,22 have caused frustration among local Russian speakers. The removal of the Narva tank monument was due to changes in Estonia’s criminal law, which now prohibits the public exhibition of symbols glorifying the Russian military or Russia’s invasion of Ukraine. Estonia has made efforts to provide Russian-language media content, but the war adds an entirely new context to these attempts. This has led many to rely on social media platforms as their main source of information. Tensions among Estonia’s ethnic minorities are also exacerbated by their lower socioeconomic status, making them vulnerable to cost-of-living and energy crises.

In terms of democratic development, the year brought few changes. Estonia maintained its democratic national governance, but the rise of populist political forces with illiberal views is a shared trend in the region. The year 2022 marked a brief pause in Estonia’s electoral politics, with local municipal council elections and presidential elections held in 2021, and parliamentary elections scheduled for March 5, 2023. The main competition leading up to the 2023 general elections is between the Reform Party and EKRE, with one of them likely to form the next governing coalition. The fragile security situation has bolstered Reform’s position, while EKRE has benefitted from the country’s economic challenges. The liberal Eesti 200 party also gained momentum and was expected to enter the parliament for the first time in 2023. Center, Social Democrats, and Isamaa are also expected to acquire seats, while Parempoolsed (the Right), a recent split-off from Isamaa, and the Greens are unlikely to gain representation.23

Elections in Estonia are free and fair, but Russia’s invasion of Ukraine raised concerns regarding minority voting rights. Non-EU citizens residing in Estonia may vote in local government council elections, although their turnout is typically modest. However, the possibility remains for citizens from an aggressor state to influence local-level democracy and even the election of the president in the event that parliamentary voting fails and passes to a local electoral college, which raises security concerns. Disagreement within the governing coalition regarding the revocation of voting rights for third-country citizens put the initiative on hold, but it is likely to be revisited before the next local elections in 2025. Estonian-language proficiency requirements for candidates is also likely to come up in the next local elections, given that local council sessions in the country’s eastern regions are regularly and systematically conducted in Russian.

Political corruption remains a challenge at the local level in Estonia. Despite past efforts to prevent and fight corruption, the political culture is slow to change. In 2022, several cases of bribery, mostly related to service contracts and procurements, were exposed involving numerous local politicians. Meanwhile, court hearings began in an influence-peddling case that led to the downfall of the Center Party–led national government in 2021. Additionally, first decisions were made in the high-profile money-laundering case in the banking industry that shook the Estonian and Scandinavian financial sectors several years ago and severely damaged their reputation.

At-A-Glance

Estonia’s national governance is democratic, yet the country faces challenges that fuel populist parties and deepen polarization of the society. Elections are free and fair, but Russia’s invasion of Ukraine has put a spotlight on the voting rights of Estonia’s ethnic minorities. The civic sector has strengthened, playing a crucial role in providing aid to Ukraine and helping Ukrainian war refugees in Estonia. The media operate freely, although access to Russian sources was restricted after the outbreak of war. Local democratic governance has carried a heavy load in handling the refugee influx while also addressing the needs of the local population. The country’s judicial system is effective but had to adjust to the COVID-19 pandemic challenges and heightened security concerns. Estonia continues to take steps to prevent and fight against corruption, yet uprooting the culture of political corruption is an ongoing struggle.

 
National Democratic Governance 1.00-7.00 pts
Considers the democratic character of the governmental system; and the independence, effectiveness, and accountability of the legislative and executive branches. 5.75 / 7.00
  • The year 2022 began with tensions between the partners of Estonia’s two-party governing coalition, the center-right Reform Party and left-leaning Center Party. Public dissatisfaction with soaring inflation, energy prices, the fourth wave of the COVID-19 pandemic, and looming security concerns increased the pressure on political incumbents24 and the government to address rising household costs. However, disagreements on welfare policies led to a government crisis, resulting in Prime Minister Kaja Kallas (Reform) expelling the Center Party and its seven ministers from the coalition in June.25
  • In an unusual situation for Estonia, Reform ran a minority government until it formed a new government with the Social Democrats and Isamaa after extensive negotiations.26 These three parties, previously in government together in 2015–16, held a 56-seat majority in the Riigikogu, Estonia’s 101-seat parliament, throughout the year. The coalition agreement focused on security, addressing inflation, and reforming the electricity market, and includes concessions to the conservative Isamaa, such as increasing family support benefits and transitioning to Estonian-language education in kindergartens and schools starting in 2024.27 The liberal-minded Kallas, who continued as head of government, admitted that compromises were necessary to reach this agreement.28
  • The war in Ukraine has had a profound impact on Estonia’s political landscape, intensifying the conflict between liberalism and conservativism and reigniting ethnic divisions. At the start of the year, the long-dominant incumbent Reform slipped to fourth place in opinion polls,29 facing declining popularity due to the poor handling of the COVID-19 pandemic and the energy crisis. PM Kallas also dropped from the most preferred prime minister to fourth.30 However, when Russia began its aggression against Ukraine in February, Reform’s popularity quickly recovered, with the party—and especially Kallas—demonstrating strong foreign policy and security expertise. Renowned for her significant international experience, Kallas was widely commended for her uncompromising response to Russia and strong Eastern Europe advocacy, earning titles such as “Europe’s New Iron Lady.”31 International media even speculated that she might be a strong contender for the next secretary general of NATO.32 At home, Kallas’s approval ratings doubled in just two months, restoring her position as the most popular party leader.33 All of this boosted Reform’s ratings to 28 percent by the end of the year, a significant increase from the 19 percent recorded at the beginning of 2022.34
  • Center Party, once Reform’s main opponent, experienced a significant setback as a result of the war in Ukraine. The party faced a challenging situation, torn between taking a strong stance against Russia, which could alienate its traditional voter base of Russian speakers in Estonia, and the need to maintain support from Estonian voters. Center Party’s inability to explicitly condemn the aggression35 and the controversial statements made by some of its members reduced its electoral appeal.36 Center’s reputation was further harmed by its past associations with Putin’s United Russia party.37 Although Center remained the preferred choice of Russian speakers in Estonia (40 percent), the Estonian Conservative People’s Party (EKRE) emerged as a runner-up (24 percent).38 EKRE, despite its nationalist ideology, has aligned its rhetoric with the views of the Russian minority on traditional (“family”) values and skepticism towards NATO and the EU. However, EKRE’s attempts to appeal to both Russian and Estonian voters resulted in conflicting messages since the party avoided taking a clear position on Russia’s actions,39 criticized military aid to Ukraine,40 and used immigration as a fearmongering tactic.41 Overall, EKRE has positioned itself as a protest party, attracting dissatisfied voters across various issues, from cost-of-living concerns to the green transition.
Electoral Process 1.00-7.00 pts
Examines national executive and legislative elections, the electoral framework, the functioning of multiparty systems, and popular participation in the political process. 6.50 / 7.00
  • Russia’s war in Ukraine reactivated the debate in Estonia over the voting rights of Russian—and to a lesser extent Belarusian—citizens. While an estimated 315,242 Russian (24 percent) and 11,605 Belarussian (0.9 percent) nationals reside in Estonia, only a fraction hold citizenship (81,691 Russians and 2,707 Belarussians).42 Non-EU citizens residing in Estonia may vote only in local government council elections,43 and their electoral turnout is generally low. In 2021, the votes of Russian and Belarusian citizens made up only 0.98 percent of total votes cast.44 However, in regions with a sizeable non-Estonian population, such as Ida-Viru County, where 73 percent of inhabitants are ethnic Russians, the votes of Russian and Belarusian citizens can have a greater impact.
  • Concerns were raised during the year over potential security threats posed by the voting rights of citizens from an aggressor state, since choices in local elections may affect Estonian democracy, including the election of the head of state—“a process which passes to a local electoral college if voting at the parliament proves inconclusive.”45 Russians in Estonia also exhibit distinct attitudes, with lower levels of trust in the country’s institutions46 and greater skepticism towards NATO and EU membership.47 In polling during the summer, 27 percent of Estonia’s Russians considered the aggression in Ukraine justified, compared to just 2 percent among Estonians.48 The governing parties Reform and Isamaa proposed two separate bills to revoke the voting rights of Russian and Belarusian citizens in Estonia in local elections, but Chancellor of Justice Ülle Madise49 and President Alar Karis50 deemed the bills unconstitutional. Madise further said that she will challenge the statute in the Supreme Court if the draft passes the government.51 Although the initiative to revoke voting rights for third-country citizens was not pursued due to disagreement within the coalition,52 it is likely to resurface before the next local elections in 2025.
Civil Society 1.00-7.00 pts
Assesses the organizational capacity and financial sustainability of the civic sector; the legal and political environment in which it operates; the functioning of trade unions; interest group participation in the policy process; and the threat posed by antidemocratic extremist groups. 6.25 / 7.00
  • Russia’s invasion of Ukraine in February had a profound impact on Estonia’s civic sector. Within two days of the war breaking out, a series of large-scale protests erupted in the country’s major cities to express solidarity with Ukraine. The protest in Tallinn’s Freedom Square, which attracted approximately 30,000 participants, marked the biggest demonstration in Estonia since the dissolution of the Soviet Union.53 Throughout the year, smaller protests and pickets continued, including outside of the Russian Embassy,54 and there were also antiwar protests organized by local Russians.55
  • Humanitarian organizations and volunteers played a crucial role in helping Ukrainians in conflict areas and war refugees arriving in Estonia. Both newly founded and established nongovernmental organizations (NGOs) launched donation campaigns and fundraisers with diverse purposes. These initiatives ranged from delivering vehicles, medical supplies, and military equipment to Ukraine, to transporting and helping Ukrainian citizens and families settle in Estonia.56 The Estonian people and private companies showed extraordinary enthusiasm and unity by donating millions of euros to these initiatives.57
Independent Media 1.00-7.00 pts
Examines the current state of press freedom, including libel laws, harassment of journalists, and editorial independence; the operation of a financially viable and independent private press; and the functioning of the public media. 6.25 / 7.00
  • In 2022, the media sector in Estonia faced a radical development sparked by Russia’s invasion of Ukraine. To combat the spread of disinformation, Estonia blocked Russia’s state news agencies. Following the start of the war, the Consumer Protection and Technical Regulatory Authority (TTJA) ordered Estonian telecommunications companies to halt the broadcasting of one Belarusian and five Russian TV channels on Estonian territory for a year for violating regulations against incitement to commit crimes, undermining national security, and posing threats to public security.58 This led to a sharp decline in the viewership of Russian channels among Estonia’s Russian-speaking population, who had previously relied on these outlets for daily news coverage.59 Estonia has two radically different language-based information spaces, and prior to these bans, an estimated 100,000 Russian speakers lived in an “information bubble” dominated by Kremlin-originated TV channels.60 Additionally, later in the year, several Kremlin-controlled online outlets, including the state-owned news agency Sputnik61 known for publishing disinformation,62 were blocked.63 However, the decision to block these sites drew criticism as potentially being emotionally driven, raising legal concerns regarding the definition of war propaganda and the selective closure of certain channels.64
  • Simultaneously, efforts were made to revive Estonian Russian-language media and provide balanced content in that language. State funding was given to Estonian Public Broadcasting for its Russian-language portal,65 as well as to private media publications.66 Existing Russian-language editorial offices in Estonia were rejuvenated.67 As a result, viewership of Estonia’s Russian-language outlets increased in 2022. Public Broadcasting’s Russian-language channel ETV+ achieved record-high audience shares in May 2022 at 3.1 percent, compared to 2 percent a year earlier.68 An estimated 52,000 viewers tune in to watch its evening news shows.69 However, an estimated 31 percent of non-Estonians still do not consider Estonian TV channels as their most significant information source, along with 44 percent who say the same thing about Estonian news portals. Nearly half (46 percent) do not trust Estonian media’s information about the war in Ukraine.70 Many Russian speakers have turned to social media platforms, such as Facebook and VKontakte, for their news. Among them, the Russian-language Facebook group “Таллиннцы” (Tallinners) gained popularity, with nearly 50,000 members. It is led by Oleg Besedin, who has drawn the scrutiny of the Security Service in recent years.71
  • A worrisome incident took place in May when the Harju County Court decided to fine two investigative journalists from the major newsweekly Eesti Ekspress for disclosing pretrial information in an article about alleged money laundering at Swedbank. Ekspress Meedia, which publishes Eesti Ekspress, was also fined.72 The State Prosecutor’s Office faced widespread criticism for its interference with the freedom of the press by mandating that only preapproved information be published.73 Although the second-tier Tallinn District Court annulled the fines, the State Prosecutor requested their reinstatement.74 The Supreme Court will now review the matter.
Local Democratic Governance 1.00-7.00 pts
Considers the decentralization of power; the responsibilities, election, and capacity of local governmental bodies; and the transparency and accountability of local authorities. 5.75 / 7.00
  • The greatest challenge for local governance in Estonia in 2022 was managing the migration influx resulting from the war in Ukraine. By the end of the year, Estonia had taken in more than 115,000 war refugees, comprising more than 8 percent of the country’s total population. Of these, more than 60,000 stayed in Estonia, while the rest continued their journeys to other destinations.75 Temporary protection and social benefits, available to Estonian residents, were provided to refugees, placing a significant strain on Estonia’s social system. Local governments were responsible for arranging housing, social benefits, and integrating children into the education system, since a considerable proportion of those who entered Estonia were minors.76 Despite receiving supplementary funds from the state budget to cover these expenses,77 local governments struggled to accommodate the increased demand for school and kindergarten. To address the situation, the capital city Tallinn, which received nearly half of all war refugees (roughly 3 percent of its population78 ), opened a new school with state support to cater specifically to the needs of Ukrainian children.79
  • The war in Ukraine highlighted ideological differences in local-level politics. Several Russian-speaking officials expressed views that, at best, contradicted Estonia’s strong pro-Ukrainian stance.80 Municipalities with a high proportion of Russian minorities attempted to balance support for Ukraine while avoiding tensions with local Russians. Those in Ida-Viru County hesitated to comply with the government order to remove Soviet monuments.81 After weeks of deliberation, the Narva local government initially decided to remove a controversial tank monument82 but later backed down due to fears of public conflict, leaving the responsibility for taking action to the national government.83 The question of monument removal is a sensitive issue in Estonia since past attempts, such as the relocation of the Soviet World War II “Bronze Soldier” statue in Tallinn in 2007, led to several nights of rioting.84 Although monument removal this time around was relatively peaceful, the central government’s intervention in local matters risked creating resentment in the regions, where political trust is already low.
  • Isamaa pushed during the year for amendments to the Election Act, requiring Estonian-language proficiency from candidates in the upcoming local elections.85 Similar requirements were previously in place from 1998 to 2001 but were later abolished amid international pressure.86 Language concerns also emerged regarding elected officials. In the eastern city of Narva, council sessions are regularly and systematically held in Russian, which potentially conflicts with the constitution.87
Judicial Framework and Independence 1.00-7.00 pts
Assesses constitutional and human rights protections, judicial independence, the status of ethnic minority rights, guarantees of equality before the law, treatment of suspects and prisoners, and compliance with judicial decisions. 6.50 / 7.00
  • Estonia’s justice system has faced new challenges in the turbulent recent years. The administrative court had to address various issues related to coronavirus restrictions, including their classification as general or individual acts, the process and flexibility of filing complaints, the extent of judicial protection when a restriction is found to be disproportionate, and considerations regarding the epidemiological situation.88 Nearly 60 individuals and three companies filed complaints with the first-tier Tallinn Administrative Court, stating that coronavirus restrictions violated their constitutional rights. While the administrative court upheld these complaints, the Supreme Court ruled that the regulations did not excessively infringe on basic rights, the law was not ambiguous, and the government acted within its legal powers under Estonian law.89 This means that decisions by the administrative court on the restrictions may be appealed. The government plans to file an appeal, claiming that the restrictions were necessary to contain the spread of the deadly virus and remained within the bounds of strict necessity.90
  • Russia’s attack on Ukraine prompted changes in Estonia’s criminal law. Amendments were introduced to the penal code making it a punishable offense to join the armed forces of a foreign power involved in an act of aggression or to provide financial support for such acts. The public display of symbols glorifying the Russian military or Russia’s invasion of Ukraine are also prohibited.91 As a result, Estonia expelled or issued entry bans to several individuals considered “Kremlin provocateurs,” who were deemed a threat to public order and national security.92 These people, mostly Russian citizens, were accused of inciting national hatred, spreading Kremlin propaganda and misinformation, justifying Russian aggression in Ukraine, and attempting to donate drones to the Russian army for use against Ukraine.93 Furthermore, several Russian diplomats were expelled and declared personae non gratae for undermining Estonia’s security and spreading propaganda, leading to the closure of two consular offices.94 Additionally, a legal amendment was initiated to revoke gun rights from Russian and Belarusian citizens.95
Corruption 1.00-7.00 pts
Looks at public perceptions of corruption, the business interests of top policymakers, laws on financial disclosure and conflict of interest, and the efficacy of anticorruption initiatives. 5.00 / 7.00
  • During the year, Estonia continued to take steps to prevent and fight corruption. In 2021, the government adopted the Good Practice in Communicating with Lobbyists, which requires public offices to disclose meetings with lobbyists.96 However, the regulation only applies to officials and not politicians, leaving room for businesses to lobby political decision-makers. In 2022, it was exposed that lawmaker Kalle Palling (Reform) had engaged in a conflict of interest by advocating for legislative changes benefitting the ride-hailing platform Uber while holding an influential position in the parliament.97
  • In 2021, the Ministry of Justice drafted amendments to the Political Parties Act to strengthen oversight of party financing. The bill proposes to extend the powers of the monitoring body for party financing (ERJK), update rules on illicit donations, and enact a series of smaller changes that would help the ERJK to determine the origins of party finances.98 Political parties in Estonia heavily rely on donations, especially during electoral campaigns and often from prominent entrepreneurs,99 which creates opportunities for corruption. Financing scandals and questionable funding have undermined the credibility of parties and raised questions over their political independence. However, the bill has faced delays within the Ministry of Justice, with the current minister viewing it as a “second-rate topic.”100
  • Instances of corruption persist in local governments, as demonstrated by several cases uncovered in 2022, signaling the slow pace of change in the political culture. Local-level corruption often involves local politicians taking bribes in exchange for service contracts and procurements. The largest case during the year involved 17 suspects in the eastern town of Kohtla-Järve.101
  • Hearings began in 2022 in the corruption case over alleged influence peddling in the capital city real estate development Porto Franco, which led to the fall of the previous government in early 2021.102
  • Extensive investigations continued in the high-profile financial corruption case that surfaced in 2018–19 revealing money laundering amounting to €230 billion in the Tallinn branches of three Nordic banks. The scandal damaged the reputations of the Estonian and Scandinavian financial sectors. Danske Bank’s branch in Estonia was closed, while Swedbank’s former board members faced suspicions of money laundering.103 Recent data leaks also suggest potential links between the Baltic branches of Luminor, another Nordic bank, in moving money from suspicious sources.104 In December 2022, Danske Bank pleaded guilty to bank fraud in Estonia and agreed to forfeit $2 billion as part of a settlement.105 However, former CEOs of both Danske and Swedbank were acquitted in separate civil suits.106

Author: Liisa Talving, PhD, is a Research Fellow in Comparative Politics at the Johan Skytte Institute of Political Studies, University of Tartu, Estonia. Her primary areas of research include electoral studies, voting behavior, and public opinion.

Footnotes