Estonia and Finland

02.07.2010

- Diplomatic Relations
- Visits of importance
- Co-operation
- Significant agreements
- Economic relations
- Cultural and educational relations

Diplomatic Relations

Finland recognised Estonia in 1920 and diplomatic relations were restored on 29 August 1991. Since October 2006 the Estonian Ambassador to Finland is Merle Pajula. Finland's Ambassador to Estonia Jaakko Kalela assumed his duties in September 2005.
Estonia has five honorary consuls in Finland in Oulu, Turku, Tampere, Kotka and Mariehamn. Finland has two honorary consulates in Estonia, in Tartu and Pärnu. 

Visits of importance (2005-2010)

Co-operation

Relations between Estonia and Finland are characterised by strong historic ties. The close contacts between the two countries extend to issues concerning politics, economics, culture and many other fields. Estonia’s accession to the European Union and NATO took bilateral relations to a new level. In order to better plan future mutual co-operation between the two EU countries, ambassador Jaak Jõerüüt and former vice president of the Bank of Finland Esko Ollia compiled a report in 2003 that included proposals related to the environment, the economy, culture, science, and education. The majority of the recommendations of the report have been implemented and in June 2007 prime ministers Andrus Ansip and Matti Vanhanen decided that a new report concerning the future relations between Estonia and Finland be compiled. In 2008, a report entitled “The Co-operation Opportunities of Estonia and Finlad 2008” was compiled by Vice President of the Nordic Investment Bank Gunnar Okk and former Finnish ambassador Jaakko Blomberg, the purpose of which was to offer ideas as to how Estonia and Finland could better cope with challenges ensuing from globalisation and help each other to raise the competitive capacity of the countries. Both of the reports are available at: http://www.vm.ee/?q=et/node/199

Co-operation between Estonia and Finland in defence matters is regular and active and includes regularly occurring political and defence consultations as well as shared practical endeavours. Close co-operation has taken place in the field of defence education and military training, as well as in connection with procurements and arms control.

Good, direct relations have been established between institutions under the jurisdiction of the Ministries of the Interior and Justice. Co-operation in the prevention of crime is of considerable importance to the police, border guards and customs services. The co-operation of the Estonia-Finland anti-narcotics working group has been very successful. Co-operation has also taken place regarding reciprocal recognition of business prohibitions. As of 6 June 2009 Estonia unilaterally recognises Finland’s prohibitions, so individuals with a business prohibition in Finland cannot establish a business in Estonia, become a member of the board of a new or existing business, begin working as a self-employed person, act as a liquidator, etc.

The two countries have also developed extensive co-operation in environmental matters, where special attention is paid to ensuring the safety of the Baltic Sea environment. Estonia and Finland along with several other Baltic Sea States have made great efforts in having the Baltic Sea recognised as a Particularly Sensitive Sea Area (PSSA). In the name of improving the situation of the Baltic Sea environment, co-operation is taking place within the framework of HELCOM and the International Maritime Organisation (IMO). On 10 February 2010 a summit of the Baltic Sea states took place in Helsinki, during which the participants committed to contributing to the improvement of the Baltic Sea environment.

One condition that sets the stage for close bilateral educational co-operation is an adequate and thorough knowledge of each other’s history, and the importance of this has been confirmed by, among others, the presidents of both countries. The education ministries of both nations have expressed their readiness to advance reciprocal language instruction on all educational levels. It is possible to study Estonian in many Finnish universities (Helsinki, Turku, Tampere, and Oulu, and in the University of Eastern Finland in Joensuu). A big step was made when the professorate of Finnish language and culture was opened at Tartu University in September 2006. Based on the growth of the Estonian population in Finland, the need for Estonian-language education in Finland is growing more apparent. Previously Estonian was taught most systematically on the primary school level at Roihuvuori school in East Helsinki. In August 2008, following the example of the Roihuvuori school, a bilingual class for Estonian children was opened at Latokartano school in Helsinki. As of the fall of 2009 there were already five Estonian-Finnish classes. Finnish is taught in a few dozen Estonian high schools as an elective subject. In vocational schools, Finnish language classes are primarily found in the service curriculums. It is possible to study Finnish language and culture at Tartu and Tallinn Universities.

Estonia and Finland have developed their close co-operation further through participation in different international organisations, which have supplemented their close bilateral relations.

Significant agreements

Treaties between the two countries have been developed extensively. As of 1 May 2004, economic relations are governed by the regulations of the EU’s internal market. There are 32 bilateral agreements between Estonia and Finland, of which the following are the most significant (a complete list of agreements can be found here http://www.vm.ee/?q=en/taxonomy/term/59) :

• Agreement Between the Government of the Republic of Estonia and the Government of the Republic of Finland on the Mutual Protection of Confidential Information (came into force 5 June 2007)
• Agreement Between the Government of the Republic of Estonia and the Government of the Republic of Finland on the Reciprocal Holding of Stocks of Crude Oil and Petroleum Products (came into force 23 December 2006)
• Social Insurance Agreement (came into force 1 Nov 2006)
• Agreement on Joint Implementation Projects for the Reduction of Greenhouse Gas Concentrations (came into force 19 Jan 2004)
• Agreement on Environmental Impact Assessment in a Transboundary Context (came into force 6 Jun 2002);
• Agreement Regarding the Readmission of Persons Whose Entry or Residence is Illegal(came into force 3 Oct 1996)
• Agreement for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income and on Capital (came into force 30 Dec 1993)
• Agreement on the Promotion and Protection of Investments (came into force 3 Dec 1992) 

Economic relations

TRADE

Finland is perennially Estonia's largest trade partner. The export of Estonian goods to Finland made a great leap in 2005, growing my 50%. Export remained at a relatively high level until 2009, when as a result of the global economic crisis Estonia’s trade with Finland fell by more than a quarter. Already in 2008 the trade balance had been in a slight surplus, and in 2009 the trade balance surplus was significant (140 million EUR).

Comparing 2009 with 2008 , total Estonia-Finland trade turnover, export and import have all decreased. In 2009 total trade turnover with Finland was 2.2 billion EUR, which makes up 16.4% of Estonia’s total trade turnover. In 2009 Finland was Estonia’s primary export partner (1.2 billion EUR, or 18.6% of total export) as well as import partner (1 billion EUR, or 14.5% of Estonia’s total imports).

Major export articles in 2009:

• Machinery and equipment – 25.6%
• Other manufactured goods – 12.7%
• Metals and metal products – 10.7%

Major import articles in 2009:

• Machinery and equipment – 26.3%
• Metals and metal products – 11.6%
• Chemical products – 8.2%

All economic figures originate from the Statistical Office of Estonia

INVESTMENTS

Finland is the second-biggest foreign investor in Estonia after Sweden, with direct investments totalling around 2.5 billion euros. The most investments have been made in real estate, but also in the industry, trade and finance sectors. As before, the activity of Estonian businesses in Finland is much more modest; there are few companies with Estonian capital registered. However, the interest of Estonian entrepreneurs in the Finnish market is growing.

As of 31 December 2009, Finland had direct investments in Estonia totalling 2.58 billion EUR (22.9% of all investments in Estonia). Estonian investments in Finland as of 31 December 2009 totalled only 217 million EUR (4.8% of all investments).

TRADE ASSOCIATION AND CHAMBER OF COMMERCE

The Finnish-Estonian Trade Association (SEKY), established in 1990, comprises Finnish enterprises active in Estonia and enterprises potentially interested in Estonia. The main purpose of SEKY is to establish business contacts and to improve relations between Estonian and Finnish businesses.

The Finnish-Estonian Chamber of Commerce (FECC, www.fecc.ee) mediates business contacts and provides its members with information about the Estonian economy. In the fall of 2007 the Estonian Embassy, the Finnish-Estonian Chamber of Commerce, Enterprise Estonia and local Finnish chambers of commerce co-operated to start up a series of seminars introducing the Estonian economy entitled Verkotu Viroon. Seminars have been carried out in Tampere, Turku, Oulu, Kotka, and Helsinki; there are plans to continue holding events in other cities.

TOURISM

Finland is Estonia's most important tourism target market. In 2009 a total of 1.38 million tourists used accommodation services in Estonia, and 50.8% of them were from Finland, which means more than 750 000 Finnish tourists visited Estonia in 2009.

The number of Finnish tourists in Estonia grew significantly after Estonia joined the European Union in 2004, but in the years 2005-2007 the number decreased by about 5-6% per year. One cause of this was certainly the rise of prices in Estonia and another was apparently saturation. Regardless of the decrease in the total number of tourists in Estonia in 2008 and 2009, the number of Finnish tourists grew, which may be due to distant and more expensive vacations being replaced with closer and less expensive options. 

Cultural and educational relations

Estonia-Finland cultural ties are extremely close—the number and quality of reciprocal events introducing Estonian and Finnish culture are considerable. During 2008 the 90th anniversary of the Republic of Estonia was grandly celebrated in Finland. The events in honour of this anniversary were all joined together under the name “Estonia Comes to Visit”, within the framework of which the Estonian Embassy in Helsinki in co-operation with the Tuglas Society, Enterprise Estonia, the Estonian Institute, and the Association of Estonian Societies (Eesti Ühingute Liit) carried out Estonia-themed events in 9 Finnish cities. A project meant for school-aged children, “Estonia Goes to School”, grew out of the “Estonia Comes to Visit” events. Many notable events also took place in 2009, when the series of events “Estonia Invites” continued. In May 2009 the ninth Finland days took place in Tartu and Tartu County. Another notable feature of 2009 was Imbi Paju’s film “Sisters Across the Gulf of Finland”, which premiered on 2 November 2009 in Helsinki and 3 November 2009 in Tallinn. Another event worth mentioning was the annual St. Martin’s Day Fair (Mardilaat) that took place from 21-22 November in Helsinki; over 26 years the event has become one of the largest events promoting Estonia in Finland. The fair was visited by a record 14 000 people, including President Tarja Halonen.

The Finnish Institute, which has worked since 1994, is vitally important for the development of Finnish-Estonian cultural and economic ties, introducing Finland in Estonia, and training Finnish language teachers. The Finnish Institute has branches in Tallinn and Tartu. The idea came about to establish an Estonian House in Helsinki to support the Estonian population in Finland and entrepreneurship in Finland—the house will help to promote Estonia-Finland cultural relations, tourism, trade and economic relations and research co-operation, as well as introduce Estonia as a destination for investments. On 26 February 2010 the lease-signing ceremony for the Helsinki Estonian House took place in Suvilahti. The Estonian House (Viro-keskus) is a “new generation” Estonian House, which brings together factions that represent Estonia (Estonian Institute, Tourism Development), that promote export and obtain investments (Enterprise Estonia), and that promote Estophilia and support the adjustment of newcomers (Tuglas Socety) all under one roof.

In 2011 Tallinn and Turku are the European Capitals of Culture.