The Estonian Economy: Growth by 4.5 per cent in 2021

According to the economic forecast of the Ministry of Finance, the bottom of the crisis has been overcome and economic recovery can be expected from next year.

The economic impact of the COVID-19 outbreak in Estonia and Northern Europe will be smaller than the EU average. The impact of the crisis has been very unevenly distributed between different sectors of the Estonian economy.

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Photo by Markus Spiske on Unsplash

COVID-19 footprint in small countries

The COVID-19 footprint in small countries is of strong influence.
The information technology and communication sector was the least hit by the first wave of the coronavirus in spring, while accommodation providers, caterers and travel agents found themselves in the most difficult situation.
During the wintertime now, Estonia is entering the second wave in a vulnerable position. The most suffering sectors are responsible for 14 percent of the added value and employ every fifth worker in Estonia.

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Photo by CDC on Unsplash

2050: Climate neutral Europe

At the end of last year, the European Commission introduced the “European Green Deal” which represents a set of policy initiatives with the common aim of making Europe climate neutral in 2050. Ursula vod der Leyen, President of the European Commission stated that: “The European Green Deal is our new growth strategy. It will help us cut emissions while creating jobs.” The Commission will propose a European Climate Law which will bring new legislation on the circular economy, farming, resource-efficient building or biodiversity. The European Commission plans to invest in all sectors of economy to reach its ambitious goal to transform the EU from a high- to low-carbon economy. In September 2020 the EC launched a €1 billion call for research and innovation projects that respond to the climate crisis and help protect Europe’s unique ecosystems and biodiversity.

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Photo: Guy Bowden, unsplash

Oeconomia, the film

The creation of money and debts: The filmmaker Carmen Losmann asks the grandees of the financial world naive questions, questions that do hit the heart of our economic system: How does money come into the world? Who takes over the debts? Does an economy only grow when credits grow? Is profit only possible when people, companies or the state get into debt? Who collapses first, our ecosystem earth or capitalism? In the film, fundamental economic interrelationships are vividly presented and confirmed by prominent bankers. Citizens also have their say, who trace these connections and ask critical questions. An instructive film, which is not an educational film after all, often makes you smile – and makes you want to deal with these questions further.

Co-production of the German speaking public TV stations ZDF and 3sat, shown at the Berlinale 2020.

The film is in German with English subtitles and vice versa.

Photo: City of London, Wikimedia commons

Education for Participation

The university professor for Economic Sociology and Social Science Education, Reinhold Hedtke, discusses convictions on citizen’s participation and the civic education required for it. Among others, he takes the increasing social inequality into consideration which is probably linked to depolitisation and abstention. The „systemic tensions between democratic participation and capitalism“ are therefore also ‘on the table’. What about his consequences regarding education for participation? See the full article. Below you find the abstract.

The paper presents a critical review of key tenets of mainstream educational thinking on participation. Many approaches to education for participation tend to fall short of the state of the art of social science research on participation. Therefore, the paper calls for educational and subject didactic approaches to consider the diversity and irreconcilability of theories of participation and of models of citizenship. It aims to curb participatory enthusiasm by taking into account crucial empirical findings on the disappointing effects of increasing participation. Persistent and increasing economic and political inequality and tendencies of depoliticisation turn out to be among the main obstacles to delivering on the promise of equal opportunities for democratic participation. This brings the systemic tensions between democratic participation and capitalism to the force. Against this sceptical assessment of participation theory and the reality of political participation, the challenges, possibilities and tasks of subject didactics in the social science domain are discussed. Above all, they face a fundamental decision: to subscribe to the idea of a functionalist education for participation as a kind of social engineering via schools, or to foster critical and political thinking about participation with the aim of changing prevailing power relations in favour of the less powerful and the powerless.

Photo by Tim Mossholder on Unsplash

Polish Health System is getting better …

… but still Poland is lagging behind.

Experts from the OECD and the Observatory prepared a set of 30 Country Health Profiles, covering all EU Member States, as well as Iceland and Norway.1 Since 2000, life expectancy at birth has increased by four years in Poland, but remains three years below the EU average. According to the Report State of Health in the EU 2019, the Polish population has one of the lowest life expectancies in Europe. It is just 77.8 years comparing to the EU average of 80.9 years. No surprisingly that fewer Poles report being in good health compared to other EU countries. In 2017, only of 59 % Polish population reported perceiving themselves to be in good health, compared with two thirds for the EU as a whole.

A weak effectiveness of health system is one of many reasons for it. Poland’s health system is mainly based on the state Social Health Insurance with the Ministry of Health and local governments supervising health care services. There are some private hospitals, but their share of patients beds was just 5% in 2015. Although private hospitals tend to be more effective than public ones, their profitability depends deeply on public contracts.2 Unfortunately the public share of health care spending in Poland, both as a share of GDP and in per capita terms, is one of the lowest in Europe. This low level of funding is insufficient to provide timely access to high-quality care, particularly given rising health care needs due to population aging. In consequence the level of unmet medical care needs in Poland is higher than the EU average, as Poland faces an acute shortage of health professionals.

Photo by Camilo Jimenez on Unsplash

1 More information at:

2 More information at:

Taxes and the road to recovery

Either politicians have the courage to redistribute wealth or major conflicts are imminent. Either way, you can sometimes hear it when it comes to question who pays for the Corona pandemic and how should an economy’s recovery be done. What do economists say?

Alfie Stirling and Sarah Arnold from the New Economics Foundation explain the situation for the UK and discuss when taxes should be raised or cut. Sure is, “.. the government should not be raising taxes during a crisis. More than anything, the economy needs money in people’s pockets — especially the very poorest, who most need the cash and are most likely to spend it.” They argue against austerity which includes higher VAT and cuts. On the contrary, the best way were government investments: “A far better way to boost demand now would be direct investment by government. This could come in the form of boosting public services by increasing both pay and the number of jobs for key workers, as well as by investing in much needed green and social infrastructure — such as home insulation and electrified transport — and social housing.”

Photo by The New York Public Library on Unsplash

Corona Bonds: Yes or No?

During the Corona pandemic comes an idea ‘on the table’ again: Euro bonds. With modifications, it is currently discussed as Corona bonds. What is the idea behind? Which arguments may convince to introduce this type of common bonds? What do scientists say and who rejects Corona bonds?

“Corona bonds are feasible and important to preserve the European project. We set out a number of principles that might serve as a blueprint for the European institutions. Importantly, Corona bonds could be issued through a new public law entity and include all the safeguards required for the protection of the fundamental values of the EU.”

This is said by authors of the Leibniz Information Center for Economics who published the paper “The case for Corona bonds“.

Pierino Postacchini, on the contrary, says in his article from 16/04/2020 “Corona Bonds are not the Solution. We need faster Measures that only the ECB can Implement”. They should be implemented after the virus crisis. Read his thoughts on Brave New Europe.

However, even authors from a think-tank which is known as being more conservative argue pro Corona bonds, see the article “European instruments against the Corona crisis incomparison“.

Corona bonds are mainly rejected by the German government. Andreas Becker explains in his article “Coronabonds and the idea of European financial unity” aspects of this old EU dispute on financial solidarity.