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Estonia: European Commission Recognizes Rapid Progress

Prague, 16 July 1997 (RFE/RL) - The European Commission's proposal to include Estonia in first-round accession talks with the EU recognizes that country's rapid progress in implementing reforms compared to its Baltic neighbors.

European Commission assessments of the ten Eastern and Central European would-be EU members gives Estonia the best marks among the Baltic states for progress toward meeting the EU's membership criteria. The criteria include the existence of stable democratic institutions, existence of a functioning market economy, and the ability to take on EU membership obligations including eventual monetary union.

According to the commission assessments, released to the press today, Estonia's gross domestic product (GDP) is 23 percent of the EU average. That amount falls between Lithuania's 24 percent and Latvia's 18 percent of average EU GDP. But the commission gives less attention to the three countries' relative current prosperity than to their institutional readiness for integration into the EU's own economic and political structures.

The commission assessment says that Estonia, in its words, "can be regarded as a functioning market economy." It says Tallinn has liberalized foreign trade and privatized the public sector, with prices liberalized "to a very large extent." The assessment concludes that Estonia should be able to make the rapid progress necessary to cope with competitive pressures and market forces within the EU in the medium term.

But the assessment also identifies areas where Estonia, with a population of 1.5 million, must do more to increase its ability to join the EU. The report says Estonia must broaden its export base, speed land reform, and has yet to begin reform of its pension system. It also says that while Tallinn has no major problems with respect for fundamental human rights, it must accelerate naturalization procedures to integrate its Russian-speaking minority into Estonian society.

By contrast, the commission says that Lithuania and Latvia would, in its words, "have serious difficulties coping with competitive pressures within the EU in the medium term."

The commission says that Lithuania, with the Baltic states' largest population at 3.7 million inhabitants, has "stable democratic institutions" and has made "considerable progress" in creating a market economy with largely liberalized trade and prices. But the assessment says the country still needs to advance in areas including relative price adjustments, large-scale privatization and bankruptcy proceedings. The Commission also says Vilnius must modernize its agricultural sector and strengthen its banking system.

Looking at Latvia, the commission says Riga has "good democratic institutions" and has made "headway in stabilizing its economy." But its says the country of 2.5 million people needs, like Estonia, to boost the naturalization rate of its Russian-speaking non-citizens. The assessment also says that effective implementation of economic legislation in Estonia "lags", that needed regulatory bodies are not all in place, and privatization is incomplete.