Estonia

In its 1997 Opinion, the Commission concluded that Estonia fulfilled the political criteria. Since that time, the country has made considerable progress in further consolidating and deepening the stability of its institutions guaranteeing democracy, the rule of law, human rights and respect for and protection of minorities. Over the past year, further efforts have been made in this direction. Estonia continues to fulfil the Copenhagen political criteria.

Progress has been made in the modernisation of the public administration by moving to a more results based system and improving public access to information. Efforts have continued to modernise the legal system and improve the functioning of the judiciary through training, court reorganisation and development of I.T. systems. There is however a need to continue the implementation of the public administration reform programme, in particular to improve transparency in personnel matters and coordination across different bodies. As regards the judicial system, Estonia needs to continue to improve the efficiency in dealing with court cases whilst at the same time improving the quality and enforcement of court decisions. There is also a need to further improve citizen's access to justice, in particular by widening the availability of legal aid.

Estonia has continued to make progress with the implementation of concrete measures for the integration of non­citizens. An important positive development is the strengthening of the administrative capacity of the Legal Chancellor's office, including the establishment of branch offices in the north­eastern part of the country. Estonia should maintain the momentum of the integration process. This includes ensuring the efficiency of the naturalisation process, providing access to language training, and raising awareness of the issue across the entire spectrum of Estonian society. Estonia should ensure that the implementation of language legislation respects the principles of justified public interest and proportionality, Estonia's international obligations and the Europe agreement.

Estonia continues to address both the short and medium­term priorities set out in the 1999 Accession Partnership. Specifically, Estonia is implementing concrete measures for the integration of non­citizens including the provision of language training for non­Estonian speakers. Looking forward, meeting these priority objectives requires sustained efforts over time and continued investment of financial resources in order to build upon the positive work that has already been achieved.

Estonia is a functioning market economy. Provided that it continues with and fully implements its reform programme, it should be able to cope with the competitive pressure and market forces within the Union in the near term.

Estonia has returned to high growth and made further progress in strengthening its macroeconomic performance and stability, restructuring the enterprise sector, and in implementing structural reforms in the utilities and energy sectors. The pension reform has been adopted. The legal, institutional and regulatory framework is in place and enforcement is largely adequate.

Nevertheless, the current account deficit remains high. The labour market is highly segmented leading to high unemployment combined with labour shortages. Initiatives to improve the response of the labour market to economic growth, with a focus on improving education, training and labour market mobility, need to be developed. The restructuring of the oil­shale industry has only just started and should be accelerated. Although partly hampered by lack of effective demand in rural areas, an acceleration of land registration would benefit the functioning of land markets. Estonia must continue to focus on fiscal policy, also in order to keep the current account deficit sustainable.

Overall, Estonia has continued to make good progress in both adopting and implementing the acquis. As regards the capacity to implement and effectively enforce the acquis, Estonia has most of the necessary institutions in place. These institutions need to be further strengthened and continued efforts are required in specific sectors to further develop administrative capacity.

Concerning the internal market, progress has been made in free movement of goods in aligning public procurement legislation and adopting standards although there is still a need to harmonise sectoral legislation. For free movement of persons, new legislation now ensures the mutual recognition of professional qualifications. In competition policy there has been further alignment of legislation which is now largely in line with the acquis in anti­trust and state aid. For consumers and health protection, good progress has been made in aligning legislation with the acquis. As regards freedom to provide services, free movement of capital and company law where it was reported last year that preparations were already advanced, there has been some further progress in the alignment with the acquis. Nevertheless, attention needs to continue to be given to the fight against piracy and control of counterfeit goods.

Concerning agriculture important steps have been taken in preparing for the Common Agricultural Policy, including the partial accreditation of the SAPARD agency. Progress has also been made in the phytosanitary sector. Considerable efforts still need to be made, particularly in the veterinary field. Raising food quality standards to EU levels is still a significant challenge. In fisheries, administrative structures have been reorganised and work has continued in setting up the Vessel Monitoring System. Further work is necessary, in particular to develop the Fishing Vessels Register, in the area of market policy, and to establish the legislative framework for EC structural aid. Inspection capacity needs to be reinforced.

In transport policy, Estonia has continued to make progress in both aligning and implementing legislation. The necessary separation of accounts and the role of the railways regulatory body need to be clarified. In energy limited progress has been made. Efforts need to be made in this area particularly as regards the electricity market. Estonia also needs to further develop administrative structures and strengthen the energy market regulator.

For social policy and employment, Estonia has made good progress in terms of legal transposition. Further work is required on implementation. There is also a need to actively promote social dialogue. The business environment continues to be favourable to small and medium sized enterprise development. In regional policy some progress has been made. However, Estonia needs to substantially step up preparations for its administrative capacity to implement EC regional policy after accession.

In science and research and education and training, Estonia continues to participate in relevant EC programmes. In telecoms and IT and culture and audiovisual policy alignment of legislation is largely complete.

In the environment sector, further progress has been made in relation to both alignment and implementation of environmental legislation. Estonia needs to continue these efforts and strengthen administrative capacity, particularly at local level. Also, enforcement of environmental legislation needs to be improved.

Estonia has made further progress in justice and home affairs including the adoption of the new Penal Code. Work needs to be continued to ensure implementation of legislation, to improve internal coordination and to extend cooperation with external organisations. Particular attention should be paid to strengthening capacity to fight organised crime including drug trafficking.

In taxation, progress has been made in aligning VAT and excise duty levels. This needs to be continued. In the field of the customs union, Estonia has introduced a new Customs Code. However, there is still a need to align and effectively implement tariff and tariff­related measures. Substantial efforts are still required to develop the administrative and operational capacity to implement the acquis. Estonia must ensure interconnectivity of both its tax and customs IT systems with those of the EC.

In external relations, Estonia has made good progress but needs to further align its legislation. In common foreign and security policy, Estonia has continued to align its foreign policy with that of the EU and has participated constructively in the framework of the CFSP.

In financial control further progress has been made in implementing internal financial controls which now has to be completed. There is also a need to introduce legislation on external financial control.

Looking across all sectors, it is important to reiterate Estonia's progress in terms of the development of its administrative capacity. Estonia has continued to take steps to improve implementation and effectively enforce the acquis which should be recognised as often being more difficult, more expensive and time consuming than the transposition of legislation. As highlighted above, positive steps taken include the establishment of the unified financial supervisory authority, accreditation of the SAPARD agency, reorganisation of the fisheries administration, merger of business support foundations and the establishment of financial control departments in ministries. Specific areas to which further attention should be paid include reorganisation of the market surveillance system and reinforcing the fight against piracy and counterfeit goods, in preparations for the Common Agricultural Policy and in raising the quality of food. There is also a need for investment in compliance and enforcement in the environment sector, preparing for EC structural funds, improving coordination between law enforcement bodies, and in developing sufficient operational capacity to implement the customs acquis. Further efforts are also required in establishing the necessary administrative capacity to ensure the sound, efficient and controllable management of EC funds.

Estonia has continued to address aspects of all the short­term 1999 Accession Partnership priorities. Estonia is now tackling many aspects of the medium term priorities including those priorities in the internal market, agriculture, fisheries, transport, employment and social affairs, environment and justice and home affairs.

---

Next: Hungary
Up: Annex 1: Conclusions of the Regular Reports
Previous: Czech Republic