Geography
Estonia, officially the Republic of Estonia (Estonian: Eesti or Eesti Vabariik; older English: Esthonia; Germanic languages: Estland; Finnish: Viro), is a country in Northern Europe. Estonia has land borders to the south with Latvia and to the east with Russia. It is separated from Finland in the north by the Gulf of Finland and from Sweden in the west by the Baltic Sea.
Estonia has been a member of the European Union since 1 May 2004 and of NATO since 29 March 2004.
The Estonians are a Finnic people closely related to the Finns, with the Estonian language sharing many similarities to Finnish.
The modern name of Estonia is thought to originate from the Roman historian Tacitus, who in his book Germania (ca. AD 98) described a people called the Aestii. Similarly, ancient Scandinavian sagas refer to a land called Eistland. Early Latin and other ancient versions of the country's name are Estia and Hestia.
Estonia lies on the eastern shores of the Baltic Sea immediately across the Gulf of Finland from Finland on the level northwestern part of the rising east European platform between 57.3° and 59.5° N and 21.5° and 28.1° E. Average elevation reaches only 50 meters (164 ft) and the country's highest point is the Suur Munamägi in the southeast at 318 meters (1,043 ft).
Oil shale (or kukersite) and limestone deposits, along with forests which cover 47% of the land, play key economic roles in this generally resource-poor country. Estonia boasts over 1,400 lakes. Most are very small, with the largest, Lake Peipus, (Peipsi in Estonian) being 3555 km² (1372 sq mi). There are many rivers in the country. The largest are the Võhandu (162 km), Pärnu (144 km), and Põltsamaa (135 km). Estonia also boasts numerous bogs, and 3794 kilometers (2,357 mi) of coastline marked by numerous bays, straits, and inlets. The number of islands and islets is estimated at some 1,500. Two are large enough to constitute their own counties: Saaremaa and Hiiumaa.
Economy
 Estonia is a member of the European Union and its economy is rated as "high income" by the World Bank.
In June 1992, Estonia replaced the ruble with its own freely convertible currency, the kroon (EEK). A currency board was created and the new currency was pegged to the German mark at the rate at 8 EEK for 1 DEM. When Germany introduced the euro, the peg was changed to 15.64664 kroon for 1 euro. Shortly after accession to the European Union the parity was changed to 15.64660 kroon per euro. The Estonian government finalized the design of Estonia's euro coins in late 2004, and is now intending to adopt the euro as the country's currency in 2010, later than planned due to continued high inflation.
In 1994, Estonia became one of the first countries in the world to adopt a flat tax, with a uniform rate of 26% regardless of personal income. In January 2005 the personal income tax rate was reduced to 24%. A subsequent reduction to 23% followed in January 2006. The income tax rate will be decreased by 1% annually to reach 18% by January 2011.
In 1999, Estonia experienced its worst year economically since it regained independence in 1991, largely because of the impact of the August 1998 Russian financial crisis. Estonia joined the WTO in November 1999. With assistance from the European Union, the World Bank and the Nordic Investment Bank, Estonia completed most of its preparations for European Union membership by the end of 2002 and now has one of the strongest economies of the new member states of the European Union, which it joined on 1 May 2004.
Since January 1, 2000, companies have not had to pay income tax on re-invested income. However, tax is due on profit distributions (including hidden distributions) at a rate of 22%. Despite the fact that only the moment of taxation was shifted from earning profits to their distribution, leaving the rest of the corporate taxation system mostly unchanged, the current legislation is said to be in violation of one of the fundamental freedoms of the European Union — free movement of capital. Estonia is to remove this hindrance by January 2009 when the temporary derogation expires, though Estonia has an option at that point to institute a very low corporate income tax, either 10%, or even 0%.
The Estonian economy is growing quickly, partly due to a number of Scandinavian companies relocating their routine operations to the country and Russian oil transit using Estonian ports. Estonia has a strong information technology (IT) sector, partly due to the Tiigrihüpe project undertaken in the 1990s, and has been mentioned as the most "wired" country in Europe. Its GDP PPP per capita is at $21,860, the highest of the Baltic states, while its unemployment rate was 4.2% in July 2006, one of the lowest in the European Union.
Although the annual GDP growth rate in 2006 amounted again 11.4%, some of the leading financial institutions and rating agencies (Danske Bank, S&P) expressed serious concerns about possible overheating syndromes of the booming economy. A number of the main economic indicators (e.g. inflation at the 4.5%, significantly negative trade balance and private credit level) partly support this opinion.
Demographics
Linguistically, Estonian is closely related to the Finnish language. Estonians, as an ethnic group, are a Finnic people. Indigenous Estonian-speaking ethnic Estonians constitute nearly 70% of the total population of about 1.3 million people.
First and second generation immigrants from various parts of the former Soviet Union (mainly Russia) comprise most of the remaining 30%. The latter, mostly Russian-speaking ethnic minorities, reside predominantly in the capital city (Tallinn) and the industrial urban areas in northeastern Estonia (Ida-Virumaa county). There is also a small group of Finnish descent, mainly from Ingria.
A significant part of indigenous Baltic Germans left Estonia during the early 1920s, after land reforms and even dispossessions had taken place. But the majority of Baltic Germans left the country in late 1939, after Nazi Germany and USSR had agreed to assign Estonia into the Soviet 'sphere of influence' in the Molotov-Ribbentrop Pact. Historically, large parts of Estonia’s north-western coast and islands have been populated by an indigenous ethnically Swedish population called rannarootslased ("coastal Swedes"). The majority of Estonia's Swedish population fled to Sweden in 1944, escaping the advancing Soviet Army. Only a few hundred Swedes remained.
The country's official language is Estonian, a Finno-Ugric language which is closely related to Finnish. It has been influenced by German, and like Finnish contains many Swedish words. Russian is also widely spoken as a secondary language by thirty- to seventy-year-old ethnic Estonians, because Russian was taught as a compulsory second language during the Soviet era. Many younger Estonian people can speak English, having learned it as their first foreign language. Some Russians residing in Estonia do not speak Estonian, but many of those who remained after the collapse of the Soviet Union have begun to learn it. Most common foreign languages learned by Estonians are English, Russian, German, Swedish, and Finnish.
Religion
According to the most recent Eurobarometer Poll 2005, 16% of Estonian citizens responded that "they believe there is a god", whereas 54% answered that "they believe there is some sort of spirit or life force" and 26% that "they do not believe there is any sort of spirit, god, or life force". This, according to the survey, would have made Estonians the most non-religious people in the then 25-member European Union. Historically, however, Estonia used to be a stronghold of Lutheranism due to its strong links to the Nordic countries.
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