Structural Weaknesses as Barriers to Social Progress in Estonia

Although Estonia developed a functioning market economy, it has hardly succeeded in catching-up economically with the richer countries of the euro area. Correspondingly, the level of social security is still rather limited. To improve the income situation and enhance the social security systems it is essential to overcome the structural weaknesses of the Estonian economy, which is mirrored in the apparently low productivity level. The challenge for the Estonian policy is to create a suitable business environment to support the needed structural change.