Estonia enjoys a very delicate geographic position. It is located not just in the neighborhood of Russia, which is modernizing or Westernizing with fluctuating success, but it is situated strategically on the border of two civilizations reminiscent of Samuel P. Huntington's thought-provoking article in the journal Foreign Affairs. However, Estonia has not become a borderland in the classical meaning of the term since the country belongs historically and integrally to the sphere of the so-called Lutheran-German civilization. For centuries this has blocked attempts from the East to incorporate the northern Baltics (which include Finland) into the Orthodox-Slavic Eastern civilization. In the context of conflicting civilizations, each such invasion has been not so much an ethnic matter but rather one of clashing civilizations and of a choice between two competing civilizations. In the last couple of years, Europe has once again witnessed the failure of one more Eastern assault that was launched with the signing in 1939 of the Hitler-Stalin agreement, the Molotov-Ribbentrop Pact.

History shows that in the development of a society, as in any other development, there are critical periods when deep and sudden changes take place, and crucial decisions need to be made. What makes these periods critical is that certain conditions must exist or be created at the right time. Otherwise chances for change may be lost and the results will be fundamentally different from what they could have been.

In Estonia, parties have, within a short period of time and with little trouble, assumed a dominating position in the political process.

As is generally known, the contemporary demographic situation in Estonia is fundamentally different from that of the prewar period. The autochthonous minorities who lived in the prewar Estonian Republic—Germans, Jews, Swedes, Finns, but also native Russians (living in the northern and southern areas of the Peipsi lake)—were lost after World War II together with a change of Estonia's eastern border by Soviet authorities in 1945. This left Estonia a very homogeneous country where Estonians formed some 97% of the population and where the entire population was made up of Estonian-speakers.

First Visions

During the Soviet period Estonia, like the other national republics of the USSR, lacked a foreign policy of her own. While foreign ministries did exist, they had just a symbolic function: staffed by only five or six people, they were allowed minimal cultural and trade contacts with the Western countries and limited inter-communist party ties within the Soviet bloc. They had to report to the USSR Ministry of Foreign Affairs on every move they made and served, first and foremost, as cover organizations for the KGB. Designing more substantive foreign policies in the Baltic Republics actually began before they gained independence in 1991. In 1989–1990, the emerging political parties voiced their first visions of the future of the Baltic States, which, generally speaking, boiled down to becoming sovereign democratic states, striving for friendly relations with all countries of the world. By that time, under the pressures of perestroika and glasnost, the Soviet authorities had been compelled to loosen their grip on the foreign contacts of the union republics. Those contacts, however, could not be called yet a foreign policy. They could, rather, be identified as isolated moves in the arena of international politics.

Historically there was a long-standing competition to control Estonian territory, primarily between Russia, Germany, Poland, Sweden, and Denmark, until 1710 when this area was conquered and ruled for two centuries by Imperial Russia. In the twentieth century, the only rival to Russia's (USSR's) domination over Estonia has been Germany. A Norwegian security analyst, Olav Knudsen, says correctly that the Baltic states “fall outside all other geographical and political contexts than the Russian and to some extent the German one.” As is known, Estonia was occupied by Germany in the course of the World Wars in 1918 and 1941–44. Generally speaking, the pre-1991 history of Estonia is a good case to prove that the survival of small states as independent powers is precarious, “depending on a multitude of factors over which they have little influence.”

For hundreds of years the Baltic Sea has both connected and separated the nations living on its shores. For the last fifty years the sea has been part of the Iron Curtain. However, for Estonia the formation of nation states on the shores of the Baltic has been inextricably linked with the idea of cooperation. What follows is a description of the historical background of the idea of Baltic Sea cooperation (before 1940) and some elements of its restoration in the 1990s.

General Features of Economic Development.

There are two parallel processes taking place in the Estonian economy. First, the transition from a centrally planned economy to a market economy. Secondly, the shift from external relations that are Eastern oriented to relations that are Western oriented. Both processes accelerated after the introduction of the national currency—the kroon (abbreviation EEK)—on June 20, 1992.

Changing through the Ages

Over different historical periods the Estonian economy has exhibited quite a different character in terms of its international context. To be more specific, we can mention the medieval flourishing of the free Hanseatic towns of northern Europe when Tallinn and other Estonian Hanseatic centers played an important role in trade between the east (Novgorod) and the west (basically towns of northern Germany and the Netherlands). Later, after an intervening period when Estonia was part of the Swedish Kingdom, it evolved as a western region of Tsarist Russia with its own specificity, somewhat different from the rest of Russia.

Banking in Estonia Before 1992

Under the Soviet regime Estonian banking, like banking anywhere in the Soviet Union, was controlled and managed by the Central Bank of the Soviet Union. Besides the central bank, there was a limited number of all-Union banking structures with their numerous local branches in Estonia as well as in other Soviet republics. The whole banking system was state-owned and rigidly controlled from the center.

Introduction

In the 1940–50s a totalitarian regime was established and consolidated in Estonia. Socialist society led to a new kind of social stratification and inequality. Stratification under totalitarian, socialist regimes differs from that in Western, capitalist countries. The utopian idea to create an egalitarian society turned into the creation of a hierarchically organized and heavily institutionalized society. Access to political power became the basis for social stratification. Reforms in the early 1990s have led to fundamental changes in the social stratification of Estonian society. The present social situation in Estonia (as in other former socialist countries of Eastern Europe) is characterized by the co-existence of elements of socialist and post-socialist societies, the expected marks of transition. Privatization brings about the emergence of new social strata. Therefore, the new social stratification in Estonia is now in the formation phase, and further changes are still forthcoming.

All of the sociological surveys of Estonians carried out after the Second World War have highlighted family life and children as the main values for Estonians. Family and children were also the values that survived the transition from the Soviet to the post-Soviet system, becoming even higher ranked in Estonians’ value priorities. Other rising values during the transitional period were health, close friends, self-education, and a pollution-free environment. Among those aspects suffering considerable decline were participation in social as well as in cultural activities (visiting cultural institutions, reading books, etc.), professional work, and taking care of one's own physical well-being. The rural lifestyle together with Lutheran religious values, which emphasize the family and a “good mother,” have been the main cultural orientations handed down through generations of Estonian families. Even the Soviet period with its forced industrialization, collectivization and political terror did not break this value-system but, quite the opposite, often meant that the family became a place that provided “refuge, and temporary escape” from these pressures, thereby preserving important elements of an earlier cultural orientation. Through its ideologically restricted social studies and deformed official statistics, which left people without reliable information about reality, the Soviet system managed to preserve the relatively strong impact of cultural traditions on people's behavior.

Every nation has its own history and its own way to create civic culture. The problem of civil society in Estonia is rather specific being first and foremost related to the nation's cultural development and only then with its political development. The restoration of civil society in Estonia from 1987 to 1988 is based on our own historical experience of civil initiative rather than the example of the other post-Communist countries of Eastern Europe.

Attitude towards one's past, the farewell to the communist past, has become a vital matter on the territory of the former Soviet Union. The failure of the “building of communism” project has, besides a devastated environment, left behind it a spiritual “homelessness.” For Russians, for whom communism was the path to global power, the collapse of the Soviet Union also meant a collapse of their national identity. “Look back in anger” might be the most concise way of characterizing their attitude to their history of the past seventy years. The same might be said of the other peoples of the former USSR. Sovietologists who treated the Soviet Union as one entity and placed the Baltic nations into the same category as the other “fraternal” people created insurmountable problems for an understanding of Baltic developments, and Estonian, in particular.

In General

The Estonian Center Party was founded in Tallinn on October 12, 1991, shortly after Estonia had regained its independence. The formation of political parties had begun in the country in 1988, and the Estonian Center Party, along with the Estonian Coalition Party and some other influential political forces, sprung up in the so-called second party-building wave. The main core of the party Board (11 members) and most of the rank-and-file members have come to politics via the Estonian Popular Front, and, accordingly, they have taken with them their experience and built their political credo on the programmatic views of the Popular Front. The party defines itself as a center force on the Estonian political scene. (The distribution of political forces does not yet correspond to that common in Western countries.)