Economic recession and changes in the Estonian welfare state: An occasion not to waste a good crisis

Abstract

The chapter analyses political and policy processes during the last economic recession (2008-2011) in Estonia. The authors reconstruct the events in policy process concentrating on the family, health, pensions, and unemployment policies. The authors conclude, that the economic crisis passed quite peaceably in the country although in objective terms Estonia suffered from one of the worst economic downturns and one of the harshest increases in unemployment in Europe. Although the government followed a rather inflexible budgetary policy, the same political coalition retained position also after elections in 2011. It might be explained by the goals achieved during the period-Estonian managed to use the recession to fulfil the accession criteria to the Euro zone-a long-term and publicly acknowledged development goal of a country. Another surprising fact is that the objective cutbacks in social protection were rather marginal. There were no substantial increases either. The policy makers managed to find a balanced way between cuts and protection, supported by the general public in order to enter the Euro zone.