Estonia: a remarkable exception to the depressing trend

Emulating Estonia

Lowering taxes and reducing regulation work

Europe is in big trouble. Unemployment remains sky-high, and economic growth averaged a mere 1.2 percent in 2011, with some economies continuing to shrink. Estonia is a remarkable exception to the depressing trend.

One of the Baltic tigers, Estonia adopted free-market policies following the dissolution of the Soviet Union. It instituted a flat tax, free trade and liberalized markets. The Heritage Foundation ranks it 14th in the Index of Economic Freedom. The results speak for themselves. Thanks to a genuine austerity program that imposed real spending restraint, the tiny Eastern European nation’s economy grew 7.6 percent in the first quarter of this year.

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