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Summaries of EU Legislation

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Commission Opinion [COM(97) 2006 final - Not published in the Official Journal]Commission Report [COM(98) 705 final - Not published in the Official Journal]Commission Report [COM(99) 504 final - Not published in the Official Journal]Commission Report [COM(2000) 704 final - Not published in the Official Journal]Commission Report [COM(2001) 700 final - SEC(2001) 1747 final - Not published in the Official Journal]Commission Report [COM(2002) 700 final - SEC(2002) 1403 - Not published in the Official Journal]Commission Report [COM(2003) 675 final - SEC(2003) 1201 - Not published in the Official Journal]Treaty of Accession to the European Union [Official Journal L 236 of 23.09.2003]


In its Opinion of July 1997 the European Commission expressed the view that Estonia had made good progress with industrial restructuring and the adoption of EU industrial legislation. Provided that current efforts and foreign capital inflows were continued, only very limited problems need be expected for industrial competitiveness in the medium term, which should not be an obstacle to full participation in the enlarged EU market.

The November 1998 Report confirmed that progress had been made in this field, particularly with regard to competitiveness policy. Efforts needed to be made to implement EU-compatible quality systems, however. SMEs were considered a priority in Estonian economic policy.

The October 1999 Report emphasised that industrial development was continuing. Having completed the privatisation of the manufacturing sector, Estonia had started work on restructuring and on enhancing its competitiveness. SMEs were playing a very important part here, as they constituted 99% of the country's businesses.

The November 2000 Report found that Estonia had taken steps towards adopting a realistic industrial policy, but still had to make an effort to adopt an industrial policy which was distinct from its general economic policy. It continued to encourage foreign investment, and was sustaining the process of privatisation and industrial restructuring. Policy on SMEs placed particular emphasis on business development in less developed and mono-industrial regions.

The November 2001 Report stressed that Estonia was continuing to make progress in drawing up industrial policy-related measures. The main efforts had been recorded in the areas of innovation policy, encouraging foreign investment and privatisation of the industrial sector. With regard to SMEs, the general policy was still being implemented whilst access to finance and the business environment had been improved.

The October 2002 Report commented on the progress made by Estonia in the field of industrial policy and SME policy.

The November 2003 Report considered that Estonia was essentially meeting the commitments arising from the accession negotiations in the field of enterprise policy.

The Treaty of Accession was signed on 16 April 2003 and accession took place on 1 May 2004.


EC industrial policy seeks to enhance competitiveness, thus achieving rising living standards and high rates of employment. Its aim is to encourage an environment favourable to initiative, to the development of undertakings throughout the Community and to industrial cooperation, and to foster better exploitation of the industrial potential of innovation, research and technological development policies. EU industrial policy combines instruments from a number of Community policies, and includes both instruments related to the operation of markets (product specification and market access, trade policy, State aid and competition policy) and measures related to industry's capacity to adapt to change (stable macro-economic environment, technology, training etc.).

In order to cope with competitive pressure and market forces within the European Union, industry in the applicant countries needs to have achieved a certain level of competitiveness by the time of accession. The applicant countries need to be seen to be pursuing policies aimed at open and competitive markets along the lines set out in Article 157 (ex Article 130) of the Treaty. Cooperation between the EU and the candidate countries in the fields of industrial cooperation, investment, industrial standardisation and conformity assessment as provided for in the Europe Agreement is also an important indicator of development in the right direction.


As regards industrial strategy, the industrial policy paper and action plan for 2003-2006 have not yet been drawn up. Efforts in the field of industrial policy are still too fragmented. It will be necessary to develop a comprehensive industrial policy. Foreign investment is increasing, but remains concentrated in the Tallinn region. There is little change as regards privatisation and restructuring compared to the period covered by the previous report.

Estonia has made good progress since the 1998 opinion in adapting its industrial policy. This chapter has been provisionally closed, no transitional arrangements have been requested and Estonia has met its commitments (see the 2002 Report). Efforts will need to be made to further enhance competitiveness in the enterprise sector to facilitate full integration into the single market.

As regards SME policy, Estonia adopted the "Enterprising Estonia" document in January 2002. Its objectives are to promote entrepreneurship, to create new jobs and to enhance the competitiveness of Estonian enterprises. An action plan for 2002 has been adopted.

Estonia signed up to the European Charter for Small Enterprises in April 2002.

The business environment has been improved, mainly by reducing the administrative burden on enterprises.

It will, however, be necessary to further improve the provision of information to enterprises when the Government amends legislation, and to make access to finance easier.

Estonia has made good progress in formulating SME policy since the 1997 opinion. This chapter has been provisionally closed, no transitional arrangements have been requested and Estonia has met its commitments (see the 2002 Report). It now needs to focus on promoting dialogue with businesses, disseminating information and facilitating the establishment and development of SMEs.

Estonia is participating in the Third Multiannual EU Programme for SMEs (1).

See also

(1) Decision No 5/98 of the Association Council between the European Communities and their Member States, of the one part, and the Republic of Estonia, of the other part of 4 November 1998 adopting the terms and conditions of the participation of Estonia in the Community programme in the field of small and medium-sized enterprises.

Official Journal L 307 of 17.11.1998.

Last updated: 16.01.2003