“Since the spring of 2019 we have had a new parliament and government,” says Kadri Kallas, Partner at TGS Baltic in Estonia. “Much like in a number of countries around the world we have a populist party in our government. However, the party which had most votes was unable to form the government, so the second-ranked party, along with two others, formed it instead.”
“The government is now proposing to have a national referendum regarding whether marriage should remain a union between a man and a woman,” she says, noting that such an amendment would not be in line with Estonia’s Nordic and Western partners. “We used to be described as a country aspiring to the Nordic way of life in terms of openness and tolerance, but the government is now taking us back to Soviet times,” she sighs.
Estonia is also making significant changes to its pension system, Kallas reports, explaining that a decision to make contributions to the pension system voluntary has recently been upheld by Estonia’s Constitutional Court. “Our pension system is built on three pillars,” she says. “The first pillar is for people who cannot rely on the other two; it is very basic, and provides only the bare minimum.” Contributions to the second pillar used to be compulsory, and once payment was made, funds could not be withdrawn from the system before retirement. However, that has now changed, Kallas says, meaning that those who choose only to rely on the first pillar may find its resources insufficient.
Estonia’s economy has faced its ups and downs recently, though Kallas reports that certain industries weather the storm better than others. “Everything which can be done remotely, such as delivery services and Internet companies, is thriving,” she says, although she reports that the country’s tourism sector suffered greatly during the pandemic. "The government of Estonia was more conservative than, say, that of Latvia or Lithuania, and it has not provided additional meaningful help to the tourism sector, past the initial aid package at the beginning of the pandemic," she says, noting that the most recent aid package was valued at only EUR 2.1 million, which, she says the tourism sector has viewed as "extremely meagre."
In terms of big transactions, Estonia has gotten back on track since the autumn, Kallas says. “The lockdown that was imposed when the first wave of the pandemic hit stopped a number of transactions,” she says. “However, once people got over the initial shock, they started adapting.”
Kallas reports that the most significant change in the Baltic legal market recently was the Estonian and Latvian offices of Primus Derling joining and rebranding as Walless, with the Lithuanian Primus going its separate way.