Every year several thousand Estonians, most of them young and low- or medium-skilled, leave Estonia to find better paid work abroad. Given Estonia's low birth rate, the loss of 0.2-0.3% of its working-age population each year exacerbates the challenges posed by the ageing of its population....

Financial market liberalisation and financial convergence after EU accession, extremely low real interest rates as well as fast rising disposable income and wage expectations contributed to rapid lending growth in Estonia from 2000 to 2007. Favourable fiscal provisions further contributed to the...