An Estonian Model?

If we are in the business of models in Europe, it does not hurt to take a look at the performance of Estonia.

Leading the Baltic "tiger economies", it has also served as an inspiration to the debate about economic policy elsewhere.

Indeed, it was Estonia that championed the concept of the flat tax- since then adopted even by Russia.

The other day the IMF published its annual review of the performance of the Estonian economy. It points to some of the challenges of extremely high growth, but very clearly applauds the main lines of policy:

"Estonia's rapid economic growth stems from its liberal economic institutions and conservative financial policies. Real living standards now surpass those in most new member states of the European Union. Increasing trade and financial integration are offering new opportunities, but also creating imbalances. The challenge now is to implement policies that minimize the resulting risks to macroeconomic stability while continuing to profit from access to foreign markets and technologies."

Not bad for an economy that little more than 15 years ago had little else but empty grey shelves in the stores.