I was in Tallinn today for business and had a chance to meet some of the local parliament people there after I had given my talk. We were greeted by Taavi Veskimägi who gave us a look into the fiscal policy of Estonia that just came out last week.

Call me boring, but I found this extremely interesting. Estonia’s GDP has dropped close to double digits this year and their unemployment is rising towards 15-18%. With all this in sight, they are not looking towards raising taxes but instead on planning more budget cuts. Third cut this time to be honest.

He also said something that gave me a thought, “The Estonian people are not very radical under extreme circumstances”. This of course is a result of the decades long Soviet control, but I’m sure all this will reflect the entrepreneurs of Estonia as well. I’m willing to argue that in turbulent times the average Estonian entrepreneur is more risk averse than her Finnish counterpart. This is simply, because we are not made to stand economical stress and extreme situations – something that is more of an everyday problem in your regular startup.

Nevertheless, Taavi’s statement was that being such a small country – government intervention is not really helpful and thus they are letting market forces do a lot of the work, like they did in the 90s. He also mentioned that there is usually a large price to pay socially and in terms of trust towards the politicians, but he certainly was willing to take his chances on this.