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Regional development and policy

The key place in the regional development in Estonia is held by the development of centers and making better use of regional differences.

Regional policy centers around large regional differences, the concentration of the population and economic activities in cities against the background of a decrease in population, the weakening of second-tier centers and the large distances that curb the development of rural areas. In accordance with the regional development strategy, the state is working to ensure consistent growth in all areas, applying the unique potential available due to each area's peculiarities.

The Government of the Republic ratified this strategy and its implementation plan for 2014-2020 on 20 March, 2014. The strategy focuses on the developmental needs of all of Estonia's regions and is investing more than previously in the improvement of work availability and services in areas which have been adversely affected by urbanization by emphasizing the strengths and unique aspects of each region.

Further information about the Regional development strategy for 2014-2020 »


Regional development strategy for 2014-2020

Vision 2030+
  • National competitiveness based on regional strengths and the benefits of a growing economy reaching all areas.
  • Ensuring the essential benefits for good quality of life (employment, services and various activity opportunities) in all regions.

Main strategic goals are divided into four major groups:

  • An environment for life and enterprise in the active regions which supports their wholeness and competitiveness. In order to shape a balance against the draw of larger urban centers with stronger active regions across Estonia, having improved environments for living and entrepreneurship as well as diverse work, service and activity opportunities.
  • An environment in major cities that promotes competitiveness in the international economy. In order to increase the importance of our urban areas as centers of growth for innovative and science-intensive economy with the help of an increasingly attractive living environment.
  • Exploiting region-specific resources with greater skill. This promotes specialization in growing areas of competence and enterprise according to region-specific conditions, and an increasing clarity in the uniqueness of different areas.
  • Greater connectedness and ability to grow. For regions to achieve a stronger ability to develop by greater inter-regional connectivity and increasing efficiency in regional cooperation and capacity for growth.

Compiling the strategy and the tasks of the ministries

Drafting of the new strategy began in 2012 and it involved a wide circle of experts, foundations and organizations from various disciplines. This new regional development strategy harmonizes the state's general framework for regional development, its goals and a plan for its implementation. This strategy will guide each ministry in the framing of their long-term plans - the ministries' specific functions are enumerated in the strategy's implementation plan. The new regional development strategy is also one of the foundations for the adoption of euro-money in years to come.

Regional specialization

This new regional development strategy pays closer attention to the uniqueness of each area and brings out four major regions of growth along with their needs and opportunities for development. Each region should focus on developing certain advantages for areas of enterprise which have the greatest potential for growth, which should not at the same time weaken the flexibility or diversity of the entrepreneurial structure of the region.

Regional Action Plans

For the years of 2015 to 2020 East-Virumaa and South-East Estonia Actions Plans have been developed.

The South-East Estonia Action Plan aims to increase the national security in relevant border regions through improving the local employment and labour market, increasing the distance working opportunities, more active social inclusion of the local residents and improving the connectivity conditions with the main rural centers. These measures will also help to contribute in preserving the sufficient population in border regions.

The East-Virumaa Action Plan aims to increase the reputation of the area and coherence with the rest of Estonia through improving the versatile living and entrepreneurial environments, increasing conditions for modern and highly productive economic activities which provide better living, working and resting opportunities. These measures will also help to increase the overall society and social security and revitalize local community life.

  • Further information about South-East Estonia Action Plan 2015-2020 »
  • Further information about East-Virumaa Action Plan 2015-2020 »

Regional Subsidies

National support

Each year a dozen of regional development support programmes and schemes are financed from the state budget. As some of them are aimed at supporting only specific regions, the rest cover the whole country. At the same time they all aim to guide the national regional development and improve the preconditions for the development of various regions in Estonia.

The Ministry of Finance mediates national subsidies from the following national programmes and measures: regional investment support programme, light and non-motorized traffic routes support scheme, local initiative programme, county development programme, Peipsiveere programme, sparsely populated areas programme, Setomaa development programme, service center support scheme, small islands programme and the compensation scheme for the Russian Federation visa processing procedure payment.

Further information about national programmes and support schemes »

European Union support

Estonia started receiving support from the European structural and investment funds as of 2004, in relation to becoming a Member State of the European Union. Prior to this, Estonia received support from the European Union that was meant for countries who are working towards becoming the Members States of the European Union. More detailed overview about the European Union’s structural funding arrangement can be found at

During the EU planning period 2014-2020 the focus is mainly on stimulating entrepreneurship and creation of new jobs. Support will be available on the following main areas: industrial and entrepreneurship sector infrastructure, development of incubation and product development opportunities, development of tourism attractions and tourism networks. In bigger cities and urban centers the focus is on improving the sustainable urban mobility and increase of childcare places. In order to raise local development capacity central training and consulting programmes will be supported as well calls of proposals will be opened for surveys and analysis.

At the same counties and cities have greater role to play in selection of priority axis and projects – subsidy granting is based on such regional strategic documents such as county development plans and strategies for the sustainable development of urban areas.

Further information structural funding measures »

European Territorial Cooperation

European Territorial Cooperation is one of the two goals of cohesion policy and provides a framework for the implementation of joint actions and policy exchanges between national, regional and local actors from different Member States. The overarching objective of European Territorial Cooperation is to promote a harmonious economic, social and territorial development of the Union as a whole.

During the 2014-2020 programming period European Territorial Cooperation programmes are based on priority axis and are more concentrated and result oriented. The programmes also help to contribute fulfilling the European Union’s strategy „Europe 2020“. Estonia participates in seven European Territorial Cooperation (hereinafter referred as ’ETC’) and in one European Neighbourhood Instrument (hereinafter referred as ’ENI’) programmes, which divide into three cooperation strands:

  • cross-border cooperation (Estonia-Latvia, Estonia-Russia, Central-Baltic);
  • interregional cooperation (INTERACT III, Interreg Europe, ESPON 2020, URBACT III);
  • transnational cooperation (Baltic Sea Region). 

In programmes the eligible applicants are generally national, regional and local authorities, public organizations and public equivalent bodies, science and other educational institutions, non-governmental organizations and foundations. In some cases also private enterprises (i.e. small and medium-sized enterprises– SMEs) are eligible and can participate however eligibility of the applicants may differ between programmes.

ETC and ENI programmes can cofinance both soft cross-border cooperation activities and investments however cofinancing may differ between programmes. The above mentioned programmes in Estonia are coordinated by the European Territorial Cooperation Unit of the Regional Development Department of the Estonian Ministry of Finance.

Further information about European Territorial Cooperation »


Last updated: 22 August 2017