During the 50 years after the 1940 annexation by the former Soviet Union, Estonia was politically and economically integrated into the Communist Bloc. It was not until 1991 that the country regained its independence and returned to democracy and a market economy. In the subsequent decade-and-a-half, Estonia experienced profound reforms in all areas of politics, economy and society. These reforms included trade liberalisation, large-scale privatisation, the introduction of the kroon as the national currency and an overhaul of labour market regulations. The economic transition brought about a substantial decline in employment and activity rates, accompanied by a rapid increase in unemployment. The dominance of liberal right-wing parties in all governmental coalitions since 1992 has contributed to the shift towards a minimalist state. Where labour market security is concerned, unemployment benefits are low, and unemployment insurance covers only a small share of the unemployed.
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