Excellencies, dear friends.

I would like to heartily welcome you here today in Kadriorg and I would especially like to welcome the distinguished Ambassador of Ukraine, H.E. Juri Olenenko, who has joined your ranks during the past year.

Much has happened in Estonia during this year. We have achieved much, we have shortcomings. But all things considered the Estonian bird which had been tethered to a pole for fifty years has once again attempted to take flight as the economy is moving upwards again. The Kroon is still stable, the budget is still balanced and privatization is proceeding well, with almost all small- and medium-sized businesses privatized. We are finally seeing positive growth in the economy!

The year 1994 began with a bang. NATO's decision to announce the Partnership for Peace was a bold one and one which will find praise in the history books as a visionary way to open NATO to new members from Central Europe. The demands that are put to us are tough, but they are fair. I believe that Estonia has both the will and the ability to pass this tough entrance exam which should open the way to NATO - the guarantor of freedom and peace in Europe for over 40 years.

However, I believe that one of the most significant foreign policy events of the past year happened only a week ago. In Luxembourg Estonia, together with her Baltic brethren and her other Central European relatives, was admitted into the fold of the Western European Union as an associate partner. This extremely important event signals to the world that Estonia is but a step away from associate membership of the European Union and but a walk, albeit a difficult walk, from full membership of the EU.

Even now, as I speak to you here, a team of Estonian negotiators is meeting with its EU counterparts in Brussels to continue negotiations within the framework of the Estonian-EU free trade agreement, which we hope to sign within the next few months. And in fact tonight Foreign Minister Jüri Luik, whom you all know well, will together with his Latvian and Lithuanian colleagues meet with the foreign ministers of the EU troika within the framework of the ongoing political dialogue between the Baltic states and the EU:

The European Union has also come forth with the plan for a Pact on Stability which Estonia has wholeheartedly endorsed. We find in it yet one more confirmation of our belonging to the "inner circle" of future EU applicants and in fact also a possibility to address the issues of great importance to Estonia: namely the need to have an open-ended Baltic Sea roundtable to discuss issues related to the integration of our large population of foreign origin and the necessity to address the outstanding border question between Estonia and the Russian Federation.

On the first issue in the Stability Pact I believe that we can draw on the extensive work of the CSCE Mission to Estonia which has done an excellent job in clarifying the issues at hand to the world community. Like Ambassador Lahelma I too hope that the mission will soon be able to declare its task to be completed, but until then I welcome his presence here in Estonia.

This brings me to the less pleasant, but equally important second part of my address to you: shortcomings which we have seen and which we still face in this country in transition.

The European Union presented a demarche to the Foreign Minister only a few weeks ago on the issue of the registration of aliens as temporary residents. This demarche was largely based on the reports of the CSCE Mission - justly so! The Estonian Citizenship and Migration Office has been doing an extremely poor job. It is unjustifiable that people have to face the arbitrariness of mean-spirited small officials in sometimes vain attempts to register as temporary residents or to apply for citizenship. Arbitrary behaviour by small bureaucrats should have been thrown out together with Soviet rule and cannot be accepted in independent Estonia. The Government has taken many important decisions in this regard during the past few weeks, but more remains to be done. We have to assure every resident of this country - citizen and non-citizen - that his rights are respected, everywhere.

On the issue of these rights we face two challenges: one connected with privatization and the other with the presumed right to a decent living.

The first challenge concerns the fact that we took the decision to restitute land and property to previous owners. This procedure is proving extremely time-consuming and difficult, but it is necessary. Many may argue that you cannot redeem the crimes of the past commiting new ones today - by throwing out residents from their restituted flats, for example. But it has to be done, simply because we have to restore the basis of our society: the right to private ownership. And we have to cement the truth that this is an inalienable right which cannot be taken from you even after fifty years.

The other challenge is connected to the difficulties large segments of the Estonian population face today. Pensioners make up almost 30 % of our total population and their pensions are abysmally low. Low-income people and families with many children face a very tough time. But 20 - 30 % of state budget is allocated to social services already and the state cannot do much more. Yes, we do have to raise the pensions, yes we do have to raise support payments, but we can only do so if we keep pace with the general growth of the economy. Until then we are forced to live with these human tragedies which are the fault, not of the present government, but of the 50 years of occupation which destroyed the Estonian economy.

To close, my friends, I would like to take up an issue which is familiar to us all. The negotiations on the withdrawal of all Russian troops from Estonia by August 31, 1994. My good friend Ambassador Trofimov is listening intently and I would like to confirm to you and to all present: Estonia wants an agreement on the withdrawal of all Russian forces, Estonia is willing to let most retired Russian officers stay in our country and Estonia wants friendly relations with Russia. Let us throw aside the propaganda slogans and let's resolve the issue. We have the will to negotiate in good faith. I hope Russia does too.

Excellencies, dear colleagues. Summer is coming, the Song Festival is around the corner. We have together faced many troubles and I am sure that we will face many more. But the trend is clear: The Estonian swallow is taking flight.

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