The analysis of the economic development and the regulatory reform process in Estonia gives a predominantly positive picture. It suggests that Estonia has already made several important steps towards a market economy. Macroeconomic development is characterized by a high degree of monetary stability compared to most other Central and Eastern European reform countries. The new legal system already largely complies with "Western standards" and guarantees long-term democratic conditions and a high degree of legal certainty. Although legal foundations for privatization have been created since 1989, the privatization process is sluggish. The institutions of monetary and fiscal policy are required by law to meet the objective of macroeconomic stability. In the vast majority of markets, prices have been released and barriers to entry eliminated. In Estonia a free trade regime is almost completed.