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Estonian politician calls for more family firms to boost economy

An Estonian politician has said the eastern European country needs more family owned-companies to spur economic growth.

An Estonian politician has said the eastern European country needs more family owned-companies to spur economic growth.

Eerik-Niiles Kross, a former diplomat to the UK and member of the IRL party, made the remarks at the inaugural Opinion Festival, held in Paide over the weekend. He said the government should aim to support at least 20 new large-scale family businesses.

Kross referred to the German Mittelstand model as an example Estonia could seek to emulate, Baltics Business News reported.

According to data from the European Commission, 90% of businesses in Estonia are family firms, with its admission to the European Union in 2004 and accession to the Schengen visa area boosting family firm activities.

Germany's Mittelstand companies are small to medium enterprises, which are often family owned but use very professionalised structures. They account for approximately 70% of businesses in Germany and 50% of GDP.

The Mittelstand are often credited with shielding Germany from the worst of the 2008 financial crisis because of their long-term outlook and cautious approach to debt.

Kross is an entrepreneur himself, co-founding consultancy service Trustcorp, which offers services such as intelligence planning, crisis management, IT security and political lobby work.

Although his party are moderate conservatives, Kross has long been a vocal critic of Russia and its foreign policy.

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