Estonia, republic in northeastern Europe, bounded on the north by the Gulf of Finland (an extension of the Baltic Sea), on the east by Russia, on the south by Latvia, and on the west by the Baltic Sea and the Gulf of Riga. With Latvia and Lithuania, Estonia is one of the Baltic states. Its name in Estonian, the official language, is Eesti Vabariik (Republic of Estonia). Estonia is the smallest of the Baltic states in both land area and population. Ethnic Estonians make up the majority of the population, and Russians form the second largest group. Many of the Russians or their ancestors settled in Estonia after the Union of Soviet Socialist Republics (USSR) annexed the republic in 1940. After independence was restored in 1991, Estonia adopted a new, democratic constitution and accelerated its transition from the centralized economy of the Soviet period to a free-market one.