Get the right angle – the right part of the old town – and the Estonian capital of Tallinn is stunningly pretty. Really. Properly. Eye-wateringly. Lovely.

All those medieval towers, gothic churches, battlements, squares, cobbled alleys and leaning gargoyles add up to images that are unforgettably chocolate box sweet.

However, beneath the photogenic sugar coating, there is a gritty reality. The fall in tourism from a visitor high of 2.1m in 2007 to 1.9m last year chilled the Estonian air faster than a -25°C Baltic winter; the 2008 property crash left speculators with empty apartments and burned fingers; while a spluttering bank system prompted the international community to start muttering about devaluation.

But that was yesterday, the happy ending starts today. In 2011, Tallinn becomes the European City of Culture (a title shared with Turku in Finland) and tourism in the capital is expected to grow by a morale-boosting four per cent this year.

Estonia has also been judged to be so economically astute and recession-beatingly smart that it can join the euro in January.

So why is Tallinn so clever?

Well, it’s just so staggeringly forward thinking. Remember, this is the place that changed communication by inventing Skype, it’s where NATO has its ‘centre of excellence’ for cyber defence, and where everything is wireless, even parking fines and school reports.

Estonia may be the 132nd smallest country in the world but it’s the 30th in terms of the highest number of internet users. And, like technology, when it comes to tourism, Tallinn is ahead of the curve.

Yes, all those medieval streets are photogenic and lovely, but you can’t build a visitor-based economy on the past alone.

A short stroll outside of the old town brings you to the new KUMU, the biggest art museum in the Baltics. It’s a wonderful striking statement packed to its glass rafters with contemporary art, polite staff in stylish black, and stylish restaurants serving stylish food.

You’ve seen it all before (Spain’s Bilbao, Vienna’s MQ, Antwerp’s MHKA) but this is the new face of the Baltics.

And the reason it was voted European Museum of the Year is not just because it’s über-slick, it’s because like Tallinn it bravely looks forward, not back. Down the road from KUMU is Estonia’s past.

And this comes in the form of the old cottage Peter the Great used as a holiday home, a beautiful lake ‘swannery’ and a restored palace with gardens bursting with colour.

These attractions are wonderful and picturesque, but KUMU adds freshness to the tourism mix.