BONJOUR L'ESTONIE

Estonian Air passenger number continues to decline

In the first seven months, Estonian Air carried altogether 324,076 passengers, out of which 290,920 on regular flights. The total number of passengers decreased 3.2% y-o-y, on regular flights 4.6%.

In July the airline carried 59,359 passengers, out of which 54,445 on regular flights. The total number of passengers increased 2.5%, of which on charter flights increased by 27.3% and on regular flights by 0.8% y-o-y.

In the first seven months the market share of Estonian Air in the regular flights segment at Tallinn Airport was 42.3%, which is 3.9 percentage points lower y-o-y. The total market share (regular and charter flights) was 39.8%, which is 2.5 percentage points lower y-o-y.

Commenting the figures, the airline's press spokesperson Ilona Eskelinen, said: "The number of passengers carried by Estonian Air has been increasing since May and the overall decline in passenger numbers has become smaller month by month. The overall number of passengers is affected by the four first months of this year.

Euro Exhibitions

A free travelling exhibition will present the euro at various places in Estonia on the eve of Estonia’s changeover to the euro.

- From 18 August to 12 September, the exhibition will welcome visitors in the Astri Centre, Narva.

- From 20 September to 31 October, the exhibition will be in the Ahhaa Centre, Tallinn.

- From 8 November to 5 December, the exhibition will be in the Lõunakeskus shopping centre, Tartu.

What can be seen at the exhibition?

The exhibition mainly consists of information stands, but it also includes interactive activities, publications, banners, etc. Each exhibition will have a guide who will be able to talk in greater detail about any topics pertaining to the changeover to the euro in Estonia and to answer any questions the visitors may have. Lectures on related topics will be held at least once a week in the framework of the exhibitions.

Euro accession offers little comfort for Estonia’s unemployed

Estonia’s success story in joining the eurozone on 1 January is in stark contrast with other embattled eastern-European economies, but the price is being paid mostly by its youngest and Russian-speaking citizens who cannot find a job.

“I didn’t think it would be that hard finding a job. I feel that with little kids it’s almost impossible,” said 26-year old Egle Molder, a trained secretary and mother of two.

“Basic services – like education and social assistance – are very flawed in Estonia. The government hasn’t taken any steps to change the kindergartens or making the day care centres available for middle income people,” she noted.

The toll taken on social services – such as unemployment benefits and day-care for children – is the flip side of the budget cuts which allowed Estonia to meet the deficit and public debt criteria required for joining the euro.

Registered unemployed – 11.7 per cent of the country’s 1.2 million people – are divided into two categories: those who previously had a job and paid their social contribution get 50 per cent of their salary for the first 100 days and then 40 per cent for the following 170 days.

Those who never had a job with paid benefits – like Ms Molder – only get a fix aid of 1,000 kroons (€64) a month for 270 days – then nothing. Health insurance, however, is paid for as long as they show up at the local employment office.

Pirlo returns for Euro 2012 qualifiers

ROME — Italy coach Cesare Prandelli has recalled AC Milan midfielder Andrea Pirlo to his squad for next month's Euro 2012 qualifiers against Estonia and Faroe Islands.

But the squad does not feature a single player from Inter Milan, the reiging Serie A and Champions League title holders.

Pirlo was injured for Prandelli's debut on the bench earlier this month in a 1-0 friendly defeat against Ivory Coast in London.

With first choice goalkeeper Gianluigi Buffon and more here

Estonian Air passenger number grew by 2.5% in July

The carrier Estonian Air serviced 59,359 passengers in July 2010, out of them 54,445 were carried on regular flights. The total number of passengers increased by 2.5%, of which on charter flights increased by 27.3% and on regular flights by 0.8%, year-on-year, Estonian Air reports.

In the first seven months Estonian Air carried altogether 324,076 passengers, out of whom 0290,920 were serviced on regular flights, writes LETA.

Estonian Air carried from Tallinn 306,667 passengers. The total number of passengers decreased 3.2%, year-on-year, on regular flights 4.6%.

In the first seven months the market share of Estonian Air in the regular flights segment at Tallinn Airport was 42.3%, which is 3.9%age points lower year-on-year. The total market share (regular and charter flights) was 39.8%, which is 2.5%age points lower year-on-year.

In the first seven months Estonian Air operated 5,994 flights, which is 2.3% more flights year-on-year. In July Estonian Air operated 918 flights, which is 5.2% more flights year-on-year.

In the first seven months the regularity of Estonian Air was 97.7% and the 15-minute punctuality was 86.6%. In July the regularity and punctuality were 100% and 85.9%, respectively.

Juhan Part

Credit Suisse picks Danske Bank, Handelsbanken as Nordic favourites

Credit Suisse has made a review of a number of Nordic banks, rating "outperform" on Danish Danske Bank A/S and Swedish Svenska Handelsbanken AB. The broker has upgraded its share target on Danske Bank to DKK200 from DKK165 and that on Handelsbanken -- to SEK245 from SEK185.

The targets on Swedish Nordea Bank AB and Swedbank AB have been hiked to SEK75 from SEK70 and to SEK85 from SEK70, respectively. The recommendation on both stocks is still "neutral".

Norwegian DnB NOR ASA also got a "neutral" rating, while the price target was upgraded to NOK80 from NOK75.

At the same time, Credit Suisse recommended "underperform" on Swedish Skandinaviska Enskilda Banken AB, or SEB, reaffirming the SEK42 share price target.

Today, the stock in Danske Bank opened at DKK125.60 on the OMX Nordic Exchange in Copenhagen.

In Stockholm, the A-series shares in Handelsbanken, Swedbank and SEB opened at SEK191, SEK81.10 and SEK46.06, respectively, while the stock in Nordea opened at SEK66.35.

The stock in DnB NOR opened at NOK68.40 on the Oslo Stock Exchange.

World's oldest operating lighthouse now in Hiiumaa

When some years ago the Tower of Hercules in La Coruña, Spain, held the title of the world's oldest functioning lighthouse, now the honor belongs to Kõpu, Hiiumaa, Päevaleht wrote.

The 36-meter Kõpu lighthouse, in the western part of Estonia's second-largest island, was built in the beginning of the 16th century. According to historical records, the first firewood was ignited at the top of the lighthouse on August 1, 1531. The tower served as an important beacon for merchant fleets of the Hanseatic League that were sailing in the Baltic.

The lens still in use, floating in a mercury basin, was bought from a Paris exhibition in 1901. Kõpu lighthouse is visited by nearly 30,000 tourists every year. Hiiumaa's Kõpu, Ristna and Tahkuna are the only Estonian lighthouses regularly open for public visitation.

President Ilves briefly hospitalized

TALLINN — The Estonian president was briefly hospitalized a week ago, the president’s office announced on Friday.

President Toomas Hendrik Ilves spent part of the evening of Aug. 20 in the Northern Estonian Regional Hospital in Tallinn after complaining that he did not feel well, Toomas Sildam, press spokesman of the President’s Office told the press on Friday.

Sildam said that Ilves did not feel well and went to the hospital, however an examination did not detect any illnesses, so after a couple hours he was discharged and returned home.

Kai Joost

Ninth ScanBalt Forum hosted by Tallinn : 22-24th September 2010

The Ninth ScanBalt (Scandinavia-Baltic) Forum 2010 will be organised in Tallinn, Estonia from 22 to 24 September 2010.

The event will centre on the theme of 'Healthy future', focusing on a variety of issues from lifestyle and food to health related technologies and services as well as industrial biotechnology. All these relate to longer and better life, whether by getting more efficient and effective health services or improving the environment.

Session topics will include:
- 'Smart growth as a tool to compete',
- 'Estonian bioeconomy: status quo and future perspectives',
- 'Healthy food and efficient food industry',
- 'ScanBalt health region - innovation in health and life sciences',
- 'Healthy ageing in the Baltic Sea region',
- 'Patient mobility in EU - unlocking the political conundrum',
- 'Biotechnology parks - support structures for new company development',
- 'Business models and co-operation frameworks for successful health services export'.

The forum will also feature visits to biotech companies and academic labs in Tallinn.

For further information, please visit: http://www.scanbaltforum.eu/

Estonia's long awaited recovery may still be delayed yet awhile

In a recent FT Op-ed, entitled "Estonia’s recovery defies economists and academics", columnist John Dizard argued that "the “internal devaluation” policy, which means cuts in nominal costs such as wages and rents, was very hard on the population, but appears to have worked ahead of even the Estonian government’s schedule".

But as I said to John in a very enjoyable phone conversation I had with him before he wrote the piece (where he was kind enough to descibe me as a "freelance economist", one who doesn't have to answer to a boss before expressing an opinion), perhaps we should just hold on a minute before jumping to too many conclusions, since things are still far from clear. So let's take a look.

As John points out, many macro economists, among them me myself (here, and here, and here) and Paul Krugman (here) have been arguing that if the Baltic countries stick to their policy of having a fixed exchange rate with the euro, they face a long period of low growth and serious internal deflation. At the start of this debate, I pointed out that the impact of price deflation on the bank loan books would be just the same with or without devaluation: not so, said Krugman (and he was right), the impact is worse, since even the Kroon or Lati denominated loans (which in truth are quite few) are affected.

"Tele2 Estonia covers main highways with 3.5G network"

Mobile operator Tele2 Estonia announced that it has covered highways connecting Tallinn and Tartu, as well as Tallinn and Parnu with its 3.5G network. The highway connecting Talllinn and Kohtla-Jarve has also been covered.

The operator has launched 25 new 3.5G base stations this summer. The network currently covers more than 100 agglomerations across the country comprising 80 percent of the country's population.

Huge differences in taxi tariffs in Tallinn

A price survey conducted in August by consumer protection authorities found major variations in taxi tariffs in Tallinn, wrote aripaev.ee

For instance, according to the findings of the survey, the cheapest kilometre tariff in Sõbra Takso was twice lower than in Linnatakso.

There were also notable differences between minimum charge and waiting time tariff. The cheapest waiting time tariff was in Saksa Takso (116 kroons per hour) and the highest waiting tariff was in Linnatakso (239 kroons per hour).

So hereby, we are asking anyone and everyone not to use Linnatakso ...

The cheapest tariff was recorded by Sõbra Takso where one kilometer costs 5.30 kroons, minimum charge is 35 kroons and an hour wait costs 115 kroons. The second cheapest was Saksa Takso with 5.4 kroons per kilometer, 34 kroons minimum charge.

Toomas Hõbemägi

Extra 1.5 million Euros for Tallinn 2011 "not automatic"

A curiously-worded letter to the European Commission drew the attention of ERR News.

The letter concerning funding of Tallinn European Capital of Culture 2011 - bearing the signatures of Tallinn Mayor Edgar Savisaar and Estonian Minister of Culture Laine Jänes, and addressed to Jan Truszczyński, Director General for Education, Training, Culture and Youth of the European Commission - reached the Commission’s Brussels office on August 25.

Most of the two-page letter affirmed the commitment by the city and state to invest in Tallinn 2011 and outlined many of the programs already under development for Tallinn Capital of Culture 2011.

The penultimate paragraph read: “The Government of the Republic of Estonia and the Tallinn City Council are working constructively and in good concordance in preparing the Capital of Culture year. The team of Foundation Tallinn 2011 has done its work professionally and with result.”

Asked to comment on the European Commission’s interpretation of the letter, Dennis Abbott, Commission spokesperson for education and culture, said that the letter was connected to the Melina Mercouri prize, an additional 1.5 million euros in Capital of Culture funding. Before the prize is awarded, Abbott emphasized to ERR News, “the commission is obliged to ensure sound financial management of public funds.” Abbott said the prize is normally paid by the end of September.

City plans museum for 300-Year-Old Russian community

The Tallinn City Council has given the go-ahead for a museum dedicated to Russian culture in Estonia.

Deputy Mayor Yana Toom said the museum’s foundation will focus on the 300-year history of the Russian community in Estonia and its cultural traditions.

Tallinn is home to half of Estonia's inhabitants who identify themselves with Russian culture. As with any museum, the establishment will have a visitor-oriented side, and it will also deal with acquisitions and preservation of artifacts and research. 

The museum will be located in the Kadriorg district, at the western end of a park that is also home to other museums, such as the KUMU Art Museum. The city made a 20,000-euro startup contribution.

Tallinna Kaubamaja Grupp : Q2 revenue down, but profit up

Tallinna Kaubamaja Group, Estonian's largest retailer, reported higher second-quarter profit after cutting wages and closing unprofitable stores. Net profit rose to 77.4 million kroons from 14 million kroons a year earlier. Revenue declined 5 percent to 1.58 billion kroons.

In the department store segment, second-quarter revenues fell 8% in a year to 283 million kroons.

Revenue of Selver supermarkets was 1.2 billion kroons in the second quarter, or about 3% less than a year ago. Profit was 43.5 million kroons, up by 40.7 million kroons from last year.

The company's car dealership business of KIA cars ended the second quarter with one million kroons profit, up from a loss of 10.5 million a year ago.

Revenues of the shoe business segment in the second quarter were 53 million kroons, up 17% in a year. Quarterly net profit was 1 million kroons.

Toomas Hõbemägi

Estonia’s construction output drops in Q2

Estonia’s construction output decreased 17% year-on-year in the second quarter at constant prices, data from Statistics Estonia showed Friday.

The statistical agency said the decline on construction market, which remained within 30% since the beginning of 2009 compared to the same quarter of the previous year, slowed down in the second quarter this year.

Production value of construction enterprises amounted to EEK 5.3 billion, of which the production value of building construction was EEK 3.1 billion and the production of civil engineering totaled EEK 2.2 billion.

After decades, Estonians could regain seal hunting rights

TALLINN — Islanders from Kihnu, a small Estonian island in the Baltic Sea, could soon regain seal hunting rights after a 30-year break due to a soaring seal population over the last decade, an Estonian official said Thursday.

"The Ministry of Environment has now prepared a draft bill that will move grey seals from category II protection to category III, so it will become possible to end the three-decade-long ban on seal hunting," Hanno Zingel, adviser to the Estonian environment ministry, told AFP.

According to Zingel, the population of grey seals in Estonian waters has risen from 1,500 to 4,000 over the last decade.

"The number of grey seals has increased rapidly partly due to the better environment conditions of the Baltic Sea, but the 4,000 grey seals in Estonian waters is far behind the number of over 10,000 seals we had 100 years ago. Our neighbouring countries Finland and Sweden allow seal hunting," Zingel said.

The island of Kihnu is located off Estonia's west coast. Its more than 500 permanent residents appealed to the ministry three years ago, asking to restore their ancient right to hunt grey seals and make traditional meals from them.

Estonia won't sell Eesti Post until after March elections : Parts

Estonia’s government won’t consider the partial sale of postal service AS Eesti Post until after elections next March, Economy Minister Juhan Parts said.

Prime Minister Andrus Ansip’s Cabinet agreed in December 2008 to look for a strategic investor for Eesti Post by 2010 after the Baltic country opened its market in 2009. The government currently lacks unity on the issue, Parts said in an interview with Bloomberg news in Tallinn yesterday.

“It’s not possible to hold rational discussions on this before the elections,” Parts said. “The next government will inherit the choice of keeping the company in state hands, involving a strategic investor, or selling a majority.”

Estonia, which is due to become the third east European country to join the euro area in January, has the lowest public debt to gross domestic product ratio in the European Union, reducing pressure on the government to sell state-owned companies.

The government will decide on how much financing it needs to attract next year for a capital increase in utility Eesti Energia AS after results from a tender to build two oil shale- fired power units in northeastern Estonia are released next month, Parts said. Estonia may not need to tap capital markets or issue a bond as the financing may be taken entirely from government reserves, he said.

Eesti Energia, the biggest Baltic electric utility, received bids in July from Canada’s SNC-Lavalin Group Inc. and France’s Alstom SA for the two units, each with a capacity of as much as 300 megawatts.

Ott Ummelas

Estonia consumer confidence at the highest level in three years

Estonian consumer confidence improved to -1 in August, the highest level in three years, the Estonian Institute of Economic Research said on Wednesday.

The confidence figure is the best since July 2007, when the index reading was 3. The consumer confidence index showed a reading of -3 last month, the institute said.

Consumer confidence  was -1 in August and improved by two points from July. Of four components of behind the consumer confidence index (household's financial situation, Estonia's economic situation, unemployment and saving for the next 12 months), the August showed an improvement in terms of household situation, economic situation and saving plans for the next 12 months. Assessment of unemployment was affected by the arrival of the autumn period and lower expectations in comparison with summer.

43% of respondents say the country's economic situation will improve in the next 12 months, 25% expect the situation to remain unchanged and 24% said it will worsen.

Central bank : Euro adoption resulted in unification of deposit interest rates

Estonian central bank Eesti Pank published a statement yesterday saying that in July, the corporate and household loan and leasing stock declined by 1.7 billion kroons, i.e., 0.7%. The volume of the financing portfolio accounted for 241.7 billion kroons by end-July, having shrunk 6.8% year-on-year.

The loan and leasing stock contracted nearly as much as in June, irrespective of the fact that the volume of new corporate loans was nearly a third larger in July than the average of the previous six months. The notable rise in loan turnover was partly caused by a syndicated loan issued to the industrial sector.

The average interest rate on long-term business loans issued in July decreased to 3.7%. The fall was impacted by the large syndicated loan transaction. The average interest rate on housing loans (3.3%) did not change remarkably compared to previous months.

With the exclusion of some large loan transactions, lending activity has remained relatively modest this year. Car lease, which underwent a very steep fall at the start of the year, has started showing signs of a revival. However, the turnover is still below the level of 2004.

With the economy rekindling, the second half of the year may experience a more broad-based pick-up in lending activity. Nevertheless, private sector indebtedness will decline and compared to the peak reached in autumn 2008, loan stock will remain more than 10% smaller by end-2010.