BONJOUR L'ESTONIE

Financial crisis hits pension systems in Europe

The financial crisis has significantly impacted pension systems in the countries of Europe and Central Asia (ECA) and many of the governments have been tempted to make policy changes in response to the increased pension deficits, says ‘Pensions in Crisis,’ a World Bank Regional reportreleased today. But despite the severity of the crisis, it pales in comparison to the demographic crisis which the region will face, and World Bank experts urge countries in the region not to make any policy changes focused on addressing short-term fiscal concerns that make the long-term even worse.

The new report analyzes the impact of the financial crisis on pension systems of ECA countries, reviews the initial policy responses by individual governments, and provides recommendations on how to strengthen pension systems in the region both in the short- and long-term. World Bank experts concluded that though pension systems in ECA come in all shapes and sizes, no pension system, however well structured, proved immune to the crisis.

Children get a taste of Estonian culture

YOUNGSTERS at a junior school in St Neots were in for a treat yesterday morning when an Estonian pop star dropped by to belt out a few numbers.

Singing sensation Hannah - full name Hannah Ild - stopped off at Crosshall Junior School in Eaton Ford as part of a series of visits she is currently making to schools across the country.

The 28-year-old, from Estonian capital Tallinn, is hoping to make her name in the UK after ruling the charts in her homeland for the past decade.

The songstress, who now lives in London, has also teamed up with the Estonian Embassy to promote Estonian culture. Tallinn has been made the European Culture Capital for 2011.

Hannah performed four songs to the children, spoke about Estonia and encouraged them to look after the planet.

She said: "The school was absolutely lovely. All together there were about 480 kids and they were amazing."

Hannah said the youngsters gave her a very warm welcome - and she gave the school a book about Estonia.

The First Anniversary of the Death of Patriarch Aleksei Rediger ...

This Saturday, we will mark the first anniversary of the death of Patriarch Aleksei Rediger of Moscow and all the Russias. On 4 December, the feast of the Presentation of the Virgin in the Temple, Patriarch Kirill served a Pannikhida at the tomb of the late First Hierarch at the Epiphany Cathedral in Moscow.

This is a memorial service, usually performed on Friday evenings, on the eve of Ancestors’ Saturdays, or on days that the whole Church commemorates the reposed in general. On the morning of 5 December, Patriarch Kirill will return to the same church to celebrate the liturgy, then, he will serve a Pannikhida at the grave of Patriarch Aleksei in the right side of the cathedral.

On this day, all Orthodox churches and monasteries will serve memorial liturgies for the repose of the soul of the late Patriarch Aleksei. Many parishes will hold commemorative events and exhibitions devoted to the departed patriarch.

The clergy and the faithful will remember Patriarch Aleksei, the First Hierarch of the Moscow Patriarchate during the most recent period in Russian history, a time that saw the revival of church life in the Motherland.

Today, the Museum of the Cathedral of Christ the Saviour opened a new exhibition about the life and ministry of the reposed First Hierarch. It will present his personal belongings, and, on Saturday, viewers of TV Pervy Kanal (First Channel) will see the documentary Путь патриарха (Put Patriarkha: The Path of the Patriarch), dedicated to the memory of Patriarch Aleksei. In the film, figures such as Metropolitan Amfilohije Radović of Montenegro and Primorsky, the Patriarchal Locum Tenens of the Serbian Orthodox Church, and Patriarch Aleksei’s assistant, Nikolai Derzhavin, and TV presenter Aleksei Svetozarsky, who did holiday broadcasts from the Cathedral of Christ the Saviour, shall give their recollections of the late First Hierarch.

He left a note, stole a truck and fled into a hail of bullets ....!

Sister says ex-con brother was suicidal and hoping the police would kill him.

By Nick Ferraro

The sister of the man wounded by police Wednesday night in downtown Hastings said she believes he was trying to commit "suicide by cop."

"I'm going all the way out. Once they pull me over or anything I'm shooting them until I run out of bullets," Roman Tokarev wrote in a note his sister Olesya Good's husband found Wednesday before she alerted police.

Hours later, officers shot Tokarev, 27, after he allegedly pointed a gun at them and tried to ram their squad cars during a chase.

"After thinking about everything and seeing everything that happened, I think he was trying to make the police shoot him to death ... kind of commit his own suicide by them shooting him," Good, 29, said.

Tokarev, who emigrated from Estonia with his family in 1996, was hospitalized in critical condition Thursday after surgery to remove a bullet lodged near his heart, his sister said.

"The way it sounds, he was shot six to eight times," she said, adding he was hit twice in the arm and twice in the leg. "His left hand is totally paralyzed."

Tokarev had been living at his sister's home in Elk River and under intensive supervised release — reserved for high-risk offenders — through the Minnesota Department of Corrections.

He was released from the Minnesota Correctional Facility-Stillwater on May 4 after serving time for a 2005 aggravated robbery conviction in Hennepin County.

Crisis worsens poverty in eastern Europe - World Bank

By Lesley Wroughton

WASHINGTON - The global financial crisis could push 11 million more people into poverty and another 23 million to the brink of poverty in eastern Europe and central Asia by 2010, according to a new World Bank report.

The revealing study of how families are dealing with the effects of the crisis shows they are being hit by the credit market squeeze, rising prices, and growing unemployment.

"The global financial crisis risks reversing the substantial gains and improvements in living standards," said Luca Barbone, director for Poverty Reduction and Economic Management in the World Bank's Europe and Central Asia region.

The region has been among the hardest hit worldwide by the global financial turmoil that has pushed many countries into a deep economic recession. Easier access to credit during the region's economic prosperous years helped families but also exposed them to potential market shocks.

During previous crises, families could rely on second jobs or went abroad to find work but the global nature of the current crisis has made such fall-backs almost impossible.

The World Bank said middle-income countries that have experienced the largest economic contractions will also see the steepest rise in poverty.

HIV experts voice concerns on World Aids Day

City of Helsinki to check on payment of Estonian workers at city construction site

Estonian construction worker who told HS about pay arrears absent on Thursday.

The City of Helsinki is investigating the payment of wages to Estonian construction workers at a city-owned building that is under renovation in Käpylä. Estonian workers at the site told Helsingin Sanomat on Wednesday that they had not been paid on schedule.
 
The Estonians’ employer is an Estonian-owned company, which works as a subcontractor of the Finnish company in Käpylä.
  “We agreed that the company should clarify the situation by Friday next week. We want to see the pay slips and documents which prove that payment has been on time”, says Risto Mykkänen, head of construction at the Helsinki Housing Production Department (ATT).
  The city also wants to find out if the company has drawn up a proper agreement on occupational health services.
 
Mykkänen says that Helsinki wants to fight shady practices in the construction industry.
  “When subcontractors are chosen for our building sites, we ask them to show the papers required by the law on buyers’ responsibility. They show, among other things, that the company has no tax arrears, and that it has taken care of its pension insurance payments.”

Shady Estonian companies pose problems for Finnish builders

Finnish-run shady operators leave taxes, and sometimes wages unpaid.

Cheap competition from Estonia is causing problems for many Finnish construction companies, who are finding it difficult to compete with the shady business practices of many of the Estonian firms.
Estonian companies involved in the questionable dealings are often run by Finns. The standard practice is to flout the law as long as possible, and when the company is caught doing something illegal, the employees are simply moved to another company that the same people have set up, and operations resume from a clean slate.

The recession has brought nearly all construction in Estonia to a halt.

Kyösti Suokas, deputy chairman of the Finnish Construction Trade Union, says that nearly all capable Estonian builders now work in Finland. The workers are often underpaid, and often no taxes, or social insurance contributions are paid, he says.
He says that small Finnish construction companies are desperate, because it is impossible to compete with companies registered in Estonia.
“Medium sized companies also say that it is impossible to get subcontracting work, because they cannot compete with companies registered in Estonia”, Suokas says.

Rebalancing in the Baltics

Executive Summary

• Compared with the average quarterly value of GDP in 2007-08, the first two quarters of 2009 are down in nominal terms to the tune of 15.9%, 15.4% and 10.5% in Lithuania, Estonia, and Latvia respectively.

• The average quarterly current account deficit of the Baltics from Q3 2008 to Q2 2009 was mill 500 Euros. This amount to just 18% of the average quarterly current account deficit two years prior to the crisis. Consequently, the Baltics have delevered to the tune of 80% over the course of less than 1 year.

• In the two first quarters of 2009 (relative to Q1-2006 to Q4-2008), imports have contracted 16%, 33% and 11.5% more than exports in Lithuania, Latvia and Estonia respectively.

• In Euro terms, the Baltics have lost external financing to the tune of bn 1.87 Euros in the first half of 2009 compared to the peak of the boom which amounts to 12.6% of the entire region's GDP in the same period.

The quote above from Fed chairman Bernanke is ripped from the introduction of a recent conference paper drafted by international economics icons Kenneth Rogoff and Maurice Obstfeld who suggest that the financial and economic crisis that is currently making its presence felt across the global economy, at least in part, has something to do with the notion of global current account imbalances. Now, and in all modesty, this is something I have argued extensively at this space and in this way I welcome the likes of Messieurs Rogoff and Obstfeld in the fold. I tend to go, of course, for the big prize in my stubborn persistence on the link between global ageing, global imbalances and thus by way of deduction the economic crisis as we have come to know it.

Read here

Estonia alarmed over Russia's intention to buy French warship

TALLINN - Commander-in-Chief of the Estonian Defence Forces Ants Laaneots said if Russia buys a French Mistral amphibious assault ship, measures should be taken to ensure Estonian national security.

"If the French finally sell it [the warship], we should consider security measures to be taken in case the navy is deployed in the Baltic Sea," Laaneots told Estonian television on Saturday.

Estonian security analyst Eerik Niiles Kross said: "If Russia obtains such a modern and effective warship, which can carry a tank battalion, take aboard several hundreds of people and faultlessly control [its] operations... the possession of such an equipment will provide Russia with a considerable advantage, if it is deployed in the Baltic Sea."

Russia is seeking to buy France's Mistral-class helicopter carrier worth 400-500 million euros (around $600-$750 mln). The ship will arrive on an official visit to St. Petersburg on November 23, and the Russian Navy and defense industry experts will be able to inspect it.

Looking eastwards, even further

Could China fill a power vacuum in eastern Europe?

As the countries of eastern Europe bump nervously between a near-neutralist Germany, a revisionist Russia and an absent-minded America, the search is on for a powerful outsider, with strong interests in the region, willing to put all kinds of clout behind the smaller countries’ sovereignty and independence.

Once, Britain filled that role. The Royal Navy helped the Baltic states win their independence after the first world war. Britain also ruled the southern part of Georgia as a protectorate from 1918 to 1920 and sent a daring expedition to Baku to push back the Bolshevik presence there. But Britain’s imperial star, with the shame and glory that it brought, has waned. Who can fill the gap?

Maybe China. It has plenty of reasons to develop a presence in eastern Europe, ranging from trade to geopolitics. It has expressed interest in buying Estonian Air (currently up for sale by SAS, its owner). That would give China a “domestic” European Union airline and access to a low-cost airport. Or imagine that China lends Ukraine some money to pay next year’s gas bill; perhaps in exchange for a favourable privatisation of some asset long-coveted by the Kremlin.

EU 1st president : Herman Van Rompuy

Le premier ministre belge Herman Van Rompuy a été choisi jeudi à Bruxelles. La Britannique Catherine Ashton va, elle, diriger la diplomatie européenne.

C'est le nouveau visage de l'Union européenne : le premier ministre belge Herman Van Rompuy a été désigné jeudi pour devenir le premier président permanent de l’Union européenne. Le choix a été annoncé officiellement au terme d'un dîner des dirigeants européens organisé à Bruxelles. Herman Van Rompuy reste peu connu sur le Vieux continent et n'aura pas la tâche facile pour faire mieux entendre la voix de l'Europe dans le monde.

Pour être désigné, Herman Van Rompuy a en fait bénéficié du soutien de poids de la France et de l'Allemagne. Le premier ministre belge est "profondément européen", c'est "un homme extrêmement décidé qui sait où il va, un parfait connaisseur de la politique européenne", a insisté Nicolas Sarkozy, assurant qu'il ne s'agissait pas d'un choix "par défaut". Pourtant, d'autres noms circulaient, à commencer par celui de l'ancien premier ministre britannique Tony Blair. Londres a finalement cédé.

Cheap smokes to become a thing of the past : EU

BRUSSELS — The days of taxed-to-the-hilt smokers bulk-buying cigarettes in cheap eastern European countries could be numbered following an agreement between European Union finance ministers on Tuesday.

Smokers in a many northern and western European countries have long complained of relatively high prices for their tobacco fix, in some cases such as Britain nearly doubled once excise rates are added in.

That in turn has triggered huge legal and black-market overseas trade amid an explosion in budget travel over the past decade.

However, ministers finally brokered a compromise deal in Brussels that will see minimum excise rates increased across the 27 EU member states by January 1, 2014, from 64 euros (96 dollars) per 1,000 cigarettes to 90 euros.

The minimum rate for top-sliced tax on cigarettes, the government take usually funnelled into national health expenditure, will also rise from 57 percent of the weighted average sales price in each market to 60 percent.

A transitional period will apply for countries that have only recently or yet to raise prices to those rates.

The world after 1989 : Walls in the mind

The ex-communist countries of central Europe have fared well, mostly, since 1989. But they still have to shed their image as poor and troubled relations.

PICTURE yourself in a smoky café somewhere in the middle of Europe—Prague, say—in late 1989. Sipping muddy coffee sweetened with gritty sugar, served by a sullen waiter at a greasy table, you are discussing the future with friends. Their ill-cut clothes are in dull blue, brown and green, the hallmarks of planned-economy tailoring. Your foreign gear stands out a mile.

In the café window, posters tell of a revolution won (see article). One is a poignant death notice for “Comrade Fear”—the once omnipresent and omnipotent embodiment of the totalitarian regimes, newly toppled by candles, flags and courage. Another poster shows a simple starburst, with the words “Gloria in Excelsis Deo”. Religion, like so much else, is now a matter of free choice. But a third poster shows the task ahead. It depicts Europe divided by a cliff that runs along the old Iron Curtain. A precarious ladder leads from the gloomy east to the sunny western uplands. “Back to Europe”, it reads. Before the communist era, countries such as Czechoslovakia, Poland and Hungary were at the centre of the continent, not its impoverished and isolated backwater.

The cliff looks dauntingly steep. Climbing it means long queues at Western consulates before facing the suspicious officials inside them. Western Europe may have cheered the revolution, but it fears a flood of riff-raff from the east. Abroad, easterners feel like humiliatingly poor relations. Their savings and salaries are all but worthless. You buy the coffees without a glance at the bill. When easterners head west, they pack sandwiches.

Ghosts of the past are everywhere. Some are welcome. Old songs, long-banned, are on the radio again. Heroes once vilified by official propaganda are celebrated. Other ghosts are more sinister. Central Europe before communism was no paradise. What will emerge as the region defrosts? Will Hungarians be content with their constricted borders? Will the Germans, so brutally deported from Silesia and the Sudetenland after the war, now demand justice? Will it be safer to be a Jew—or more dangerous?

Green shoots little comfort for crisis-afflicted Baltic

RIGA - Signs that Lithuania, Latvia and Estonia may be emerging from recession have brought little comfort in the Baltic states, as the public braces for the worst economic winter in years.

As ordinary people continue to feel the impact of rising unemployment and deep anti-crisis spending cuts, analysts warn it is too soon to say when the nightmare could end.

Nina Bazenova, a 47-year-old teacher in the Latvian capital Riga, is suffering.

Her salary has been cut by 20 percent while her workload has increased by a third, she told AFP.

She and a pensioner relative are supporting her three unemployed adult children -- the jobless rate in Latvia, a nation of 2.3 million, is an EU-high of 19.2 percent.

Along with a five-year-old grandson, they all live in a three-room apartment.

"I don't know whether or not I'll have a job after New Year's," she said, adding that she fears a replay of the hard times that hit the region following the demise of the Soviet Union.

The Baltic states won independence from Moscow in 1991. The region was hit by a shockwave as the communist economy fell apart.

In a report released this week, the World Bank said unemployment is expected to grow in the region, especially among young people.

"Almost one third of the economically active population below 24 years of age is unemployed in the Baltic countries," it said.

Analysts remain cautious about recent, positive economic data.

Eastern Europe and the Obama Administration

From Tallinn to Tbilisi, one of the most common criticisms of the Obama administration is that the U.S. is abandoning its new allies to Russia, and underestimating the threat Russia poses to these countries.  This notion persists in spite of the efforts made by the current administration and Vice President Biden who has become, in the words of Nicholas Kulish, the “reassurer-in-chief,” to restate  American support for these countries.

This charge, while not really accurate, reflects the specific security related concerns of many in Eastern Europe as well as broader questions regarding their new role in global politics. This Eastern European view was summarized in a recent open letter to President Obama from a number of very prominent Eastern European leaders including Lech Walesa, Vaclav Havel, Valdus Adamkus and Mart Laar.  The letter speaks of a “growing sense of nervousness in the region” and warns that “too narrow an understanding of Western interests does not lead to the wrong concessions on Russia.”

Citizens and leaders in Eastern Europe cannot be faulted for being worried about Russian policy in the region, particularly given the aftermath of the Russia-Georgia War of 2008.  However, there is a danger of several issues being conflated with this fear.  The serious concerns about Russia often contribute to a somewhat unfounded fear that the US is going to abandon its allies and principles in Eastern Europe as part of its goal of “resetting” relations with Russia.

Pro-Kremlin youth group to sue European newspapers

Luke Harding

The Independent is among newspapers facing legal action from youth group Nashi over claims it threatened journalist.

Its stunts have included hounding Britain's former ambassador to Moscow, comparing Estonia's president to a pig, and encouraging young patriotic Russian girls to wear knickers with Vladimir Putin's name on them.

But now Nashi – the Kremlin's fanatical youth organisation – has embarked on a new campaign against the west and its media, suing the Independent and three other European newspapers last week for libel.

Nashi has taken legal action against the Independent over accusations that its activists issued death threats against a Russian journalist. The organisation is also suing France's Le Monde, and Le Journal Du Dimanche, as well as the liberal German daily Frankfurter Rundschau.

Earlier this month, Nashi activists picketed the home of Alexander Podrabinek, a Soviet-era dissident, after he wrote an internet article criticising local officials.

The officials had forced the owner of a Moscow kebab shop to change its name from Anti-Soviet to Soviet. Podrabinek accused the current Russian authorities of trying to whitewash the image of the Soviet Union – prompting Nashi to demonstrate outside his flat and call for him to be kicked out of Russia.

SEB profit in Q3 beats forecasts ; Baltics more stable ....!

Nina Kolyako

Swedish banking group SEB posted a better-than-expected third-quarter operating profit on Wednesday and said growth in non-performing loans in the troubled Baltic region was slowing.

Operating earnings in July through September fell to 388 million Swedish crowns ($56.1 million) from a year-ago 2.5 billion, above a mean forecast of a 273 million profit seen in a Reuters poll.

SEB said in a statement it had decided not to apply for an extension of a Swedish government guarantee programme, put in place to help financial institutions through the worst financial crisis in decades. The bank has not yet utilised the programme, writes LETA.

"We see continued stability in the Nordic region and decelerating growth of non-performing loans in the Baltic countries," SEB CEO Annika Falkengren said.

Quarterly net credit provisions and losses of 3.3 billion crowns landed below a mean Reuters poll forecast of 4.1 billion.

SEB's results come a day after rival Swedbank cheered markets with upbeat comments forecasting slower growth in loan losses in the second half of the year, even after posting a third straight quarterly loss.

The bulk of Swedbank's provisions in the third quarter related to the Baltic States.

SEB in Estonia earned an operating loss of 1,223 million kroons in the first nine months of 2009, writes Äripäev.ee.

589 million kroons of the loss was generated in the third quarter.

Unlikely pirates : The "Arctic Sea" mystery's Estonia link

Gregory Feifer

TALLINN - Nearly two decades after the end of communism lifted the Iron Curtain from this tiny former Soviet republic, tourists from around the world stream to the capital's beautifully preserved medieval old town.

Outside the old fortress walls, glass towers and minimalist interiors symbolize the new postmodern sensibilities of a country that gave the world Skype, the Internet communications site that still maintains its headquarters here.

But despite appearances in this Baltic Sea country, Estonia's new membership of the European Union and NATO hasn't enabled it to escape the lingering shadow of its massive neighbor to the east.

The latest reminder came last summer. When Moscow arrested six Russians from Tallinn on charges of hijacking a missing cargo ship, Estonia was drawn into an international mystery that prompted speculation about a secret sale of Russian weapons to the Middle East.

Now Estonians are wondering whether their country's large and largely disenfranchised Russian minority is capable of producing the first modern-day pirates to seize a ship in European waters. Or whether innocent men were framed, possibly to target their country for political reasons.

Lost Generation

Twenty minutes outside its fairytale center, Tallinn shows a very different face: a gray sprawl of the concrete-slab apartment buildings you see throughout the former Soviet Union. It's in such a neighborhood called Lasnamäe that six friends and acquaintances accused of hijacking a ship sailing from neighboring Finland grew up. All are now in a Moscow prison facing more than 20 years in jail on charges of kidnapping and piracy.

Dombrovskis is convinced Latvia will get its loan

Latvian PM Valdis Dombrovskis, who’s currently visiting Estonia, confirmed that the state’s next year’s budget will be cut in required amount, which is why the agreement with international donors won’t be in threat.

“Yesterday I had a meeting with Joaquin Almunia, EU Commissioner in charge of monetary affairs and showed him our program for cutting costs. He approved that. The budget will be sent to the Parliament already this week and I’m sure that the agreement with international donors will be made,” Dombrovskis said.

Latvia must cut its budget by another LVL 500 mln, of which LVL 320 mln comes from additional cuts and the rest comes from tax increases.

“We want to impose taxes on the increase in capital, on dividends, cars; we will also extend the basis for individuals’ income tax and will raise some excise taxes,” explained Dombrovskis.

He believes that this will help to keep the budget deficit at 7.5 pct of GDP next year.

Dombrovskis excluded devaluation.