BONJOUR L'ESTONIE

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.

Today is a good day for making Internet history. Well done Finland!

Daniela Kustre

What might seem as an odhat made broadband something you'll never have to worry about for the rest of your life. According to the daily press in Helsinki, the Finnish government just introduced laws in which every person living in Finland has a legitimate right to broadband access. This makes Finland the second country in the world that placed the right to Internet access in its constitution, but unlike Estonia [pronounced Internet access as constitutional right on April 7, 2004]- Finland warrants a right to broadband access.

Starting from July 2010, every person in living in Finland will have the right to at least 1Mbps [broadband] connection, but the legislation doesn't end there. If you live in United States, please try not to have a heart attack after you read the following information: by the end of 2015, the legal right will be extended to an impressive 100Mbps broadband connection for everyone. Yes, a 12MB/s connection is your right, not something you need to beg for and listen to telecoms who say "it can't be done".

Now, if you are by any chance a naysayer and stating that "Finland is a small country", "they don't have infrastructural challenges" and other typical excuses, bear in mind that Finland has over 100,000 lakes and the majority of the country relies on lakes for water and relies on potable loos [no pun intended]. But that isn't stopping this ridiculously beautiful country to give Internet access to everyone. No monthly subscription for speed [data packages are another thing], no nothing. You get Internet just like you can breathe fresh air [which is indeed fresh in Finland, Ed.]. 

Higher alcohol taxes have not caused rush to Estonia

Private alcohol imports by Finns travelling abroad have been on the rise this year. However, a 10% increase in alcohol taxes in Finland has not led to a surge of travel to Estonia to buy cheaper booze.

Estonian retailers say that they have registered no change in purchases by Finns.

"At least that the moment, we haven't noticed it in any way. Sales will probably take off in November and December, but that always happens during the Finnish Christmas party season," says Imre Poll, director of the chain SuperAlko.

SuperAlko has two outlets in the harbour of the Estonian capital Tallinn and it is Estonia's largest wholesale and retail chain. Finns account for 95% of sales. The chain's director says there is no reason to believe that the latest tax rise in Finland will bring more Finns into his shops.

"There have been tax increases many times, both in Finland and in Estonia. It has never brought a spike in sales," states Poll.

No major changes have been noted on the Eckerö Line's Ms Nordlandia that operates between Helsinki and Tallinn, either.

"This tax rise is still so new that no difference has been seen, Sales have remained steady. I suspect, though, that when taxes go up once again in January, we will see sales grow," says Robin Roth of Eckerö Line.

Ailing fast : Bad news from Latvia raises fears of contagion across eastern Europe

The patient emerges from intensive care, hurls the medicine at the doctors and bites his blood donor. That may be an unfair characterisation of the recent news from crisis-stricken Latvia, but it is pretty much how outsiders see it. The prime minister, Valdis Dombrovskis, is refusing to make the spending cuts mandated by international lenders and has floated a new law that would partially expropriate foreign banks’ loan books.

It would be worrying enough if the European Union’s weakest economy defaults, devalues or implodes. But what scares outsiders more is the effect of Latvia’s latest wobble on other ex-communist economies, which until this week seemed to be surviving the financial crisis with less trouble than some had feared.

In recent weeks, the news from Latvia had seemed mildly encouraging, after a year during which the country has been kept afloat thanks to an $11.1 billion international bail-out. The breakneck decline has slowed: the economy is expected to contract by 17.5% this year, but by only 3% in 2010 and to return to growth in 2011, according to a forecast by SEB, a Swedish bank (and big lender to Latvia). The current account, which showed a yawning deficit of 1.42 billion lats ($3 billion) in the first seven months of last year has been transformed to show a 581m lats surplus in the same period of 2009.

The main outstanding issue is next year’s budget deficit. International lenders had softened the target to a mere 8.5% of GDP; the government still had to push through spending cuts of 500m lats to meet this.

Latvia says it is close to ending stand-off with bail-out donors

By Aaron Eglitis

Latvia is close to ending a dispute with international donors including Sweden and the International Monetary Fund that jeopardized its bailout loan and triggered speculation about a devaluation, the premier’s office said.

“Latvia is on the way to coming to an agreement with its international lenders,” said Liga Krapane, Prime Minister Valdis Dombrovskis’s spokeswoman, in a phone interview. The premier is in Helsinki today to meet Finnish leaders and the government will have a budget session on Monday, she said.

The IMF, European Union and Sweden, which agreed a 7.5 billion-euro ($11 billion) loan in December, have heightened the pitch of calls urging Dombrovskis to commit to budget cuts of 500 million lati ($1 billion) a year until 2012. Swedish Premier Fredrik Reinfeldt said on Oct. 5 Latvia “must correct” its deficit and Riksbank Governor Stefan Ingves has said the country may be left “in the cold” if it doesn’t comply.

“The message has been heard,” said Nils Muiznieks, a political scientist at the University of Latvia, by phone yesterday. “The chances of coming to an agreement have improved massively” after Swedish admonishments.

Sweden’s banks are the biggest in the Baltic states. Stockholm-based Swedbank AB, the region’s biggest lender, lost 6.8 percent last week and SEB AB, the second-biggest bank, dropped 4.1 percent on concern loan losses will soar.

‘Depressive Forces’

Estonia is developing the eGovernment in Haiti

Juhan Tere

The Estonian eGovernment Academy experts are compiling a handbook for implementing eGovenrment in Haiti, writes EPL Online/LETA.

Member of the management of the eGovernment Academy Ivar Tallo stated that it is a mistake to think as if it would be too early for Haiti to deal with constructing its eGovernment in its current phase of development.

“Nowadays, the development of eGovernment is an indelible part of each country’s development and the faster the information and communications technology is adopted, the more efficient and more transparent the State administration becomes,” he explained.

Tallo said that Haiti has shown good preparedness for implementing e-solutions. While seven years ago, only 1.9% of residents of Haiti used the internet, today there are more than ten% of users.

Haiti is particularly interested in Estonia’s experience in developing ID cards and the citizens’ portal X-tee as well as in geographic information system, the legislative framework supporting the information society and the use of ICT in education.

Eastern Europe must rethink its hardline policy on drug use

By Kasia Malinowska-Sempruch (director of the Global Drug Policy Program at the Open Society Institute)

It was two decades ago this summer that communist rule began to implode from Tallinn in the Baltic to Tirana in the Adriatic, ushering in free elections, market reforms and expanded civil liberties. Since then, the countries of Central and Eastern Europe have come a long way. Many are now members of the EU. My homeland, Poland, has a steady economy and a thriving media.

Yet Poland, like many of the other new democracies in our region, remains stuck in the past when it comes to the humane treatment of drug users. Indeed, throughout the former Soviet bloc, there is a disturbing trend in using outdated, conservative and heavy-handed policies to address drug abuse.

For example, Gdansk — the birthplace of the Solidarity movement — does not have a single methadone treatment center. People must travel for three hours to get the medicine that is proven to control cravings and reduce the harms of drug use. They are the lucky ones. Only 5 percent of opiate users in Poland have access to methadone at all, compared with 40 percent in Germany.

As economy deteriorates, analysts say chances rise Lithuania will seek bailout loan

LIUDAS DAPKUS

VILNIUS — Lithuania's increasingly desperate economic situation may make it the next country in Eastern Europe to ask the International Monetary Fund for emergency loans.

Stunningly bad growth numbers for the second quarter — the economy shrank 22 percent compared with the same three months a year ago — were significantly worse than most analysts' expectations and have led them to think the small Baltic country of 3.4 million will soon follow its neighbor Latvia in seeking a bailout.

Revenues are falling short as the recession dampens economic activity and tax receipts, and the center-right government is being forced to borrow on international capital markets and raise taxes to fill a widening budget gap.

"I'm really surprised that the government has not gone to the IMF yet and instead is borrowing money at a much higher interest rate from other sources," Rimvydas Valatka, an analyst at Lietuvos Rytas, Lithuania's leading daily, said Thursday.

He said it was "unacceptable" that the government had issued a euro500 million, five-year Eurobond in June with an annual interest of over 9 percent instead of borrowing from international lenders at a much lower rate.

Kestutis Glaveckas, chairman of parliament's finance committee, said it was "unlikely" that Lithuania would avoid seeking a bailout loan.

Euro-zone prices fall for second month

AOIFE WHITE

BRUSSELS - Falling prices and rising unemployment in the 16 nations that use the euro show an economy still mired in recession despite recent green shoots, according to EU statistics published Friday.

Euro-zone consumer prices fell for a second month in July as the June jobless rate rose to a 10-year high to 9.4 percent, the EU statistics agency Eurostat said.

Unemployment lines grew by 158,000 from May to June in the 16 nations that use the euro, it said, as companies make cutbacks to cope with falling demand for goods and services at home and abroad. Some 3.17 million more people are out of work compared to June last year.

Lower demand for energy and other goods has caused prices to plunge in the region. Eurostat sees disinflation for the 16 nations that use the euro for a second month in a row after the year-on-year rate shrank 0.1 percent in June and hit zero in May.

This dampens brighter news about the economy this week. Euro-zone business and consumer confidence figures rose to an 8-month high in July as companies and shoppers were more optimistic about coming months.

Industrial managers also sees the recession bottoming out with companies restocking supplies they ran down in recent months.

 

Call for urgent action to cut pensioner poverty

Government urged to do more as new statistics show that 30% of over-65s in the UK are living on incomes far below the national average.

Reform of the pensions and benefits system is urgently needed to tackle pensioner poverty in the UK, which is among the worst in Europe, campaigners said today.

The call for action came after European commission statistics showed that 30% of over-65s in the UK were living on incomes far below the national average. That was the fourth highest level in Europe, according to the figures, with pensioners in Romania, where 19% fell below the poverty threshold, among those faring better than in the UK.

Only pensioners in Cyprus (51%), Latvia (33%), and Estonia (33%) came out worse. The EU average was 19%.

The figures came ahead of the work and pensions committee's review of government efforts to tackle pensioner poverty, which is due to be published on Thursday.

Michelle Mitchell, charity director for Age Concern and Help the Aged, said the report demonstrated that even in the years of growth before the recession, many older people were being left behind.

Russian rights !

Starting from July 21, Russian security services will have the right to open and inspect postal items without the decision of a court, according to a new order from the Ministry of Communications.

Secret services will be granted access to all the personal electronic information databases of the state postal service. Post offices are planned to be equipped with special isolated rooms for the inspection of the postal items of average citizens. None of these actions will require a court order.

The order does not even mention that, according to Russian law, any inspection of post should be made after a court decision only.

Legal basis
The Russian Constitution proclaims “the right to privacy of correspondence, of telephone conversations, postal, telegraph and other messages.”
Moreover, a decree of Russia’s Supreme Court of 2000 ruled that postal operators may grant access to Contitution of the Russian Federation.

Article 23

1. Everyone shall have the right to the inviolability of private life, personal and family secrets, the protection of honor and good name.
2. Everyone shall have the right to privacy of correspondence, of telephone conversations, postal, telegraph and other messages. Limitations of this right shall be allowed only by court decision.

Article 24

1. The collection, storage, use and dissemination of information about the private life of a person shall not be allowed without his or her consent.
2. The bodies of state authorities, local governments and their officials shall ensure for everyone the possibility of access to the documents and materials directly affecting his or her rights and freedoms, unless otherwise provided for by law.
personal postal items for special service organizations only in cases where they are provided with the necessary documents from a court. Any other demands have no legal basis and contradict the Constitution of the Russian Federation.

The forgotten underclass

As youth unemployment reaches its highest level for 16 years, the future looks bleak for today's young people not in education, employment or training (Neets).

By Max Davidson

"Any luck?" I ask my daughter, as she returns from her latest foray into town. Her glum face gives the answer. She is leaving school today and, in October, will be going to university – Oxford, if she gets the grades she needs. In a perfect world, she would get a summer job, earn some money, then go travelling for a few weeks. But not much about the world is perfect these days. That low-paid summer job is proving far more elusive than a place at university.

In the recession-hit Cotswolds, where she lives, the temporary jobs in shops and pubs and cafés are just not there, or have already been taken, probably by someone from Warsaw or Tallinn. She touts around her neatly typed CV, littered with As and A*s, but nobody wants to know. "Sorry, luv. Perhaps at Christmas..."

Friends with children in a similar position have the same story to tell. The son of a friend in Wimbledon is typical. After weeks of rejection, he thought he had finally got lucky when he spotted a vacancy in a Vietnamese restaurant. "I'm sorry, we only recruit Vietnamese." "But I thought that was illegal," he stammered, drawing on his A-level politics and economics. "It's how we do things here," came the reply.

Even at the All England Club, where skilled labour is needed to pour Pimm's into a glass without spilling it, 20 per cent fewer catering staff were recruited this year. Not even the Andy Murray magic can generate jobs in the depths of a recession. If the Scot couldn't play tennis, he would probably be out of work himself.

Youth unemployment is at its highest for 16 years, rising to 726,000 in the three months to the end of May, a quarterly increase of 95,000, according to figures released yesterday. Earlier this month it was reported that, among 16 to 24 year-olds, the Murray generation, the number of Neets in the UK is about to pass a million for the first time. Neets – and it is a term we are going to hear a lot more – is government jargon for young people "not in education, employment or training". The forgotten underclass.

Obama surprises Russia

By Vladimir Ryzhkov

U.S. President Barack Obama’s visit to Moscow was a master class par excellence in presidential leadership. He knew exactly why he was coming to Russia and took away with him everything he had wanted. Even while lavishing praise on the Russian leaders, Obama did not give ground on a single position. He achieved what was on his agenda in his negotiations with President Dmitry Medvedev while at the same time giving tremendous support to Russia’s civil society.

This is not just a new president. This is a completely new type of global leadership. If Obama is able to manage the unprecedented challenges facing him, and if luck goes his way, he has a chance of becoming one of the greatest presidents in U.S. history.
The top foreign policy priorities for the Obama administration include the dangerous region spanning Afghanistan and Pakistan, strengthening the Iraqi state while gradually withdrawing U.S. troops from that country, Iran’s nuclear program, and the settlement of the Israeli-Palestinian conflict.

Coalition forces are currently waging a major offensive in southern Afghanistan. Given that situation, Moscow’s decision to allow U.S. aircraft to pass through Russian airspace is extremely valuable and marks an important victory for Obama. Russia gains from the arrangement as well because it is no less interested in stabilizing the huge powder keg on its southern flank.