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.

Estonia had by a fifth less cash in circulation in November 2009 y-o-y

There was 9.6 billion kroons of cash in circulation in Estonia at the end of November 2009, by 20% less than at the same time last year, Postimees Online/LETA reports.

The amount was smaller than that at the end of August 2005 latest, Bank of Estonia data indicate.

People use account money more actively and conduct more electronic payments, explained Ingrid Mitt from Bank of Estonia PR bureau. Economic fall may also have affected the amount of cash in circulation.

Account money totaled 24.6 bln kroons at the end of November, 2% more than a year ago.

Bank of Estonia balance volume was 43.3 bln kroons at the end of November or 7% more than a month before. The central bank’s gold and net foreign currency reserves grew in November by 8% to 40.4 bln kroons.

Juhan Tere

Estonian state institutions make preparations for transition to the €uro

Estonian state institutions are already preparing for transition to the euro because if Estonia manages to join the euro area in 2011, systems have to be ready six months in advance, National Broadcasting/LETA reports.

"The accounting systems of all institutions handling money and other much more specific systems have been counted by now and changing them has been started or is about to start,” said finance ministry administrative policy deputy chancellor Marek Helm in ETV’s morning programme.

“All institutions and organisations have to achieve physical readiness by July 1, 2010. All have to report a half a year in advance that they are physically capable of starting to use the euro,” said Helm.

He noted that for more critical systems it is a one-time, very strong and serious effort and thus, it has been prescribed that for example changing the Social Insurance Board and Tax and Customs Board information systems will be supported with EU funds.

Helm was unable to say how much changing all information systems would cost since not all state procurement contests have been held.

On Tuesday, an expert committee will convene at the finance ministry to review the state of preparations.

Juhan Tere

The decline in business sector continues

According to Statistics Estonia, in the 3rd quarter of 2009, the net sales, total costs and total profit of the business sector decreased compared to the previous quarter as well as to the same quarter of the previous year.

According to the seasonally adjusted data, the net sales of enterprises decreased 9% in the 3rd quarter of 2009 compared to the 2nd quarter. If in the first half of the previous year the fall remained within 1–3% each quarter compared to the previous quarter, then starting from the 3rd quarter of the previous year the decrease has dropped to 7–9% already.

In the 3rd quarter of 2009, enterprises sold goods and services for 126 billion kroons at current prices, i.e. for a fourth less than a year ago. Although the net sales of construction and education enterprises decreased the most, the decrease in the sales of the total business sector was mainly influenced by the wholesale and retail trade and manufacturing enterprises due to a bigger share of these economic activities in gross net sales.

The total profit of enterprises amounted to 4.3 billion kroons in the 3rd quarter, which was by 63% smaller compared to the same quarter of the previous year and about a fifth smaller than in the 2nd quarter of 2009. Compared to the 3rd quarter of the previous year, the total profit decreased the most in transport, construction and wholesale and retail trade. Agriculture, forestry, education and repair of computers and personal and household goods were running at a loss.

Compared to the 3rd quarter of the previous year the enterprises’ total costs decreased 23%, whereas personnel expenses 19%.

Consumer price index decreased in November

According to Statistics Estonia, the consumer price index decreased 2.1% in November 2009 compared to November of the previous year, and 0.2% compared to October of the current year.

Goods were 2.2% and services 1.8% cheaper compared to November of the previous year. Food products were 5.0% cheaper and manufactured goods were 0.3% more expensive.

Regulated prices of goods and services have risen by 2.0% and non-regulated prices fallen by 3.3% compared to November of the previous year.

Compared to November of the previous year, the consumer price index was mainly influenced by the price decrease of food by 7.1%, of which dairy products accounted for two fifths (price decrease 14.7%) and fresh vegetables and fruits for over a third. Heat energy was 15.3% cheaper and motor fuel 7.5% more expensive compared to the same time of the previous year.

In November compared to October, the consumer price index was mainly influenced by some reduction in the prices of various goods and services related to recreation and culture and by a rise in the prices of motor fuel. The prices of airline tickets decreased the most (8.6%) and the price of butter increased the most (5.8%) compared to the previous month.

Change of the consumer price index by commodity groups, November 2009 Commodity group November 2008 – November 2009, % October 2009 – November 2009, % TOTAL -2.1 -0.2 Food and non-alcoholic beverages -6.8 -0.3 Alcoholic beverages and tobacco 0.3 0.1 Clothing and footwear 0.4 -0.1 Housing -7.0 -0.4 Household goods 1.0 -0.4 Health 2.3 0.0 Transport 1.2 0.4 Communications 0.6 0.0 Recreation and culture -1.9 -1.5 Education 1.8 0.0 Hotels, cafés and restaurants -3.1 -0.3 Miscellaneous goods and services 7.7 0.0

For further information: Viktoria Trasanov Head of Price and Wages Statistics Department Statistics Estonia Tel: +372 6259 240

Coca-Cola to close its Tallinn plant - lay off tens of people

Coca-Cola is closing its Tallinn plant and will lay off tens of people. Well, as mentioned several months ago, time has come and it is "Good-bye" to another, this time: Coca-Cola!

Postimees reported that Coca-Cola HBC, the Coca-Cola bottler in Estonia, plans to transfer production of drinks into plastic PET bottles from Tallinn to Lithuania and the production of drinks in glass bottles from Tallinn to Poland. According to the paper, 66 people would be made redundant on April 1.

The company plans to build a new plant in Latvia. "In the meantime,  production of PET bottles will be transferred to our Lithuanian plant in Alytus and production of glass bottles to Poland," said Piret Jaaks from Coca-Cola HBC.

Jaaks said that the company has found suitable vacant land in Ropaži in Latvia and plans to purchase it in the near future.

Tallinn plant was opened in 1992.

Toomas Hõbemägi

City hall versus national government : Tax war

TALLINN — Tallinn Mayor Edgar Savisaar started a tax war Wednesday between the capital city and the Estonian government, saying the municipality would scuttle a 1 percent sales tax hike if the state will reduce the income tax by 2 percent.

On Tuesday the Tallinn municipal government proposed establishing a 1 percent sales tax and boat tax to revive of city’s declining revenues, but received negative reactions from the Estonian Taxpayers Union and the national government. Savisaar then agreed to forgo the tax hike on the condition that the state will lower the income tax back to 18 percent, as it initially was before the crisis.

The national government isn’t amused. In an interview with Äripäev published Thursday Minister of Finance Jürgen Ligi said that bargaining with taxes is revenge toward the government and Savisaar’s “we increase our deficit if you increase yours” attitude lacks financial logic. Ligi calls the Tallinn 2010 budget draft one big mess, as it’s not reasonable to consider a loan a source of income.

Ligi told Äripäev that according to law it is not possible for Tallinn to take a loan, as the city has crossed the 60 percent debt limit. The mayor’s statement calling the sales tax as a “luxury tax” provoked Ligi to say it’s a “luxury tax” because it pays for the city’s luxurious lifestyle as the salaries of public officials remain the same and no jobs are cut.

Annika Vilu, a finance ministry spokeswoman told Baltic Reports that the ministry does not consider taxes are a subject of bargaining, therefore the ministry will not negotiate with the Tallinn municipality on the issue.

Vaccinations against A/H1N1 flu administered free of charge for risk groups

The Government decided that people in risk groups would get vaccinations against the A/H1N1 flu free of charge. According to Minister of Social Affairs Hanno Pevkur, the vaccine should arrive in Estonia by 15 December at the latest, and it is planned to start vaccinations immediately thereafter. In Estonia, vaccinations will be voluntary.

I am most pleased that the Government considered it necessary to provide protection to all those in risk groups, regardless of the financial means of the person, said Minister of Social Affairs Pevkur. Vaccinations against the A/H1N1 flu will be administered primarily by family physicians, based on their practice lists. Vaccinations for expectant women will be administered by women´s health centres, and by other healthcare institutions for pregnant women registered with them. Vaccinations for healthcare professionals will be carried out by a specific order of the healthcare provider.

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.

Tallinn public transport going up from January 1st, 2009

TALLINN — Sorry suburban commuters! While residents will pay the same rate, visitors using the Tallinn public transportation system will pay more starting from January 2010.

Tallinn’s municipal government proposed a regulation Wednesday increasing public transportation prices for city’s non-residents to raise additional money while avoiding extra costs for residents coping with the economic crisis.

The price of a monthly pass will stay at 290 krooni (€18) for residents but go up to 365 krooni (€23.33) for non-residents. The quarterly pass will also increase 20 percent. Students living outside Tallinn will loose their discount monthly pass of 115 krooni (€7.30) and have to pay the full amount.

Residents aren’t totally off the hook, though. One hour tickets will be raised by one kroon to 16 krooni (€1.02) from ticket vendors and 22 krooni (€1.40) from bus drivers.

The state does not offer financial support for municipal transportation routes within city limits and only 30 percent for routes leaving city limits. All expenses of public transport in Tallinn have to be covered from city’s budget and ticket sales revenues.

The Tallinn Transportation Authority did not respond to requests for comment on the price hike.

Kai Joost

Poor man status awaits if Estonia adopts euro too soon

TALLINN - Rapid accession to the eurozone is a trap for the future economic development of Estonia, says Professor of Nord Academy Ivar Raig, reports news agency LETA.

He says that while most Estonian politicians and economists claim that euro adoption would promote business confidence towards Estonia, drawing in new investment leading to a reduction of unemployment, the euro would actually stall economic growth and structural reforms, and end up increasing social problems and unemployment.

Tallinn should tax tourism industry : Sulev Mäeltsemees

Cash-strapped City of Tallinn should consider imposing new taxes on the tourism industry, says Sulev Mäeltsemees.

In an interview to municipal newspaper that is published by the Tallinn City Government, Mäeltsemees who has been chairman of the Tallinn City Council says that the city needs to introduce new local taxes or issue bonds to overcome the budget shortage.

Many large towns tax hotels, for instance, When a tourist visits the town and spends thousands in local restaurants, 10% to the local government budget may go unnoticed. And tourists are using services subsidised by local government during their stay," he added.

The right to impose local taxes is the prerogative of local governments," added Mäeltsemees.

Tallinn City Government is due to discuss its 2010 budget today. City government officials have promised to issue a press statement after the meeting.

Christmas Jazz with the great and world-known violin virtuoso Jean-Luc Ponty

Time: up to the 17th of December
Location: Different locations in Tallinn
Website: www.jazzkaar.ee

The Christmas Jazz festival is now in its 14th outing. The festival actually got started by chance when the world-famous Danish bassist, Nils Henning Orsted Pedersen, who was too busy to come to the annual Jazzkaar Festival in the spring, agreed to come to Estonia in December 1996 instead together with a Danish TV crew.

This year's Chiristmas Jazz will raise spirits with 20 concerts in Tallinn, Tartu, Pärnu, Viljandi and Otepää. Festival's headliners are violin virtuoso Jean-Luc Ponty from France, bossa nova singer Giana Viscardi from Brazil and club star Christian Prommer from Germany. On the program are a number of local stars stars such as Ivo Linna, Maian Kärmas, Helin-Mari Arder and Hedvig Hansot.

Tickets available at www.piletilevi.ee

More events in Tallinn at www.tourism.tallinn.ee

A H1N1 Influenza

The Estonian Health Protection Inspectorate has created a telephone hotline for questions about the novel influenza A/H1N1 (human swine influenza).

The hours of operation for the phone line with number 510 2270 are Monday through Friday from 8.00 to 17.00. The standard per-minute rate as specified in the service package is applicable. During evening and weekend hours you can call the family physician hotline at 1220.

Estonia has lost her most famous toque

Imre Kose´s Bellavista company is bankrupt ... At the present time, it is not known who will pay for the EEK 3 million arrears of taxes.
So, wave "good-bye" to the Vertigo, to Mercado and other "Boulangerie" + "Bestseller" ...

The current economic situation has also put a halt to the top chief´s ascension as it has done to the day to hundreds of small or smaller businesses. But either one pays a minimum salary to one´s employees, else one doesn´t! But do not wait for support from the state.

See Vello´s article of last Saturday only : Chefs We Dig: Imre Kose

Given the all-consuming quiet caused by the recession, I thought I'd stumbled into a speakeasy in prohibition-era America. Vertigo is not a small restaurant, and conversation and laughter emanated from both of its large dining rooms.

And the chef was in the house. Imre Kose was dashing back and forth from kitchen to dining room, speaking with guests, holding hurried court as chefs do. And his English. Oh, his English. It's hard to pin down an Estonian accent. To me, it seems less an accent and more a brief pause on the way to having no accent whatsoever. But Kose's accent isn't even that. He's somehow made English his own. Perhaps due to a blend of natural charisma and having to be heard over chattering diners, something unique has emerged. Were I Estonia's dictator, I'd send language teachers and academics to study it.

Over a Jack on the rocks I watched a parade of violin-case-packing middle-aged women enter the restaurant. They were either visiting orchestra members with instruments too expensive to check, or they were about to shoot up the place. Later, halfway into a rack of lamb and Imre approached our table: "There's a Filipino woman, part of some orchestra, and I half-jokingly asked her if she wouldn't want to play a song..." And then there she was, violin unsheathed and under her chin, playing for our table. Playing for the restaurant. Playing for Imre.

Tallinn to host Eastern Europe film market

New event is part of the Black Nights Film Festival

By Vladimir Kozlov

MOSCOW - A new film market for projects from countries with smaller film industries in Eastern and Northern Europe and Central Asia is to be launched in Tallinn on Nov. 30 as part of the Black Nights Film Festival, one of the main industry events in the Baltic region, which runs through Dec. 6.

Organizers of the event told THR they are going to focus on new films from the neighboring regions and smaller film industries, such as Lithuania, Latvia, Estonia, Azerbaijan, Kazakhstan, Uzbekistan, Kyrgyzstan, Tajikistan and Georgia, Russia. Producers from Finland, Norway and Russia are also to take part in the new film market.

"The goal is to enhance audiovisual cooperation on both sides of the Eastern border of European Union and Nordic countries and to give filmmakers visibility and access to the bigger audiovisual markets around the world," the organizers said in a statement.

The film market is to be preceded by the From Books To Films event on Nov. 29, a literary rights market presenting and promoting books from the neighboring regions that have potential for screen adaptation.

Kohtla-Järve mayor, businessmen detained

The security police detained yesterday Jevgeni Solovjov, mayor of Northeast Estonian town of Kohtla-Järve and two local businessmen, Nikolai Ossipenko and Rinat Hamidullin,  under suspicion of bribery.

Ossipenko's company N&V has for years won large road maintenance contracts and together with Hamidullin who owns a construction company built a house for the mayor for free.

The security police searched through 20 offices, companies and homes and confiscated about 20 computers.

We are investigating four public tenders. The most recent one was a 229 million kroons four-year contract for road and green maintenance in Kohtla-Järve that was won by Ossipenko's N&V," said the prosecutor, adding that the winner of the tender is suspected to have already agreed before the tender was announced.

Ossipenko has refused to comment.

Former high-ranking police officer Koit Pikaro who has now retired said that Ossipenko knows the police from inside out and has money. "He has been corrupt for all his life and could get off easily also this time. Perhaps charges will be brought, but considering the court practice in Northeast Estonia, I would not see him get convicted," said Pikaro, adding that even members of the local mafia have admitted that Ossipenko is too strong for them.

Man kills woman in Tallinn park, on the loose

TALLINN — An unidentified man allegedly attacked two women with a baseball bat in daylight Monday morning at Toompark in Tallinn’s Old Town, fatally wounding one. He remains on the loose.

The attack took place just before 8 a.m. in the vicinity of the Shnelli Pond and Patkuli Stairs, and the victims were found not far from each other. One woman, 34-years old, died in Mustamäe Hospital Wednesday evening, confirmed Maria-Elisa Tuulik, the Northern District Prosecutor’s Office press specialist. The other woman, 33-years old is in stable condition.

The motive of the attack are unclear. It is not known whether the attacker knew his victims. Police said the two women did not know each other and are not releasing the victims’ names or familial status.

Another incident took place in the Mustamägi neighborhood on Tuesday morning before 9 a.m. when a male with a similar description harassed a woman in Lepistiku Park near the Magistral shopping center. Tuulik said it’s not certain if it’s the same attacker.

“There was no physical contact between the woman and attacker,” Tuulik told Baltic reports.

The suspected attacker is 180-185 cm tall, is thin and has dark hair and a dark tan complexion. The man may be wearing a white cap and a dark jacket. An updated profile sketch is being prepared.

Police have received many tips but no suspects have been named or arrested.

The Toompark area is generally considered a safe neighborhood in Tallinn.

“There have been misdeeds, but only a couple crimes,” confirmed Tuulik.

Tallinn medical clinics refused to treat a foreigner with flu

An exchange student from Portugal who was undergoing traineeship in Tallinn and went down with flu was almost left without medical treatment.

Eesti Ekspress wrote this week that the young man was in bed for two days with high fever of 39 degrees without getting any medical help. Finally, his colleagues in the place of traineeship contacted various medical clinics, infection centre and  ambulance and asked them to help, but instead of helping him they suggested to try other establishments. They even contacted the ministry of foreign affairs and ministry of social affairs, all in vain. Shame on you, Estonia.

He was explained that the Estonian family physician system does not provide for clear guidelines on what to do with a foreigner who lives in Estonia and contracts flu.

Things started to move only after the case was taken over by Peeter Mardna, head of the supervisory department of the Tallinn municipal healthcare service, personally.

Mardna said that he had to tell people what and how to do. "Such a situation is unforgivable. This is tarnishing the image of our medicine when staff refuses to take responsibility for treatment of an EU citizen," he said.

One colleague of the Portugese student said that it was unlikely that the foreigner had been able to undergo the whole process himself.

Estonia lacks a coherent alcohol policy

The head of the Estonian Association of Food Industries Sirje Potisepp stated that Estonia lacks alcohol policy, writes the National Broadcasting/LETA. In the past two years, excise taxes on alcohol have been raised by four times; if one were to include the surge by 10% that will enter into force in January, it could be stated that the excise tax rate on alcohol has grown by a total of 43%.

Potisepp noted that raising excise taxes is not the correct form of alcohol policy. “If the policy is restricted to raising excise taxes, I am of the opinion that this is not a correct way of forming a policy. The alcohol policy should require prevention, improving the culture of alcohol consumption and also taking into account the financial side so as not to grant opportunities to the illegal market,” she explained.

Producers of alcohol state that sales of beer has been falling in the part few years and the increase in the excise taxes contributes to this trend.