BONJOUR L'ESTONIE

Record number of passengers on Tallinn-Kuressaare

1481 passengers have been flying or have bought flight tickets for October 2008 on the Tallinn-Kuressaare with Estonian Air. This is a record number of passengers in one month on that route

In October 2007the number of passengers on the Tallinn-Kuressare route was 1005, while the average monthly passenger number in the first nine months was 925. This means the number of passengers in October 2008 has increased 33% y-o-y, and is 37.5% above the average monthly passenger number in the first nine months of 2008.

This positive development is the resume of active sales in all Estonian Air sales channels and through partners in Estonia and abroad.

- Although October is not over yet, the sales on Tallinn-Kuressaare route are excellent. The strong growth in passenger number proves that the decision to bring bigger aircraft on the route was justified. Deeper analysis of the demand together with possible changes in the flight schedule can be made together with Saare County Government after some time, since every new route needs a certain start-up time,” said Andrus Aljas, Estonian Air President and CEO.

Government’s bluff is putting eurozone entry at risk

Toomas Hõbemägi

Äripäev estimates that the state budget deficit in 2009 could reach EEK 8.3 bln.

According to the paper, growing budget deficit means that in spite of falling inflation, Estonia may lose the hope to meet the eurozone entry criteria for budget deficit and could have a budget deficit of over 3 percent already in 2009.

“This would be a disaster,” says Taavi Veskimägi, former Minister of Finance and a current MP for IRL. Veskimägi says that if the government fails to launch key structural reforms for cutting public spending now Estonia will have a budget deficit above the Maastricht criteria in 2010.

“To say that the 2009 draft budget is balanced is fiction. Budget is balanced not when the government says it is balanced, but when budget revenues actually covers budget expenditure,” adds the MP.

Estonian Finance Minister Ivari Padar says that no-one knows exactly what will happen in 2009. “Even Lehman Brothers was happily making hay last summer,” he said, commenting the rapid collapse of one of the largest US investment banks.

One institution that is critical of Finance Ministry’s optimism is central bank that this week published its economic outlook. Eesti Pank said that it expects the economy to contract 2.1 percent fro this year in 2009, but did not rule out that the decline may be as high as 4 percent.

Moreover, the Ministry forecasts that wages will grow 7.5 percent next year. Eesti Pank says that this is a fairy tale and expects zero growth.

Estonian Air pilot paid cash for fuel

Interesting !

Toomas Hõbemägi

A flight of Estonian Air was delayed last week when the pilot had to pay cash for fuel.

Postimees writes that an Estonian Air flight that was leaving Munich for Tallinn on Saturday was 1.5 hours late with departure. The reason was strange : the aircraft was out of fuel and the re-fueller did not accept the credit card of Estonian Air so that the plane’s captain was forced to go to Munich to withdraw cash.

“We waited in the plane for twenty minutes until the co-pilot came and  told us that the plane had not been re-fuelled since the airline’s credit card was not accepted,” commented Toivo Maimets, professor of Tartu University who was on board of the flight.

“The co-pilot said that the refueller was accepting only cash and that the plane’s captain had gone to look for it.” Passengers were sent to the waiting area to wait for the Tallinn departure.

“This is unbelievable. Perhaps they will tell me the next time also that my credit card is not trusted ?” wonders Maimets. The fuel line was still attached and the trip started 1.5 hours later. What happened ? Was the mistrust caused by the bank or by Estonian Air ?

Estonian banks cheat tens of thousands of borrowers

Marge Tubalkain-Trell

Estonian consumer protection demands banks to stop taking hidden additional interests from housing loan clients, Eesti Ekspress writes.

Most consumers haven’t heard how banks earn extra profits on them.

Most of the housing loans in Estonia are given in euros. That is on the paper only. Actually people will get and return the loan money in euros. Only few borrowers know that banks don’t use central bank’s official rate when converting money, but their own commercial rate. And that allows banks to earn easy profit.
For example Swedbank’s rate differs from official rate by 5.2 cents for every euro. In other words, borrower pays 0.3 pct more than official rate is.

According to Consumer Protection this is unfair trading.

Through machinating with Euro rate banks can show interest rates lower and loan expenses smaller than they really are. Borrowers often fight for even 0.1 or 0.2 pct lower interest. They don’t notice the rate through which bank takes back the win and even more.

The fact that loan calculators don’t show sums in Euros or exchange rate for Euro, adds more illusiveness to the process. But most of housing loan calculations are in Euros.

Even though Mrs Tubalkain-Trell´s English is a little hard to understand (the reason why I keep her notes here to the lowest), I do hope that you can make something out of it too ... !

So, next time watch it guys and dolls ... ! and borrow your money in EEK as your bank offered it to you in the first place .... But you prefered EUR ...  So do not complain now ... ! This is the unfortunate reality ...

Estonia release postage stamp in honour of Gerd Kanter

At the end of September Estonian Post Ltd. released a postage stamp dedicated to Olympic Discus Champion Gerd Kanter.

After the release of the first Estonian postage stamp dedicated to the gold medal winner Erki Nool in Sydney Olympic Games in 2000 it took eight long years before having the opportunity to release another postage stamp honouring an Estonian champion of the Summer Olympics.

In the years between skiers Andrus Veerpalu and Kristina Šmigun brought glory to Estonia with their feats at the Winter Olympics. Stamps were released in their honour respectively in 2002 and 2006.

The postage stamp "Gerd Kanter - Olympic Champion" with a face value of 5.50 EEK was printed at the Vaba Maa printing house with a print-run of 300,000.

The stamp was designed by artist Lembit Lõhmus. The presentation of the new postage stamp honouring the Olympic champion took place in the atrium of the Rotermanni trade centre on September 25 and was also attended by Kanter himself.

With grateful thanks to Erich Teigamägi from the Estonian Federation

Elion gains IPTV subscribers

Chris Dziadul

Estonia’s Elion ended Q3 with 75,400 subscribers to its IPTV service DigiTV, or 11% more than three months earlier.

Elion, which is part of the incumbent telco Eesti Telekom, launched DigiTV in Tallinn and six other cities in April 2006.

It also operates a cable service known as Elion Kaabel.

Elion’s main competitors in the fixed line sector are Tele2 and Elisa, neither of which are believed to have yet entered the IPTV market.

Illuminating idea for Christmas shopping

A weekend away to visit a Christmas market is becoming increasingly popular and a new brochure from Kirker Holidays is entirely dedicated to these festive breaks.

There's a wide choice of destinations, from the original home of the Christmas market - Germany - where cities on offer include Cologne, Berlin, Dresden and Munich, to more unusual suggestions, such as Krakow, which boasts one of the largest medieval town squares in Europe.

Eastern European cities are also featured, including the picturebook town of Tallinn, and even Scandinavia gets a look-in, with Stockholm and Copenhagen both included.

A three-night break to Cologne costs from £560, while Tallinn costs from £568 and Krakow from £469. These prices include three nights' B&B accommodation, return flights or first-class travel on Eurostar and transfers. Contact 020 7593 2283 or see kirkerholidays.com.

Estonia introduces the travel-free travel fair

Tallinn - Estonia has already given the world the internet telephone service Skype and recently opened a NATO cyberdefence academy in its capital, Tallinn. Now the Baltic nation, which is so in love with all things online that it sometimes brands itself "e-stonia," has come up with another internet first - a virtual travel fair.

The inaugural online travel fair, entitled "Travel Expo," runs October 27 through November 5. It is the idea of Estonian company Online Expo, run by young entrepreneurs Anna Lepp and Sergei Semjonov.

"We visited a traditional exhibition in Russia about a year ago," Lepp told Deutsche Presse-Agentur dpa. "When we were driving back to Estonia afterwards, we saw we had a huge amount of printed material to read, but we still had to go to the internet to get additional information. We asked ourselves 'Why can't we do the whole exhibition online?'"

Police search Parnu Mayor’s office

in cooperation with BNS

PÄRNU – Estonian Security Police have searched the offices of the mayor and deputy mayor of Pärnu as part of a widening investigation into possible corruption surrounding the city’s road maintenance tender.

"The proceeding was opened to look into suspicions that officials of the Pärnu city government tried to groundlessly create favorable terms and advantages for a company participating in the public procurement tender for the maintenance of Pärnu roads and streets that was announced in May," spokeswoman for the prosecutor's office Kulli Kivioja told the Baltic News Service. 

Even though the company did not win the tender, it is suspected that officials bended the public procurement rules in order to ensure the bid of the preferred company succeeded, she added.

The Pärnu unit of the security police and the prosecutor's office launched criminal proceedings on the basis of the Penal Code article dealing with breach of public procurement rules conviction for which carries a jail sentence of up to one year.

Free nights in Estonia

Clients can stay for three nights for the price of two at Pädaste Manor, Estonia.

The package is valid until 23 December, and also includes an upgrade to a Superior Junior suite with a wood-burning fire in the Manor House.
The hotel opened following renovations in June, with a bar, the Alexander restaurant and a spa.

Visit : www.padaste.ee

Balts feel squeeze from global crisis, fear worse !

By Jorgen Johansson

RIGA – When Latvia's economy was on fire, it was no problem for Edgars Kazeks to borrow money to furnish his house with the kind of western goods that had been scarce in this ex-communist country just a decade ago.

But in Latvia and its Baltic Sea neighbours Estonia and Lithuania the credit boom is over. The once red-hot economies have fizzled out, raising fears among economists that the region could follow Iceland into a debt-laden economic meltdown.

The downturn has cost people like Kazeks his job and, combined with the global credit crunch, it has also caused the foreign banks that once provided the credit to pull back, which could destabilise the economy.

“Employers are laying people off to save money so it gets harder and harder to find a job that pays a normal salary,” said Kazeks, 24, who lost his job in the booming construction industry and is now a security guard.

“The money was good so I bought a TV and a computer and some more things on credit, but now I have problems keeping up with the payments because I earn a lot less.”

Credit agency Fitch downgraded its ratings for Estonia, Latvia and Lithuania at the start of the month, citing their big external deficits, the deep slowdown in their economies, and the unclear prospects of the foreign banks that have fuelled growth.

Latvia and Estonia, among Eastern Europe's success stories since their split from the Soviet Union two decades ago, have slipped into recession after growing in double digits in 2006. Lithuania grew 5 percent in the second quarter but is also expected to contract.

Estonia working hard to reduce child exploitation, UN human rights expert finds

Estonia is taking clear steps to protect its children from prostitution, pornography and exploitation, but its young people remain at risk and continued vigilance from authorities is needed, an independent United Nations human rights expert warned today after visiting the Baltic country.

Najat M’jid Maalla, the Special Rapporteur on the sale of children, child prostitution and child pornography, said she was heartened to see first-hand Estonia’s efforts – in legislation, education and prevention programmes, law enforcement, and social and health-care support – to reduce the exploitation of children.

During a five-day visit that concluded today, Ms. Maalla met with senior Government officials and staff at UN agencies and toured 11 centres and organizations involved in child protection.

She welcomed statistics that showed extremely low numbers of cases of child prostitution or child pornography in recent years, and no cases of the sale of children.

Ms. Maalla also noted that Estonia has moved to harmonize its laws with international conventions protecting children and prohibiting human trafficking, and has also taken practical steps, especially in its justice system, to benefit children.

Estonian children now receive greater protection during testimony, information campaigns have been held to promote children’s rights and counselling has been introduced for at-risk children on issues such as HIV/AIDS, drug addiction, abuse and violence.

Belarus taps IMF for bail-out -- Another black mark for emerging markets

Mark Scott

Another day, another bail-out. No, I’m not talking about more funds for the global financial industry, but news on Oct. 23 that Eastern European country Belarus has asked the International Monetary Fund (IMF) for a reported $2 billion loan to prop up the country’s dwindling capital reserves. The former Soviet satellite already has secured $2 billion in financing from Russia and the country’s finance minister, Alexei Kudrin, says he might ask Western states for additional help.

Belarus is only the latest in a string of Central and Eastern European countries that have tapped international lending institutions after the freezing of global capital markets made it difficult to service foreign debt. Hungary, Serbia, and the Ukraine — as well as cash-strapped Iceland — all have gone begging for help in recent days. It’s just an example of how emerging markets worldwide also are feeling the pinch from the global financial crisis.

Ahead of a three-day summit on Europe and Central Asia at the end of October, the World Economic Forum also has weighed into the debate. Its key concerns for the region ? "Current account deficits and high levels of external debt raise the risks of a hard [economic] landing. High dependence on foreign capital amplifies external vulnerability."

Estonia produced 5.4 million cubic metres of timber in 2006

Estonia produced 5.4 million cubic metres of timber in 2006, new figures show, according to KMS Baltics.

In news which might be of interest to those considering timber investment in the country, data released by Eurostat also reveals that the nation has 2.4 million hectares of woodland, reports Baltic Course.

The figures also reveal that other Baltic counties are producing large amounts of timber, with Latvia generating 12.8 million cubic metres over the same period, a feat which makes it the tenth largest manufacturer in the EU.

More than half of both Estonia and Latvia is covered with woodland (56% and 51% respectively), compared to 42% for the European Union as a whole.

Recently, Toomas Hendrik Ilves, president of Estonia, stated that the country is looking to invest in its citizens to help it achieve its economic goals.

He told the Western Mail that in a small country "every mind counts".

Young Estonian became a drug mule for a large SMS loan

Toomas Hõbemägi

The police and customs arrested an Estonian who arrived to Tallinn Airport with 700 grams of pure cocaine in his stomach.

Eesti Päevaleht writes that the 20-year-old Estonian by the name of Veiko was carrying 58 capsules with pure cocaine in his stomach.

Veiko told the authorities that he agreed to become a drug mule because he owed 100,000 kroons for an SMS loan.

Although he was told to transport cocaine from Gambia to London, Veiko decided to fly to Tallinn instead, hoping that he can disapper and sell the cocaine himself.

According to the police, the cocaine that Veiko was carrying cost 2.5 million kroons in street value.

Veiko said that drug smugglers promised to pay him 40,000 kroons.

For such a crime, Veiko can go to jail for up to ten years.

According to the central criminal police, Veiko is fourth drug mule seized by the police who brought drugs into Estonia in stomach. One Estonian is also serving time in Ecuador after she was found to be carrying 5 kilograms of cocaine in her stomach. Another Estonian drug mule was arrested in Peru with 2 kilos of cocaine in his stomach.

Copterline to serve Finns working in Narva

Finnish helicopter taxi company Copterline is starting charter flights between Narva Jõesuu in Northeast Estonia and Helsinki.

Eesti Päevaleht writes that, in addition, the company plans to start making charter flights from Finland to Niitvälja golf course near Tallinn and Ammende Villa in Pärnu.”

The service is targeted at Finns who work in Narva and would taken them to Finland late on Friday and bring back by late Sunday.

Tõnis Lepp, CEO of Copterline Estonia, said that the helicopter that can be used on the line would be Agusta Westland AW129 which takes 12 passengers on board.

Estonia cbank sees '08, '09 GDP drops, deficit rise

Reuters

TALLINN - Estonia's economy will shrink this year and next before returning to growth in 2010, the central bank said on Wednesday in new economic forecasts.

In the forecasts, updated from April, the bank stuck to its outlook that inflation would drop to near the Maastricht Treaty level for the adoption of the euro by the end of 2010.

But it also saw the budget deficit rising and said the government had to be ready to take steps to make sure it did not exceed the Maastricht level and endanger the euro goal.

"So far the economic correction has been more abrupt than expected primarily due to decreasing domestic demand," the bank said in its new forecasts.

It forecast a gross domestic product (GDP) drop this year of 1.8 percent and of 2.1 percent in 2009. Growth would resume the year after at 3 percent, it said. Its previous forecast was for GDP rises of 2 percent, 3 percent and 5 percent respectively.

Inflation would come in at 10.7 percent this year, easing to 4.8 percent in 2009 and 2.8 percent in 2010. It saw the budget gap at 1.4 percent of GDP this year, rising to 2.5 percent in 2009, before easing to 1.3 percent in 2010.

Estonia in recession until 2010, says central bank

The Estonian economy is set to remain in recession until 2010 according to a forecast published Wednesday by the Estonian central bank, Eesti Pank. According to the base scenario of Eesti Pank's 2008 autumn forecast, Estonia's gross domestic product will decline by 1.8 per cent in 2008 and by 2.1 per cent in 2009.

The economy should pick up again either at the end of 2009 or at the beginning of 2010, resulting in an average economic growth rate for 2010 of 3 per cent, Eesti Pank believes.

"Private consumption growth should recover in 2010 along with the revival of household confidence, whereas 2009 will be characterised by slowing wage growth and increasing unemployment," the forecast said.

"We expect growth in Estonia's main export markets will not die down totally and the mutual distrust in the global financial markets will pass," it added, before warning that if its expectations do not come true, Estonia should be ready for an even longer downturn.

By the end of 2010, inflation could have dropped sufficiently to meet the Maastricht criteria that would qualify Estonia to adopt the euro as its currency in place of the kroon, Eesti Pank believes.

Martin Hendre, head of private banking with Tallinn-based GILD Bankers, told Deutsche Presse-Agentur

Tallinna Vesi boost its profits by 12.5 million kroons in 3rd quarter 2008

Juhan Tere

AS Tallinna Vesi reported on Wednesday that it increased its profits to 89.2 million kroons in the third quarter of 2008, writes EPL Online.

This was by 12.5 million kroons more than during the same period of time last year.

The income grew by a third and reached 225.3 million kroons.

From its main area of business – from sales of water and provision of sewage services to mostly individuals and legal entities and from the fee of maintaining systems of collecting rainwater from the City of Tallinn, the enterprise earned a total of 174 million kroons.

The sales volumes of the company have fallen by nearly 3%, but due to the higher tariffs by nearly 11% that were implemented in January, the company’s revenue from sales of water and sewage services increased by nearly 10%, amounting to 159.4 million kroons.

Baltic markets back on the slide

Riga - The three Baltic stock exchanges weakened Wednesday, resulting in drops across the board at the close of trading.

The NASDAQ OMX Tallinn exchange closed down 3.29 per cent, Vilnius was down 3.36 per cent and the smallest of the exchanges in Riga dipped 0.05 per cent.

The Baltic Benchmark Index (BBI) which includes data from all three exchanges, closed down 3.40 per cent, at 311.25.

Biggest losers of the day were Estonian cable communications company Starman, down 15.15 per cent, closely followed by Lithuanian alcoholic drinks manufacturer Vilniaus Degtine, down 15 per cent.