BONJOUR L'ESTONIE

Estonian wood exports fall

Estonia exported 712 million kroons worth of wood and related products during May, official figures show.

Data released by Statistics Estonia revealed a sharp drop in the value of exports in the field, with the year-on-year comparison being 30 per cent down on 2008.

However, the wood sector fared slightly better than the overall value of exports which dropped by 31 per cent.

Metal and related products saw the greatest fall in export levels, down by 59 per cent when compared to the same period last year.

Imports were all down sharply, standing at 8.493 billion kroons, a drop of 41 per cent compared to May 2008.

Last week, it was revealed that Estonia's State Forest Management Centre generated 524 million kroons in sales revenue during the first six months of 2009.

Figures released to the LETA news agency also revealed that the centre made net profits of 18 million kroons over the same period, the Baltic Course reported.

Estonia central bank says more budget cuts needed

TALLINN - The Estonian central bank said on Wednesday the government will need to trim its 2009 budget deficit further to meet the criteria for joining the euro zone.

The Estonian government has made January 1, 2011 its target date for joining the euro zone and has already cut its 2009 budget by 16 billion kroons ($1.45 bln) to keep its deficit under control as the economy contracts sharply during a deep recession.

Based on the bank of Estonia's spring economic forecast and measures taken by the end of July, the 2009 budget deficit will be close to 4 pct of GDP,' the Estonian central bank said in its annual report on the country's euro adoption preparations.

'Based on this the Bank of Estonia considers that further steps are needed to lower the budget deficit,' the bank added.

After parliament passed the last round of cuts to the budget in June, the central bank said the government would need to trim a further 1.5 billion kroons.

The deficit ceiling for euro zone membership is 3 pct of GDP.

The bank said the country will meet the inflation criteria in autumn this year and the key question is whether the government can manage the state finances. Estonia signed an agreement to join the euro zone as soon as possible as part of its agreement to join the European Union in 2004.

It had initially hoped to join the euro zone in 2007, but an economic boom and high energy prices kept the Baltic country's inflation higher than permitted under Maastricht rules.

Estonia operates a currency board with the kroon pegged to the euro. Its exit strategy from the arrangement is by membership of the euro zone.

Reporting by David Mardiste ; Editing by Victoria Main

Lawyers’ millions not taxed by a social tax

Estonian top lawyers earn most of their income as dividends and pay social tax only on 10-20 pct of income, Äripäev reports.

The paper reviewed the incomes of management of bigger law firms (turnover more than EEK 5 mln, 31 bureaus). Their annual reports show that holders pay themselves wages as small as possible.

49 members of Estonian bigger law firms, who all also are holders, paid themselves an average of EEK 154,143 a month (net amount) as dividends, at the same time their average monthly salary was EEK 15,911 a month (gross), which slightly exceeds the average salary.

Law firms management earns less than the average gross salary – EEK 28,460. The management board’s salaries are also so low because about one half of bigger bureaus didn’t pay them at all.

There’s nothing illegal in taking dividends, but the question is whether it is salary. Tax and Customs Board (MTA), bigger law and auditor companies currently are discussing the question.

MTA may take dividends as tax evasion if there’s enough proof, according to the ruling by the Circuit Court in the spring.

“I don’t see it as a problem, when the company is earning profit and holders divide it. I don’t know such business model where profit is taken out only as dividends,” Aivar Pilv, the chairperson of the advocacy said. He gets EEK 440,627 a month as dividends and gross salary of EEK 51,667.

Leon Glikman, partner at Glikman & Partners said that holders get enough income, which is taxed by social tax, from the law firm and other sources. He earned EEK 222,908 a month as dividends and EEK 0 for being in the management.

Glikman’s law firm paid 38 pct of turnover or more than EEK 12 mln as taxes. Glikman said that, considering world practices, it’s unreasonably much.

Where is the justice ? And Estonia is looking for cash to make both ends meet ... !

Metsatoll begins recording new album

by zMETALlica

Estonian metal band, Metsatoll, has issued the following update:

"Last week, Metsatöll finished recording the demo version of their 4th album, which was begun earlier, in March. In mid-June, the entire studio was moved from Tallinn to a South-Estonian village of Hargla, where the songs received finishing touches. According to the guys themselves, leaving Tallinn behind meant a complete recovery of creativity, which can never be achieved in a big city."

"Today, the band begins recording their 4th album in the Finnvox studio in Finland. The album is recorded and mixed by perhaps the most legendary Finnish producer Mikko Karmila. Over the years, he has provided his services to such bands as Nightwish, Children of Bodom, Stratovarius, Stone, Peer Günt, Kotiteollisuus, Amorphis, Waltari, Tarot, Timo Kotipelto, Timo Tolkki, Popeda, Sonata Arctica, etc. The album will be all about finished by early December, and will be released to the global distribution networks on 6 March, 2010."

Everton set for Champions League

By Tony Leighton

Everton will be the first English team to savour Women's Champions League football when they face Croatian side Osijek on Thursday.

The newly created Champions League has replaced the Uefa Cup, which Arsenal won in 2006.
Last season Everton were Premier League runners-up to the Gunners, who have a bye into the knock-out stages.
The Toffees must come through a four-team mini-tournament, being played in Croatia, to reach the round of 32.
After meeting the host side, Mo Marley's team will face Estonian outfit Tallinn on Saturday and Strommen, of Norway, next Tuesday.

And though the Norwegians in particular will prove tough opponents, manager Marley is predicting a successful outcome.

"We're really excited about playing Champions League football," said Marley. "And we're definitely in the right frame of mind for this tournament.
"We are going into it full of confidence, and if we hit our peak it will take a very good side to beat us."
Most of Everton's players were in action for England last week, either for Hope Powell's senior team or the Under-19's - also coached by Marley.
The four young Toffees in Marley's national squad emerged triumphant from the European Under-19 Championships, as England won the title for the first time.

Meanwhile , eight Everton players were in the senior squad that beat Denmark 1-0 in their last match before next month's European Championship finals.

If you want to work abroad, first find a reliable employment agency

By Ella Karapetyan

TALLINN - In today’s global economic crisis, many people in Estonia are starting to think of looking abroad for better life conditions. People go to search agencies to help them find a job in another country.
However, many people have the fear of being cheated by the employment agency while taking on their services. There are some agencies which remain honest and can still be trusted.

According to head of J.T. Agentuur, Ekaterina Taranenko, an employment agency in Tallinn working since 2001, the agency hasn’t been involved in any negative incidents so far; moreover, the agency has retained many permanent clients. “Our aim is to help people, especially in these difficult times when we are facing global economic crisis,” said Taranenko to The Baltic Times.
“Our motto is ‘You work - We care’ and this is really true of us, we really try to take care of our clients and to keep our reputation on a high level, which we have earned during the long years of our work,” she says.

According to her, the advantage of using an employment agency is that they work with all the customers individually, taking into consideration each person’s own needs and requests. “From my side, I would like to encourage people not to lose their hope and try to find really honest agencies, those who will take responsibility for them, and their safety, as much as possible,” she adds.
However, Taranenko goes on to give some practical and universal advice, which is important to know in order not to be cheated by any of the illegal agencies.

“First of all, it is important to check if the agency is registered. The next step to take is to ask for a contract, right on the spot, when you are already offered a job. And it is always good to check the detailed information about the employing company, on the Internet, and to leave your contact information of the employing company with your relatives, or with close friends in case of trouble.

Two anti-fascists detained in Estonia

TALLINN - Two men detained at an anti-fascist demonstration were ousted from Estonia. Says the Estonian Border Guard, the two men were forbidden to enter Estonia and were there illegally.  

Both men were returned to Latvia via the Valga/Valka border crossing. '

'The individuals were taken to the border crossing point and their departure from the Republic of Estonia was guaranteed,'' said Kaisa Pungas, the press representative for the Estonian Border Guard.

One of the deported persons was a citizen of Latvia, the other man a stateless person living in Latvia.

On July 26, the Estonian police detained five persons at Sinimaed in Ida-Viru County who demonstrated, dressed as prisoners, against the convention of veterans of the Estonian weaponry grenadiers division. The men are accused of disturbing public order and misdemeanor proceedings are under way. One of the demonstrators was the leader of the ''Night Watch'' movement Maksim Reva.

Europe's leader in internet usage is great for international business

A survey carried out by the leading market research company, GfK, proved once again Estonia's advanced level in information technology. According to the survey conducted in May, Estonia is the largest per capita user of the Internet among Middle and Eastern European countries. The internationally active Estonian entrepreneur and owner of KC Grupp, Margus Reinsalu, sees this as one more indicator of the favourable international business climate in Estonia.

Tallinn (PRWEB) July 30, 2009 - GfK's- research indicates that 70% of the residents of Estonia use the Internet regularly, which is the highest result among the 17 Middle and Eastern European countries. These results may explain the country's thriving place as an international business hub.

Second place is held by Slovenia with 68%. After Slovenia comes Latvia, Lithuania and Austria with 55 to 60%. In last place on the list is Ukraine, where only 20% of the population uses the Internet regularly. Exactly 1000 people from every country took part in the survey.

Margus Reinsalu, an international business figure based in Estonia, believes that Estonia's high info-technological level considerably facilitates doing business there. To view videos depicting the many enticing advantages available in the country, view the following clip: http://www.youtube.com/watch?v=6quBh6DedpE&feature=related

Most Estonia's milk producers work at loss

Juhan Tere

Some Estonia's dairies plan to lower the milk purchase price in times when milk producers can't pay their leasing installments and owe money to partners, Sirje Niitra writes in Postimees, as LETA reports.

Mart Lees has 180 cows, he sells the production to Maag dairy. Maag announced the intention to pay 20 cents less per milk litre to the farmer from August, which would mean 20,000 kroons a month in Lees´s income.

"We all work with loss, the situation is terribly bad," Lees said.

He has to pay leases for 120,000 kroons a month. The bank gave grace period for half of it until the end of year. Today Lees expects a meeting with representatives of Maag to discuss the price question.

Valdis Noppel, the CEO of Maag dairy, said the situation on the market forces to lower milk purchase price: "We're suppliers, and we have customers who dictate the price. We don't reduce the price voluntarily, we're over a barrel to keep factories running and offer work to people," Noppel said.

CEO of the company highlighted that dairies are well aware that the first-level producers are in even worse situation, which is why the milk purchase price has been increased when possible.

Profits of the Port of Tallinn increased by 9% in H1

Juhan Tere

According to preliminary reports, the net profits earned by AS Tallinna Sadam (the Port of Tallinn) in the first half of the year 2009 amounted to 276 million kroons, writes Postimees Online/LETA. This is by 9% more than during the same period of time last year.

Sales revenue generated by the Port of Tallinn grew by 7% or by 42 million kroons to 657 million kroons in the first six months of the year.

During the first half of the year, the port’s cargo volume grew by 0.6 million tonnes or by nearly 4% to 15.4 million tonnes. Hence the Port of Tallinn was one of the few ports on the eastern coast of the Baltic Sea that increased the cargo volume in the first half of 2009 while the total cargo volume of rivalling ports fell by 8%.

The Port of Tallinn also returned to the third place among the region’s ports in terms of cargo volume.

The Port of Tallinn decreased spending on labour force by 6% in the year-on-year comparison.

The number of passengers remained at the record high level achieved last year, despite the deteriorating economic environment. During the first half of 2009, the Port of Tallinn’s ports were used by a total of 3.4 million passengers – by 1% more than last year. The number of cruise passengers grew as well, by 18%.

Estonia to turn hundreds of hectares land into an industrial zone

State will turn hundreds of hectares land in Ida-Virumaa into an industrial zone, in hope to get investments for amount of EEK 12 bln and establish 4000 new jobs in 10 year, Lauri Linnamäe writes in Postimees.

According to the draft the state and local municipalities will give 900 hectares of land, which doesn’t have a detail plan, to a fund which will be established.

“Many big companies from Germany and Sweden, for instance, haven’t come to that area, since the state has plenty of unused, unreformed land. Local municipalities have been forced to turn them down since there’s no reformed land which would have a detail plan,” Regina Raukas, executive officer from Economic Policy division at the Ministry of Economic Affairs and Communications said.

Planning and establishing necessary infrastructure would cost EEK 200 mln of which most should come from EU funds.

The incomes of three already existing industrial parks and EEK 2 mln by four local municipalities should be own financing and cover initial operating costs.

Narva, Jõhvi, Kohtla-Järve and Kiviõli will join that fund to be established, cooperation agreements will be signed with Sillamäe and Püssi. Jõhvi Tööstuspark (industrial estate), Narva Tööstuspark and Püssi Tööstusala Arendus (development of industrial area).

The state and local municipalities hope to bring in logistics and transportation companies, which would get suitable employees and transportation.

“It’s hard to tell, how the investment curve will change, but we’re in the fog for the near future. Industrial park is an endeavour with long horizon. Ida-Virumaa has potential and investor needs completed environment,” Juhan Parts, the Minister of Economic Affairs and Communications said.

Eesti Energia to lower electricity price by 6.4% from August

Juhan Tere

From August 1, 2009, the price of electricity sold by Eesti Energia will fall by approximately 6.4%, writes EPL Online/LETA.

This means that an average electricity bill with network fees will lower by nearly 3.6%.

The average price of electricity sold by Eesti Energia that was thus far 50.79 cents per KWh will now fall to 47.54 cents per KWh.

“The electricity bill of an average household will fall by 12 kroons from August this year – to 313 kroons instead of 325 kroons,” said Margus Rink, a member of the management board of the enterprise.

The fall in the price of electricity is caused by the fact that after the necessary investments were made, the landfill of the Narva Power Plants for storing ashes is in compliance with environmental norms and the tariffs that are by 5 times higher than the norm will no longer be applied on storing oil shale ashes. This in turn will cause the environmental fees to fall by nearly 300 million kroons, making it possible to lower the prices of electricity.

Eesti Energia reported that another reason for the falling prices is the decline in the price of shale oil used for producing electricity, due to the falling global market prices of fuel oil.

The new support for the promotion of the entrepreneurship outside Harjumaa and Tartumaa was opened yesterday

On 29 July, Enterprise Estonia opened the programme from where the support can be applied for the development of competence centres outside Harjumaa and Tartumaa.

Through the competence centres to be created in cooperation with the business, education and local public sector the top-level knowhow can be taken to the districts to promote the existing environment and develop the physical environment needed for that purpose.

"The programmes with similar objectives have for several years have helped to increase the mutual benefit of business, research and education in Tallinn and Tartu. Now the regional colleges of the universities, entrepreneurs and all other promoters of the regions can assemble their forces with the help of the support and find mutually beneficial future solutions," Monica Hankov, the Director of the Business Environment Division of Enterprise Estonia, said.

The support prepared in cooperation with the Minister of Internal Affairs and Enterprise Estonia was created upon the sample of the Nordic countries, where by developing the local preconditions - human and natural resources, infrastructure and knowhow- integrally the outstanding results have been achieved in the social and economic development of the regions.

In the first stage of the support the conceptual designs of the competence centres planned by the end of October this year are expected. The designs can be submitted by the vocational schools and institutions of applied higher education, also research and development institutions, business organisations, foundations and non-profit organisations. The conceptual designs are received and processed by Enterprise Estonia.

*** TIIU ***

Part of a very artsy spread ..

Tallinna Vesi to lower tarriffs

Juhan Tere

Tallinn water management company Tallinna Vesi concluded on July 28 negotiations with the City of Tallinn regarding the decrease of price of services, rendered by Tallinna Vesi, Tallinna Vesi reported to the Stock Exchange.

To reflect the fall in construction prices and in the spirit of cooperation, the parties have agreed a new compensation schedule that will reduce the amount to be paid and the length of the payment period by three and a half years, informs LETA.

In addition, the parties have agreed to amend some Levels of service to make them consistent with changes in law made since the contract was signed.

Eesti Energia may not get Tallinna’s waste

Although Eesti Energia wants to get Tallinna’s waste to its Iru incinerator plant, it may not get it due to the city’s contract with Tallinna Prügila, Eesti Päevaleht reports.

The city of Tallinn and Tallinna Prügila (dumping ground – edit) signed a contract in 2000, agreeing that the city will take its waste there for the next 60 years. The city may direct waste elsewhere only if there’s another new dumping ground in the area. If the city breaks the contract then Prügila may terminate it and claim compensation of EEK 100 mln.

“It’s currently too soon to sell how that situation will be solved. Lawyers and specialists are analyzing the question,” Deniss Boroditš, the vice Mayor of Tallinn said.

Ando Leppiman, the head of Eesti Energia’s renewable energy company said that if Eesti Energia should have problems with getting the waste, then the energy company may pay compensation to Tallinna Prügila.

Estonia and Sweden in the same boat : devalue now!

Dag Kirsebom

Year 1992 was a watershed both for Estonia and Sweden regarding respective country’s currency policy. At the same time as Sweden let its currency krona float freely Estonia reintroduced its currency kroon and pegged it to what was perhaps the most stable currency in the world, the Deutsch Mark, Dag Kirsebom, the co-author of "Hard Landing - The fairy tale of the rise and fall of the Estonian economy” writes.

In a historical perspective year 1992 is the start of a successful currency policy in both Estonia and Sweden, although with completely opposite prerequisites. Now in the year 2009 the time has come for Estonia to close the circle.

Jacob Palmstierna is perhaps the most well known banking guru in Sweden. He was CEO of SEB during the loan bubble in Sweden in the 1980s and Chairman of the Board of Nordea during the restructuring of the banking sector in the 1990s. Mr Palmstierna has recently published his memoirs; Jacobs Stege (Jacob’s Ladder). In his book Mr Palmstierna uses the term “treason” to describe the atmosphere in Sweden towards people like the right-wing politician Ian Wachtmeister who questioned the peg prior to the free floating of the krona in November 1992. This again is of course very similar to Estonia today and the aggressive and very emotional response you encounter if you dare to question the peg of the kroon.

Another person very much involved during both the bubble and the crash was Bengt Dennis, the Governor of the Swedish Central Bank from 1982 until 1993. In history books Mr Dennis is most famously known for raising the overnight interest rate to 500% in a desperate attempt to defend the Swedish peg in September 1992. It is estimated that the failed attempt to defend the peg cost Sweden 500 billion SEK. Today Mr Dennis is a consultant to the Latvian government, whom he has strongly advised to devalue the LAT. You don’t have to be Freud to see this as a late admission from Mr Dennis’ side that it was a mistake to defend the Swedish peg so strongly in the autumn of 1992. Some people now ridicule Mr Dennis for his advice to the Latvian government calling him “Mr 500%”. But I see this the other way, someone who is ready to learn from his mistakes should be credited for that and rather have higher credibility. Again compare to the Swedish commercial banks who not only didn’t learn from their mistakes in Sweden in the 1980s but more or less managed to “copy and paste”  their mistakes in Estonia 15-20 years later.

SEB: Estonia as well as other countries will have to focus on saving money

Juhan Tere

Estonia as well as other developed might face a long and difficult period where the focus will be on saving money instead of spending, stated SEB Estonia’s private banking strategy Peeter Koppel, writes the National Broadcasting/LETA.

Koppel commented that in the second half of the year, developed countries might reach a positive economic growth, but this is mostly caused by the measures adopted by the Governments and central banks that have thus far pumped unprecedented amounts of money into the system.

“These measures are certainly nothing that sustainable growth could be based on. Essentially this means that for a certain period of time, countries buy themselves out of something rather unpleasant. It is a big question, what will happen afterwards,” he said.

Koppel added that the main problem for developed countries is the gigantic debt burden. Several countries have developed big budgetary deficits that are covered with loans. Individuals’ loan burden is significant as well. “This means that now we might be facing a longer period of time where we can speak about serious saving activities and the decrease of amplification in the system, which begs the question that if people constantly save money, what could be the basis for growth,” noted the analyst.

Brazil to meet Estonia with Confed Cup champs

By Tales Azzoni

Most of the Brazil players who won the Confederations Cup will play a friendly against Estonia in Tallinn next month.

Brazil plays Estonia on Aug. 12 in the team's last match before a World Cup qualifier against South American rival Argentina.

Only three Confederations Cup champions were left out _ AC Milan striker Alexandre Pato, Internacional left back Kleber and Gremio goalkeeper Victor.

Dunga added Real Madrid defender Marcelo and young Atletico Mineiro forward Diego Tardelli. A third goalkeeper was not summoned to replace Victor.

Brazil won all five matches it played at the Confederations Cup in South Africa in June, clinching the title with a come-from-behind 3-2 win over the United States in the final.

Again, not in Dunga's 22-man squad were AC Milan's Ronaldinho, Flamengo's Adriano and Corinthians' Ronaldo, who was regaining his form until he broke his hand in a Brazilian league match over the weekend.

Dunga said Ronaldinho remains in his plans if the playmaker plays well with Milan in the upcoming season.

Russia acts against 'false' history

What is worrying Russia? Why is the country convinced that it is the victim of a campaign to make it look bad?

President Dmitry Medvedev recently announced the setting up of a commission to counter the falsification of history. He said this was becoming increasingly "severe, evil, and aggressive".

"This is absolute poppycock," says Robert Service, professor of Russian History at Oxford University. "History is all about argument. There is no absolute historical truth about anything big in history."

Mr Service dismisses the Russian leader's suggestion that his country is facing some kind of academic aggression.

Instead, he sees a desire to dominate, worthy of the most repressive totalitarian regimes of fiction.

"President Medvedev, following in the path of his predecessor President [Vladimir] Putin, wants to control history," he says.

"And he wants to control history as a means of controlling the present. This is the classic George Orwell scenario."

'Hysterical reaction'

Many Russians, though, agree with their president.

Natalia Narochnitskaya, a former deputy in the Russian parliament and now a member of the new Historical Truth Commission, says that she is surprised by what she terms the "almost hysterical reaction" in the West.

"In the Western media especially, there is a certain prejudice against Russia and Russian history," she says.

"They always feel that Russia since, you know, Ivan the Terrible, is a certain country which is off the European civilisation."