BONJOUR L'ESTONIE

Retail sales still on the decline in March

According to Statistics Estonia, in March 2010 compared to March of the previous year the retail sales of goods of retail trade enterprises decreased 9% at constant prices. Since the beginning of the year the decrease in retail sales has been relatively stable compared to the same month of the previous year.

In January the retail sales of goods decreased 11% and in February 10% compared to the same month a year ago. In March, the retail sales of goods of retail trade enterprises were 4.3 billion kroons. Compared to March 2009, the retail sales of goods increased in three economic activities: the retail sales of food, beverages and tobacco in specialized stores (44%), the retail sales of second-hand goods in stores (11%) and in stores selling pharmaceutical goods and cosmetics (5%).

The very low reference base in 2009 contributed to the sales growth of the retail sales of foods, beverages and tobacco in specialized stores. The sales increase in these stores does not significantly influence the retail sales of goods of retail trade enterprises, because the share of this economic activity is very small, 2% in March 2010. The decrease in retail sales of goods was most influenced by the stores selling manufactured goods, where the retail sales decreased by 15% compared to March 2009.

Lithuania is the weakest Baltic banking market

The Lithuanian banking market is the Baltic nations’ weakest and “still bleeds quite badly,” said Erkki Raasuke, Swedbank AB’s chief financial officer. Bloomber quoted Raasuke saying at a conference in Tallinn on Thursday that Estonia’s market was recovering, while Latvia has bottomed out.

Swedbank, the Baltic countries’ biggest lender, reported this week its first quarterly profit in more than a year and said earnings are likely to improve as Baltic loan impairments decline. The bank said two days ago that it’s likely to return to profit in Estonia first.

“Lithuania’s market still bleeds quite badly today, mainly the retail market that is tied to the high unemployment,” Raasuke said. “Loans overdue for more than 60 days are still growing in Lithuania, while they have reached a bottom in Estonia and Latvia.”

Loans overdue for more than 60 days rose to 1.64 billion litai ($630 million), or 10.1 percent of total credit, by the end of the first quarter, from 1.58 billion litai in the previous quarter, Swedbank’s Lithuanian unit said on its Web site on April 27.

Lithuanian bank losses in the first quarter increased more than 11-fold from a year earlier, to 232 million litai, the country’s central bank said this week. Eight of Lithuania’s 17 banks reported losses.

Problem loans for banks operating in the Baltic countries, led by Swedbank, SEB and Nordea Bank, will continue to grow in the coming quarters, Moody’s Investors Service said on April 26.

Toomas Hõbemägi

Joel Lindpere to play at RFK Stadium on Saturday, May 1

The New York Red Bulls, led by their star Estonian playmaker Joel Lindpere, will play a match this Saturday against D.C. United at RFK Stadium. The match is scheduled to begin at 4 PM.
He is a truly gifted player, and is one of the main reasons why New York is leading the Eastern Conference of Major League Soccer.
Additional information about the match can be found on either the Red Bulls’ or DC United’s websites:

www.dcunited.com
www.newyorkredbulls.com

Here is Lindpere’s webpage on Major League Soccer’s website: http://www.majorleaguesoccer.com/player/joel-lindpere

As you may know, he has recorded two “firsts” this year for New York:
1. Scored the inaugural goal in the grand opening of Red Bull Arena (in friendly against Santos of Brazil);
2. Scored the first MLS goal ever recorded at Red Bull Arena (against Chicago). Here is a recap of that match and a description of his great play: http://www.mlssoccer.com/content/recap-lindperes-goal-thrills-rba

I thought your readers would want to be reminded that one of Estonia’s stars is coming to town.

Don Mooers

Estonian PM keen on euro, taxi driver not

For any journalist on a flying trip to a foreign capital, it is always tempting to use taxi drivers as a gauge of public opinion. Why bother seeking out ordinary people in between meetings with the great and good when the cabbie will often deliver the ideal quote? It is a dubious journalistic practice but worked well for me during a visit to Tallinn, Estonia, today.

I was on my way to an interview with prime minister Andrus Ansip on Estonia’s plans to join the euro next January. My taxi driver, Allan Alajaan, was only too happy to act as “voice of the people”.

“They speak to us just like they did under Communism,” he told me, referring to the Estonian political elite, who have pursued euro entry with almost evangelical zeal. “Back then, they said ‘make sacrifices now and everything will be wonderful when the harvest comes’. Now, they say the same things about joining the euro.”

He was referring to the tough fiscal measures taken to keep the budget deficit below 3 per cent of gross domestic product — the limit for euro entrants — even as the country went through a wrenching recession.

Estonia’s strong public finances helped it weather the crisis better than neighbouring Latvia, which was forced to turn to the International Monetary Fund for a €7.5bn bail out. But only in the troubled Baltic region could Estonia’s 15 per cent economic contraction last year look relatively good.

Ansip : state may invest up to 400 million in Estonian Air

Estonian prime minister Andrus Ansip said today that the state would have to invest between 200 million and 400 million kroons in Estonian Air depending on the business plan, writes aripeev.ee.

Ansip said that the airline's capital need would depend on the choice of the business plan. "Maximum amount would include the use of Bombardier aircraft, but these decisions will be up to the general meeting of shareholders. Estonian government as a minority holder cannot make these decisions for other shareholders," he said.

Under the agreement, Estonian state would acquire 66% of Estonian Air and the holding of SAS would reduce to 34%. At present SAS owns 49% of the national airline, Estonian state owns 34% and investment bank Cresco owns 17%.

Speaking at a government press conference today, Ansip did not confirm that the preliminary contract on the transfer of holding would be signed by the end of this week as reported in the media before.

Toomas Hõbemägi

Court orders Eesti Energia to pay private energy company 3.1 million

Viru county court has ruled in favour of Baltic Energy Partners, an energy company owned by businessman Urmas Sõõrumaa, and ordered state power company Eesti Energia to pay the company 3.1 million kroons in damages. The court found that Eesti Energia had breached its contract when it refused to sell electricity to BEP back in 2008, forcing the private company to supply its customers with electricity procured at a much higher tariffs from elsewhere, writes aripaev.ee.

Tõnu Aas, CEO of Narva Power Stations that belong to Eesti Energia, refused to comment the court ruling in detail and said that the company was likely to appeal against the ruling.

Priit Mikelsaar, board member of BEP, said that the first-instance court ruling showed that fair and transparent approach to market operators was a standard also in the energy sector.

Eesti Energia that is a virtual monopoly on the market explained that BEP was becoming to greedy and therefore Eesti Energia decided to stop selling electricity to BEP. Eesti Energia claims that Narva Power Stations stopped wished to stop the practice where BEP was purchasing cheap electricity from the internal market and re-sold it at a profit at the expense of Estonian power consumers.

Travelers allowed to declare goods verbally in Estonia

Travelers in Estonia are permitted to declare their goods verbally starting from May 1, 2010, pursuant to subsection 3 (2) of the Regulation No 20 of the Minister of Finance of March 17, 2010 "Procedure of traveler's customs formalities, traveller's declaration form and instruction for completing thereof", Estonian Tax and Customs board reported.

However, the customs authorities have the right to request the travelers to lodge a written customs declaration, if the information declared orally needs further specification. There is still an opportunity for travelers to lodge either a written declaration on a paper-based carrier or complete it through the electronic information processing system Complex, informs LETA.

In order to lodge the traveler's written declaration, it is possible to get a form from the customs officials at performing the customs formalities, or through the website of the Estonian Tax and Customs Board. Traveler's declaration available on the website of ETCB may be filled in right on the screen and subsequently printed and lodged at performing the customs formalities.

Upon completing the boxes of the traveler's declaration through the electronic information processing system Complex the travelers have to proceed from the Regulation of the Minister of Finance and instructions on entering information to the electronic information processing system provided for in subsection 37 (8) of the Customs Act.

Juhan Tere

Going underground

TALLINN - Like any respectable medieval town, Tallinn has its share of underground passageways, particularly the defensive tunnel systems built in the 1600s during the time of Swedish rule. Back then, attack was a constant worry, so city planners constructed high bastion walls around the outside of the fortified city. They also installed tunnels under the base of the walls, so they could safely move soldiers and ammunition to where they were needed, not to mention spy on the enemy.

Some tunnels were forgotten. As late as 2003, workers digging a foundation near the Occupation Museum found a pentagonal system of limestone-lined tunnels dating to the end of the 17th century.
Other tunnels have always been well known, in particular the ones that run underneath Harju Hill and Linda Hill at the edge of Toompea, which are now open for tours. They were built in the 1670s, renovated into bomb shelters during World War II, and further modernized during the Soviet period to add electricity, running water, ventilation and phones. Most of the Soviet-era equipment has since been cleared out or stolen, but a couple of iron bunk-bed racks and other signs of the period remain.

The newly opened “Kiek in de Kok and Bastion Tunnels,” with its new exposition “Time travel. Tallinn 1219-2219,” offers new knowledge, great entertainment and a fresh experience. Actually, visitors have a unique chance to see some old limestone staircases and other chambers that have remained fairly untouched since the tunnels were built. The Bastion tunnels 10 meters underground will take each visitor back to the future, showing how people imagined the future would turn out in the past.

New prime minister despite euro adoption ?

One of the perks of living in Estonia is that you are far removed from the endless barrage of propaganda that is American political discourse. On the downside, the longer you stay in Estonia and, especially, the stronger your command of the local language becomes, newer, potent forms of propaganda manifest themselves in your daily life.

Consider the case of Tallinn Mayor Edgar Savisaar. He was prime minister of this country for a short period of time in the early 1990s. Ever since then he’s been running a never ending, so-far unsuccessful campaign to win back his seat in Stenbock House. Savisaar likes to lavish his voters with free firewood, potatoes, electronic greeting cards, and public advertising campaigns that border on harassment. His political demagoguery has earned him the exasperation of many an Estonian, not to mention the ridicule of his rivals. But the problem for his political opponents is that his critiques are not completely untrue.

Savisaar’s most recent attempt to woo voters is to pin the economic crisis on the ruling coalition. He’s been trying to do it for years now, with some success. His party did win the most votes during the municipal elections last October. And here’s their narrative, as put by Ain Seppik, a member of parliament and Savisaar’s right-hand man. Seppik said in a recent article that when Center was in coalition with Reform from 2005 to 2007, all was well. The economy was up, unemployment was down; Estonia was looking forward to an endless summer. Then things took a turn for the worse. Following the March 2007 elections, Reform callously dropped Center and decided to steer to the right with their new best friend and coalition partner Union of Pro Patria and Res Publica. The economy subsequently tanked, unemployment grew, there was rioting in the streets, and Estonia now faced cold, endless winters.

So Savisaar blames the ruling coalition for the high unemployment rate and the deep economic decline of the last few years. And who could argue with him? It’s true! Estonia does have high unemployment. Estonia has experienced an extreme economic slump. Of course, other countries have these phenomena too, his opponents point out. But little Estonia has the third highest unemployment rate in Europe. Gross domestic product meantime dropped 14 percent last year. The European Union on average saw a decline of 4 percent. Anyone who travels around Estonia can see that the money from the economic boom did not exactly trickle down to all. There are plenty of disgruntled have-nots in this country, and most of them can vote in parliamentary elections. So why not appeal to their interests?

Estonia celebrates Bible marathon

The Baltic State of Estonia is celebrating a national year of reading, with book festivals and readings held all across the country.

But in the town of Haapsalu in north west Estonia, one event requires particular stamina.

A public five-day reading, from beginning to end, of the world's most translated and most widely sold piece of literature.

The book in question is, of course, the Bible.

Readers wanted

Next to the baptismal font in the 800-year-old Estonian cathedral of St John, the reading has been going since Wednesday morning - but with Moses and the Israelites still in Egypt, the story has barely begun.

The Bible is made up of 66 separate books and so far readers here have only reached the second.

It'll be Sunday before the 150 local residents, who are taking turns reading the Bible out loud, get to the end.

A tenth of Estonian households are not ready for digital TV

A tenth of households in Estonia are not yet ready to adopt digital television which will replace analogue television in summer 2010, LETA/Postimees Online reports.

The head of the Estonian government committee of transition to digital broadcasting Jüri Pihel said that at the beginning of this year, there were 67,000 families in Estonia watching analogue TV, meaning that 11% of Estonian homes use just the ordinary analogue antennae to watch TV.

TNS Emor’s fresh digi-TV surveillance study indicated that in the first quarter of this year, the share of analogue TV watchers is highest in South Estonia, 16,000 homes or 23% of the region’s households.

“Since today, 64 days before the analogue TV will be switched off, transition to digital broadcasting concerns still over 11% of Estonian homes that own a TV set, long queues in electronics stores, antenna installation firms and TV services providers can be forecast for the end of June,” said Pihel.

“A lot of people who today see just the three Estonian channels with the ordinary antenna haven’t understood that they can adopt digital television already today. They don’t have to wait till July 1 when analogue transmitters will be switched off in Estonia,” said Pihel.

In the first quarter of this year, the number of households watching digital television was 228,000. 94,000 households watched digital television received by an ordinary antenna, the rest were distributed between digi-TV transmitted via cable network, IP-based TV and satellite television.

On July 1, 2010, all Estonian TV transmitters stop transmitting analogue TV and all people who watch just the three Estonian TV channels with an ordinary antenna now, have to buy a digibox or a new digital TV set.

Juhan Tere

Estonia aims for 66% stake in Estonian Air

TALLINN - The Baltic state of Estonia, which is holding talks with Scandinavian airline SAS on buying out carrier Estonian Air, wants a 66 percent stake in the airline, the Economy Ministry said on Tuesday.

The government said last week it was close to an agreement on taking a majority stake in Estonian Air to ensure air services from the small Baltic country. SAS has a 49 percent stake, but has been selling off non-core assets.

The plan is for the government to put more money into Estonian Air and it would end up with 66 percent, said Economy Ministry spokesman Rasmus Ruuda.

This is just a plan, nothing is signed yet and the government has to make a decision on any agreement that is signed, he added.

The Estonian state has a 34 percent stake in Estonian Air and private investment firm Cresco holds 17 percent.

Ruuda said a deal with SAS was expected to be signed on Thursday this week.

SAS, half-owned by Sweden, Norway and Denmark, has struggled for years with an unwieldy business structure and higher staff costs than rivals.

Reporting by David Mardiste ; Editing by David Holmes

Scientists say recession may spark Baltic TB surge

The Baltic States risk seeing an upsurge in tuberculosis (TB) cases because of the recession brought about by the financial crisis, scientists said on Wednesday, and Latvia is particularly vulnerable.

Researchers who studied the effects of recession on rates of the highly infectious disease during the fall of the Soviet Union in the early 1990s found a strong link between the two and said their findings suggest a similar pattern could emerge now.

"Put simply, there's a lot less money around for spending on public health," said Nimalan Arinaminpathy of Britain's Oxford University, who led the study.

Tuberculosis, which is caused by the Mycobacterium tuberculosis bacteria, is one of three primary diseases linked to poverty, the other two being AIDS and malaria.

The scientists designed models based on economic figures and tuberculosis data and predicted that Latvia, Estonia and Lithuania could see TB increases in the coming years.

Their estimates were for 200 excess cases of tuberculosis per 100,000 people in the population in Latvia, 130 per 100,000 in Lithuania and 75 per 100,000 in Estonia compared with some 40 per 100,000 in Russia over the period of recession and recovery.

Estonia to plant 10 million trees

More than ten million trees are to be planted in Estonia this spring, providing a boost to the country's forestry industry.

According to the Baltic Course, 6,500 hectares of land are to be renewed by the Estonian State Forest Management Centre (SFMC).

Trees planted on 4,500 of them, while a further 1,500 will be set aside for the sowing of new seeds.

Some 500 hectares will be prepared for natural renewal.

In future years, the SFMC intends to increase tree planting by a third, with the order for new tree plants reaching 14.5 a year by 2012-15.

This year, it hopes to have 5.8 million fir trees planted by the end of May, along with 3.6 million pines and 670,000 birches.

Last month, it was reported that forestry was acting as a major driver of Estonia's economic recovery.

Statistics Estonia announced that the country's industrial production was up five per cent in February compared to the same month last year.

Heartsick ? - an Estonian pharmacy may have cure !

At an international summit, leaders often have time to get out and explore. But the NATO foreign ministers who met in the former Soviet state of Estonia last week were running behind schedule because of the volcanic ash cloud hovering over Europe. They were happy to have made it at all.

"The only regret I have is that I had to spend all my time in meetings, instead of enjoying Tallinn once again," said U.S. Secretary of State Hillary Clinton, referring to Estonia's small capital on the Baltic Sea.

I escaped the meetings long enough to look around — and I'm happy the foreign ministers didn't.

Surely, they would have stopped at a major attraction in the town's cobblestone square — the Raeapteek, or Town Hall Pharmacy.

My guide, local historian Jüri Kuuskemaa, told me the place opened in 1422 and may well be Europe's longest continuously operating pharmacy. Legend has it that in the 18th century, a former owner, Dr. Johann Burchart V, nearly saved a Russian czar.

Estonian economy strikes bronze

The 26^th April marks the three year anniversary of the relocation of "The Bronze Soldier" by Estonian authorities. Until this time, the memorial had stood in the centre of

Tallinn next to a commemorative burial site of Soviet soldiers. The explanation offered for its dismantlement was that it symbolized 'Soviet occupation'.

Soviet soldiers of the republic reacted with acts of civil disobedience, and violent clashes with the police resulted in many casualties. The broader consequence was a severe worsening of Russo-Estonian relations. What is the current relationship of these two countries? 

"Relations between the two countries have barely improved', the head of the Baltic sector of the Institute of Countries of CIS and the Baltics, Mikhail Aleksandrov, told Pravda.ru. "Rather, the opposite has occurred, given the fact that Estonian powers, in essence, supported the actions of Georgia during the war in August 2008. Why?

The fact of the matter is that the Estonian leadership intentionally sought to aggravate mutual relations, openly engineering conflict with Russia with the goal of maintaining tension between the country’s two largest communities, Russian and Estonian.”

SEB lost 52 million kroons in Estonia in the first quarter

The Estonian arm of Swedish bank SEB said its first-quarter result was a loss of 52 million kroons.  A year earlier the bank lost 92 million kroons. While a year ago the bank made 332 million kroons in bad loan provisions, the figure was 237 million kroons in the first quarter 2010, reported aripaev.ee.

SEB's main competitor in Estonia, Swedbank, said this week its first-quarter loss was 272 million kroons. Nordea Eesti said today it made a profit of 39 million kroons in the first quarter.

Riho Unt, acting general manager of SEB Pank, said that a positive sign of recovery was that the bank's loan loss provisions were almost half of what they were in the final quarter of 2009.

The bank's operating costs increased from 289 million kroons a year ago to 309 million kroons. Operating income fell from 529 million kroons to 495 million.

Unt said that while the mortgage loan market was slowly recovering, there are positive signs in the export industry. Still, loan volume fell 8% in a year. The bank held 6% less deposits during the quarter than a year ago.

According to Unt, the number of customers with payment problems has stabilized. While there are encouraging news coming from the labour market, the situation is still very fragile and will be restricting growth of domestic demand for years, he said.

Central bank expects lower growth, faster inflation

Estonia’s economy may grow at a slower pace than previously forecasted as domestic demand remains weak, the central bank Eesti Pank said today. Gross domestic product will rise 1 percent this year and 4 percent in 2011, compared with the previous outlook for 1.4 percent growth in 2010 and a 4.6 percent increase next year, reported Bloomberg.

However, economic growth will slow in 2012 to 3.3 percent from 4 percent the previous year, accocding to deputy governor Märten Ross. Ross said at a news conference held in Tallinn that the government won’t need to cut spending further in 2010, and that there may be a ‘slight’ rise in 2011 budget spending.

The bank said in its new outlook that economic stabilization has so far been mainly driven by external demand, with the sectors oriented to domestic demand displaying only limited signs of a rebound. “If growth resumes faster than expected, it shouldn’t be viewed as a return to a steady state since investment activity hasn’t yet recovered,” it said.

Average annual inflation will be 1.3 percent this year and 1.1 percent in 2011, the bank said. In October, it forecast average 2010 deflation of 0.4 percent and inflation of 1.7 percent the year after.

Explore historic Tallinn on a Baltic mini cruise

If you're looking into Baltic cruises while planning your next getaway, you should be sure to find a deal that incorporates a stop in Tallinn.

The Estonian capital is a veritable treasure trove of fascinating sights and fun-filled activities, making it the perfect destination on a Baltic mini cruise.

With a history going back to the 12th century, there are many historic buildings and structures to take in.

The Town Hall Square is home to two of these - the Town Hall itself and the Town Hall Pharmacy, which is the oldest continuously operating pharmacy in the whole of Europe.

Elsewhere, you'll be able to see the wall and towers that surround the Old Town. These were built in the 14th century and around 1.9 km of the original wall is still standing, along with 20 defensive towers - some of which are open to the public - and parts of two of the outer gates.

St Olav's Church and Tower, which was constructed in the 13th century, is worth a look not just because it's a picturesque structure, but also because it was the world's tallest building between 1549 and 1625.

Eesti Energia to survey oilshale deposits in Morocco

Estonian state power company Eesti Energia and Morocco are planning to sign a letter of intention on jointly developing oil shale technology. Under the agreement, Eesti Energia would get exclusive right to survey the country's oil shale deposits for three years.

ERR reported that Morocco was interested in using Eesti Energia's experience and technology for extracting shale oil.

Preliminary surveys are already ongoing and until now it has not been decided how much either side will contributed to the project financially. According to the Estonian energy company, if the results of the survey are positive, Eesti Energia plans to develop the country's oil shale resources and license its Enefi oil shale technology to Morocco.

The company says that Morocco has one of the world's largest oil shale deposits. It has over 10 known oil shale deposits and an estimated reserve of 50 billion barrels of shale oil. In comparison, Estonia extracts 15 tons of oil shale and produces about one million barrels of shale oil a year.

Toomas Hõbemägi