BONJOUR L'ESTONIE

President Ilves on the convening of the Round Table of nationalities convened by the Estonian Cooperation Assembly

Dear members of the Round Table of Nationalities,
ladies and gentlemen, dear friends.

It sometimes seems to me that some pieces of folk wisdom are not wisdom at all – for instance, the saying that “silence is golden”.

I know this is mainly said to discourage pointless prattling. But sometimes it seems that it is taken too literally. It appears that some topics are embarrassing, or at least awkward, and silence is favoured to discussion.

One of these subjects is the relations between different nationalities in Estonia, or to put it more precisely, our ability and desire to bring out the best in all of our fellow countrymen.

Unfortunately, to this point we have not been too successful in developing a frank discussion about the obstacles that keep us from making maximum use of our combined potential.

The discourse on interethnic relations has been marked by too little rationality. The vacuum has been filled by emotions, fears and stereotypes; sometimes various sociological studies have been interpreted to serve a specific purpose.

All this has prevented us from making progress in our discussions.

For that reason, I hope that the Round Table of Nationalities convened by the Estonian Cooperation Assembly does not repeat the mistakes of the past.

Household electricity tariffs to rise 2.8% in June

Estonian electricity prices will increase 2.8 percent for households next month, state-owned utility Eesti Energia AS, according to a Bloomberg report.

The price increase, equal to 9.85 kroons a month for the average consumer, is due to higher transmission fees from grid operator Elering, Eesti Energia said today.

Energy prices rose an annual 2.7 percent last month after the Estonian electricity market was opened in April for corporate consumers, pushing their electricity costs up by more than a third. Still, electricity prices for individuals remain among the lowest in the 27-member European Union, according to Eurostat data.

Is the Estonian tax system failing ?

Viktor Trasberg, professor of economics of Tartu University, writes in Äripäev that the problem with the Estonian tax system is that it is inefficient and now is high time to change it.

Trasberg writes: “The tax system must efficiently fulfil its functions, instead of being an object of national self-admiration". The last decade in Estonia has offered a textbook example of how economic cycles work and how the economy is affected and influenced by various instruments.

One of such important and highly emotional instruments is definitely the tax system. Evaluating the economic and social development of Estonia over the last decade it should be said that the current tax system is so inefficient that it will not take as long in the next decade. Why?

Speaking of the problems of the current system, I would mention three inter-related aspects. First, the Estonian tax system is unable to fulil its main objective – to ensure the functioning of the Estonian state. Last year’s fiscal policy under the slogan “let’s eat the seed and sell our silverware” cannot simply last long. The state apparatus cannot be financed only by large-scale sale of state holdings and cutting funding from activities that are necessary to keep the state running. Claims that we did OK during the economic boom and even had surplus tax receipts are misleading since the state failed to make the necessary development costs and today we are in a situation where our infrastructure, education and administrative systems are outdated and clearly eroding our future competitiveness.

Estonia's retail sales continue to drop

Estonian retail sales continued to decline in April largely driven by a notable drop in the sales of manufactured goods.

Retail sales in goods declined 9% year-on-year in April at constant prices, at the same pace as in March, the Statistics Estonia said Monday. Since the beginning of the year, the fall in retail sales has been relatively stable compared to the same month of the previous year, the agency noted. The fall in trade was mostly influenced by an 11% annual drop in sales in stores selling manufactured goods, though the decline slowed from the previous month.

In April, retail sales of goods of retail trade enterprises were EEK 4.4 billion. On an annual basis, the sales decreased in most of the economic activities, except sales in food, beverages and tobacco in specialized stores and the retail sales of pharmaceutical goods and cosmetics.

The low reference base in 2009 contributed to the growth in sales of food, beverages and tobacco in specialized stores. Sales growth in these stores does not significantly influence the retail sales of goods of retail trade enterprises, because the share of this economic activity was only 3% in April 2010.

Poles brace for electricity price rise

Electricity in Poland has recorded the biggest price hikes in the entire European Union – according to data newly published by Eurostat.

Between 2008 and 2009 prices for electric power in Poland grew by 17.9% while the rest of the EU reported a drop by 1.5% on average.

Cheapest electricity is in Bulgaria, Estonia and Lithuania (about 8-9 euro per kilowatt hour) and most pricey in Denmark, Germany and Italy (20-25 euros).

The average price for electricity in the EU is 16.5 euro (approximately 13 in Poland). In relation to the purchasing power of the Polish zloty, however, these prices rank with the highest in all of Europe. Also natural gas is expensive in this country – while prices have dropped by an average 16% in the EU, Poland has reported a rise of 5.8%.

Estonian industry output shows record gain on exports

Estonian April industrial production rose at the fastest annual pace in at least a decade as export demand improved, signalling the Baltic economy is on track to recover.

Output increased 18.4 percent from a year earlier, the most since records started in 2000, compared with a revised 11.1 percent jump the previous month, the Tallinn-based statistics office said on its website today. Output rose a seasonally adjusted 2.5 percent from March.

An export-led recovery may help Estonia’s economy expand 1 percent this year and 4 percent in 2011, the central bank said last month. The $17-billion economy will probably grow this quarter from a year earlier and compared with the first three months when the economy shrank a seasonally adjusted 2.3 percent on weak consumer spending, the Finance Ministry said.

“An export-led recovery is materializing, as expected in the Estonian economy,” said Annika Lindblad, an economist with Nordea AB in Helsinki, in an e-mailed response to questions. “The upbeat annual growth was significantly boosted by the low base last year, but all in all the industrial production index continued on its gradual rising trend.”

Manufacturing, Exports

Manufacturing of electronic and computer equipment jumped 107.7 percent from a year earlier, and wood processing increased 24.4 percent, the office said.

Lost competitiveness, deficits and the Euro crisis

The eight newest European Union (EU) members (Bulgaria, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, and Romania) are committed to eventually adopting the euro.

But, all already suffer from the problems that dragged the GIIPS—Greece, Ireland, Italy, Portugal, and Spain—into crisis: lost competitiveness, widening external deficits, and deteriorating public finances.

However, the “peggers”—Estonia, Latvia, Lithuania, and Bulgaria, who have fixed exchange rates—are in much worse shape than the “floaters”—the Czech Republic, Hungary, Poland, and Romania.

The structural distortions, including external imbalances, in all of the newcomers suggest that none of them will be ready to join the euro soon, as joining would likely only accentuate the distortions.

When, or if, they adopt the euro, they should apply valuable lessons from the GIIPS’s experience so as to avoid painful adjustments later on.

The Initial Boom among the Newcomers

The process through which the EU newcomers lost competitiveness was largely similar to the one in the GIIPS: lower interest rates and their expectations of rapid convergence to Euro area members’ economic fundamentals led to a boom in domestic demand. Deepening financial integration and low barriers to incoming capital, as well as reduced perceptions of exchange rate risk, particularly among the peggers, helped attract capital inflows.

RMK to open a nature centre at Viimsi

On 28 May, RMK will be opening a nature centre at Viimsi where the principal focus of the study programmes will be on providing information about nature in the suburbs. The nature centre will organise horizon expanding study expeditions for both nursery schools and schools, and for everyone interested.

This is the first nature centre in the vicinity of Tallinn, housed in the renovated former forest district building at Rohuneeme tee 29. RMK’s Viimsi Nature Centre will be open from 10.00 – 18.00 daily during the summer season.

Along the recreation area’s study trails located in the vicinity of Tallinn, the Viimsi Nature Centre will be offering free-of-charge nature education programmes for nursery schools and general education schools, and fee based study programmes for anyone requesting them. The main trails used for study programmes are the Tädu nature study trail in Viimsi and the Harku forest nature trail.

In addition to various educational programmes, visitors to the nature centre will be able to obtain information material and information on opportunities for forest recreation, examine the collection of materials at the nature centre, view films on nature and play games on the subject. Also, Jüri Pere’s photography exhibition, “The Beauty of Details, the Joy of True Things”, will be on display.

Tanel Kangert wins in Tartu

Three-man break makes it to the finish.

The second race of the Estonian Cycling Weekend, the SEB Tartu Grand Prix, was held Saturday on the city circuit of Tartu. Tanel Kangert (Estonian National Team) won the UCI cat. 1.1, 187km race ahead of Adrian Honkisz (National Team Poland) and Toms Skuijnš (National Team Latvia). All three finished in the same time of 4:27:46.

There were many breakaways, but it wasn't until mid-race that the three leaders got away.

Kangert, who was the most aggressive rider for the second consecutive day, said he did not wish for a group finish in the first place, but did not manage to get away from his two competitors.

"My legs were a bit more brisk on the finish line. That was decisive," said Kangert.

Altogether, 12 teams and 84 riders started the race which took place under ever changing weather conditions.

The Estonian Cycling Weekend continues tomorrow with SEB 29th Tartu Rattaralli bringing more than 4,000 registered pro and amateur participants to the roads of Southern Estonia.

Triogames becomes third licensee under new Estonian gambling laws

OÜ Triogames has been granted an online gaming license by the Estonian Tax and Customs Board and becomes the third approved Internet gambling operator within Estonian borders. In announcing the decision, the board also added more sites to the country’s blacklist of IP-blocked websites. The list now contains nearly 300 sites firewalled from citizens under the new Estonian gambling laws.  

The board technically issued Triogames two operating licenses in granting the company permission to operate its Triobet brand name on both casino games and lottery competitions. Triogames has also applied for an application for long-distance gambling organization. If this license were granted, Triogames would again be the third to receive such a permit.  

Internet gambling in Estonia was made legal at properly licensed online casinos on January 1 of this year. The reasons for the change were seen as financial, potentially even a salve for the country’s recession woes, with Estonia looking to switch currencies and pick up the euro in 2011. (The European Commission confirmed this on May 12 of this year.)  

Though the government began issuing licenses to Internet casino operators last year, the law states that foreign-owned websites will not be granted such a license until 2011. An Estonia-based, Playtech-powered Olympic Entertainment Group casino and poker room was the first to be approved by the tax and customs board, and it opened on January 21.

Tom B.

International money transfers to Estonia likely

The number of young Britons likely to be making use of international money transfers after moving to Estonia has remained stable over the past year, newly-reported figures suggest.

Since 1991, emigration out of the Baltic state has exceeded the number of foreigners looking to make a new life there.

However, over the course of 2009, this difference stood at just 1,000 people, with some 3,643 people opting to move to Estonia and potentially make use of international money transfers to help them settle into their new life there, Baltic Business News reported.

The Statistics Estonia figures also revealed that the most popular sources of immigration over the past 12 months were Britain, Germany, Sweden, Finland and Russia.

In addition, the data shows that young people in their 20s to be the most likely to move out of or into Estonia.

Estonia is in danger of default construction

Estonian economy is in a stagnation

In brief: The construction sector of the Estonian economy is in a dead end. The Government continues to seek ways to avoid default.

In the first quarter, the total value of construction works completed in Estonia decreased by 46,4% from the previous quarter. In comparison with I quarter 2009 decline of the indicator was 40%. At the same time in the segment of building construction volume decreased by 40,6%, and in the segment of infrastructure - on 38,9%, according to a report of the Estonian Statistical Office.

Quantity constructed for January-March of residential property increased by 11,4% compared to the same period last year. The number of construction permits for residential projects, issued for the I quarter has grown three-fold year on year. Note that comparable data on the rates of construction in Estonia earlier led by professionals of the local property market.

Pavel Nurminen

Ministers : Estonian-Russian trade set to improve

At a meeting with Juhan Parts, Estonian economy minister, Russian transport minister Igor Levitin said it was important to ensure beneficial rates in the rail transit between the two countries and improve air transport logistics as well as an uninterrupted border crossing in road transport.

Minister Levitin said long-term certainty of the continuation of Tallinn-St Petersburg flights would have to be ensured. In view of the growing trade and tourism between Estonia and Russia, logistics between the two countries should be improved.

Toomas Hõbemägi

Banks discuss creating a common pan-Baltic network of ATMs

Baltic units of Swedbank, SEB, Nordea Bank and Danske Bank (Sampo Pank) launched a cooperation project to analyze the possibility and necessity of creating a common pan-Baltic network of ATMs, LETA/Postimees Online reports.

The first stage of the analysis must answer whether it is necessary to launch such a project and whether it would benefit clients and banks.

SEB communications manager Silver Vohu explained that for clients of banks the main benefits would be that there would be no "alien" ATM for them for use of which they would have to pay extra – all ATMs of the network would be like the client's own bank's.

The ATMs in the network would use a neutral brand. Vohu said that a similar system operates in Finland, the Otto system. In Germany and Belgium there are also pan-bank operators offering such a service.

In the first stage the project is an analysis project. In summer and autumn the analysis of initial offers of service providers will be analyzed and then conclusions will be drawn for further steps. The results of the preliminary analysis that will show whether the project will be developed further or not will be revealed at the end of October.

Currently the four big banks were included in the project because of simplicity and speed since they have pan-Baltic ATM networks. If they decide to launch the common network, other banks have to have a chance to join it.

The four banks have 936 ATMs in Estonia, 604 in Latvia and 868 in Lithuania.

Juhan Tere

Tallinna Kaubamaja concern saw loss fall by 89% in Q1

Estonian retail concern Tallinna Kaubamaja Group saw its loss fall 89% in the first quarter of the year 2010 as compared to the same time last year, to 5.9 million kroons (0.4 million euros). The loss of the first quarter of 2009 was 52.3 million kroons (3.3 million euros).

In the first quarter of 2010, the consolidated non-audited sales revenue of Tallinna Kaubamaja Group amounted to 1.4 billion kroons (91.5 million euros). The sales revenue of the group in the same period of 2009 was 1.5 billion kroons (97.4 million euros), which amounts to a decrease of 6% compared to the previous year, reports LETA.

The company told Tallinn bourse that signs of economic stabilisation could be observed in the second half of the first quarter, when the sales revenue of Kaubamaja department stores in March was on the same level with the previous year. In the first quarter of 2010, the loss of Kaubamaja department stores was 11.1 million kroons (0.7 million euros), a result that is better than the result of previous year by 0.3 million kroons (0.02 million euros).

In the first quarter of 2010, the consolidated sales revenue of the business segment of supermarkets amounted to 1.1 billion kroons (69.2 million euros), which is 4% less than in the same period of the previous year.

Ericsson Tallinn could use some Estonian suppliers

According to the Estonian Minister of Economy, small and medium companies from Estonia could be involved in logistics at Ericsson Tallinn unit.

The plant will start in mid August to produce the 4G network equipment on a larger scale. Earlier this week, Ericsson Tallinn delivered the first 4G network base station manufactured in Estonia to the mobile operator EMT, according to EITA.
 
The base stations that will be produced at this unit is to be shipped mainly to Europe, others to the USA and Africa.

People’s Union board resigns, joins Social Democrats

TALLINN — After the merger proposal with the Social Democratic Party was voted down by the party congress May 24, the troubled People’s Union is splitting up.

The former vice chairmen of the People’s Union, Ene Tomberg along with board members Kajar Lember, Anto Liivat left the party Thursday and joined the Social Democrats.

Meanwhile the party’s former chairman Karel Rüütli also resigned from the People’s Union Tuesday and has now joined the Social Democrats.

Tomberg told the Postimees newspaper that instead of debating about the future direction of the agrarian People’s Union party members have focused on the party’s wallet and petty personal rivalries, degenerating its potential.

Meanwhile the Estonian media is still speculating about whether the increasingly marginal People’s Union will join Tallinn Mayor Edgar Savisaar’s Center Party.

Nathan Grrenhalgh

Estonia publishes first child's primer in Russian

A presentation of the first Russian-language child's primer published in Estonia was held on in Tallinn yesterday, the Estonian television reported.

Russian-speaking minorities constitute 25.6% of the country's current population and 58.6% of the native Estonian population is also able to speak Russian.

The Russian language was the second official language in Estonia during the Soviet era, but with the collapse of the Soviet Union Estonian went back to being the only state language in Estonia.

Before the release of the book, Russian-speaking children had to use the primers published in Russia, which introduced the Russian culture, history and geography.

The new book, on the contrary, offers children stories about Estonia, its history, culture, geography, and local folklore.

The Russian-language primer uses the same illustrations and structure as the Estonian one, but its content is mostly original, the TV report said.

Estonian april inflation : The highest in 14 months !

The Estonian economy posted its most accelerated inflation in 14 months, Bloomberg reports. Producer prices in the country increased by 0.9 percent in April 2010, the highest the prices have risen since October 2008.

High raw material and fuel costs as well as growing export demand are among the factors contributing to the high price of goods in the country. The European Commission noted on May 10 that Estonia’s progress in reducing its inflation is sustainable, but the European Central Bank said May 12 that Estonia is struggling to keep its inflation under control.

Ansip receives Estonia’s invitation to join OECD

Paris – Yesterday, Prime Minister Andrus Ansip and Minister of Finance Jürgen Ligi attended the formal accession ceremony of the Organisation for Economic Co-operation and Development (OECD).

The ceremony during which Mr Ansip received Estonia’s official invitation to join the organisation took place at the headquarters of the OECD.

Invitations to join the OECD were also extended to Israel and Slovenia.

In his speech, Prime Minister Andrus Ansip said that receiving the invitation to join the OECD was a great honour and privilege for Estonia.

“This year is very important for Estonia,” Mr Ansip said, upon addressing the ministers of the OECD countries. “For a long time, Estonia has had two important policy goals: joining the OECD and becoming part of the euro area. Today, we can say that the first goal has been achieved, and the second one is within our reach.”

According to the Prime Minister, Estonia sees the OECD as a value based forum that unites ambitious and dynamic countries. He continued by saying that Estonia shares the views of OECD members who are not content with simply maintaining the status quo.

“We are always open to new ideas,” Ansip stated. “We have gained a lot of experience over the years and are prepared to contribute this experience to the OECD knowledge base.”

In his speech at the OECD, the Prime Minister also gave an overview of Estonia's economic and financial policy. He emphasised the importance of Estonia’s fixed exchange rate, strict budget policy, simple tax system, and favourable business environment.