BONJOUR L'ESTONIE

Estonia down to 25th in digital economy ranking

The Economist Intelligence Unit and IBM's annual technology benchmarking study on Tuesday ranked Estonia down one place to 25th in the world's "digital economy rankings" among 70 countries.

According to the survey that was previously known as e-preparedness list, Estonia still ranks highest among the Central and Eastern European countries, ahead of Slovenia (29th, Czech Republic (31st), Lithuania (34th) and Latvia (37th).

Sweden overtook Denmark as the leading country, but all Nordic states ranked in the top ten. Finland, Japan and South Korea improved their ranking by six places.

The top 3 of the digital economy list were Sweden, Denmark and the US. Among Central and Eastern European countries, Slovenia ranks 29th, the Czech Republic 31st, Lithuania 34th and Latvia 37th.

Toomas Hõbemägi

Tallinn Capital of Culture funding resolved

TALLINN — The EU’s culture capital envoy’s visit to Estonia this week cleared up a 23.5 million krooni (€1.5 million) funding question mark for the Tallinn 2011 European Capital of Culture project.

Sir Robert Scott, the European Union project monitoring representative, paid a visit to Tallinn on Monday to inspect what is going on with Tallinn 2011 Culture Capital project funding after Tallinn was not granted with 23.5 million krooni Mercury Prize from the EU in April. Turku, Finland, the other 2011 culture capital did not have any such problem.

The foundation’s representatives went to Brussels on April 28 to meet the European Commission’s Capital of Culture monitoring division, but while the program was greeted with applause the prize money was not given. Back then the problem stood between the Tallinn municipal and national governments’ inability to write a guarantee letter for equal funding. Both the city and the state had promised to commit 50 million krooni (€3.3 million) for the 2011 budget.

However, during Scott’s meetings with Tallinn Mayor Edgar Savisaar and the Minister of Culture Laine Jänes, it was revealed that Brussels will not require a guarantee letter after all, but only the  government’s and Tallinn municipal government’s cooperation letter on culture capital project funding.

Narva bridge to get toll

TALLINN — Expect the lines at the Narva bridge to get worse starting Wednesday.

The Narva bridge, which serves as the border crossing point between Russia and Estonia has been overloaded with cars for years, with the lines occasionally reaching the city limits. Now tollbooths should only exacerbate the wait.

The fares go into force Wednesday after interior minister Marko Pomerants and Narva Mayor Tarmo Tammiste signed an additional toll management contract.

The fee for cars will be 30 krooni (€1.9) and for trucks 220 krooni (€14). The money will go to fund the Estonian Border Guard. It will be applied to anyone crossing regardless of their passport status.

“Everybody who are passing through will pay, it doesn’t matter whether they are in the priority line or not,” Tammiste told Postimees.

The agreement will allow the company to increase fares to get trucks across the border is 250 krooni (€16), cars up to 100 krooni (€6.40), and motorcycles for 50 krooni (€3.10) if it chooses, although no timetable for increases has been set.

Kai Joost

Petra Kvitova / Kaia Kanepi

Petra Kvitova vs Kaia Kanepi: Petra Kvitova [-170 ML] has defeated Denmark’s Caroline Wozniacki to reach the quarterfinals at Wimbledon. She will now play Estonia’s Kaia Kanepi [+130 ML] for a chance at the semi-finals at the All- England Club. The Czech sent Wozniacki home on Monday, as she took complete command of the match winning 6-2, 6-4.

Wozniacki looked out of sync from beginning to end, and ultimately could not keep up with the up and coming Czech. Kvitova defeated the world’s No. 4 player in only 46 minutes. “So I play very well on the grass,” Kvitova said, “and I play very fast. So she didn’t play her game, so maybe that’s why was quick.”

The world No. 62 has made two appearances prior to this year’s Wimbledon, and for both went home in the first rounds. But it seems as though someone has been putting in some work, as she had 23 winners compared to just four by the third seed. The young Czech did not allow her Wozniacki a single break point.

Both players had 11 unforced errors. Kvitova now faces Kaia Kanepi of Estonia, who beat Klara Zakopalova 6-2, 6-4 in the fourth round.

Vaisala contributes to rescuing the Baltic Sea by delivering a hydrological forecasting system

The Baltic Sea Action Group works to bring together all parties of society to rescue the vulnerable marine ecosystem of the Baltic Sea. Vaisala has joined the effort and will deliver a hydrological forecasting system for the Pärnu River basin in Estonia.

The project is being carried out in cooperation with the Estonian Meteorological and Hydrological Institute (EMHI) and the Tallinn Technical University (TTU).
When completed, the data provided by the system will be used for monitoring water levels and quality in the Pärnu River. The Pärnu River drains into one of the large bays of the Baltic Sea, the Gulf of Riga. Therefore, the water quality of the river directly influences the Baltic Sea water quality, which in turn emphasizes the importance of monitoring the river water.

"The new system is especially beneficial in terms of providing us with more specific information on the water level and flow in the Pärnu River. Real-time hydrological forecasting helps us predict possible flooding situations and generally makes us better equipped to manage the whole water system in Estonia," says Juta Kuik, head of EMHI's hydrological department.

"The Pärnu River is also a very popular tourist and recreation area, and these activities benefit from timely water level forecasts as well. We already have plans to extend the system to other areas," explains Kuik.

Swedbank seeks bankruptcy of Estonian window maker Glaskek

Sweden's banking group Swedbank seeks bankruptcy for window maker Glaskek after loosing faith in successful restructuring of the company; the bankruptcy application by Swedbank was filed on June 22, LETA/BBN reports, referring to Aripaev.

Lars Nilsson, the head of Swedbank Baltic unit that manages high business risks noted that the bank had been actively involved in looking for solutions with Glaskek since last autumn.

Nilsson said that the bank and Glaskek had been jointly analyzing possibilities to restructure the company, but after an in-depth study, the bank no longer sees a possibility to restructure Glaskek into a viable business by restructuring.

"Therefore, the issue of filing the company for bankruptcy surfaced," noted Nilsson.

However, the bank says that it aims to keep the company's viable business in operation so that it could be sold to new owners as an integrated complex.

"Therefore, the bankruptcy would not necessarily mean selling the company's individual assets, rather than a clearly regulated legal process in the course of which creditors would be able to reclaim some of their loans," added the banker.

Juhan Tere

Estonia’s tax burden in 2008 was among the lowest in EU

In 2008, the tax burden in Estonia was 32.2% of GDP, falling by 0.1% in comparison to 2007, writes LETA/National Broadcasting. According to a comparison compiled by Eurostat and European Commission, Estonia’s tax burden was among the lowest in comparison to other EU Member States.

The share of direct taxes in GDP increased by 0.2%, mostly due to the growing share of the individuals’ income tax. According to the Ministry of Finance, the share of enterprises’ income tax in GDP did not change. The share of social insurance taxes in GDP grew by 1% – mostly due to an increase in the social tax revenue in 2008.

The decline in the VAT revenue caused the share of indirect taxes to fall by a total of 1.4% of GDP.

Due to a number of ad hoc measures (e.g. suspension of payments into second pillar pension funds, stockpiling of goods subject to excise taxes) the tax burden in Estonia rose to 36.4% of GDP in 2009.

The Ministry of Finance projected that the tax burden in Estonia will start falling again this year as well as during following years.

New kids in the euro bloc

You can learn a lot from a motorcade. Russians recently took to the streets with dummy blue lights atop their Ladas in protest at being constantly run off the road by oligarchs, and in much of Central and Eastern Europe the high-speed fleets of expensive metal for minor ministers reach proportions that any tin-pot South American dictator would be proud.

Following Estonian Prime Minister Andrus Ansip's motorcade out of Tallinn is rather different. For one thing, it takes 10 minutes to notice that the car in front is the PM's. His "fleet" consists of two nearly-new BMWs of a kind that are rather common in BMW-mad Estonia. Neither of the cars has flashing lights, sirens or flags. They obey the speed limit even on long, empty straights. They stop at traffic lights and pedestrian crossings, trundling behind tractors when necessary and covering the kilometres southwards at a steady pace.

Then, waiting at the Latvian border is a vast fleet of Latvian police and security cars that swallow up Ansip and whisk him away at top speed over Latvia's bumpy, dusty highway towards a meeting in Riga.

Such sensible and steady progress could usefully serve as a metaphor for his country's drive towards the Eurozone, which it is likely to join next year once EU finance ministers give their final approval on July 13. That should be a mere formality, a view shared by Ansip himself. "Our main goal for this year is to join the Eurozone from January 1st, 2011 and now it seems that developments are quite positive," Ansip told bne at the World Forum for Foreign Direct Investment in Tallinn, a day after the same group of ministers signalled their readiness to wave Estonia into the club on May 12. "According to our understanding, we fulfill all the Maastricht criteria limits in a sustainable way."

Estonian Air fly’s higher in May 2010

Travelling by the Estonian Airline giant Estonian Air increased over 2010 May. This is great news for the economy and the people. Over 50,000 passengers were carried during the month May which is an increase of over five percent.

Estonian Air has an excellent sense of time keeping being ninety-seven percent; this is a very good example set by the Airline and one most should follow. The Airline is owned by the state of Estonia, Cresco (the investment bank) and the SAS Group, this type of split generally gives organisations a good stability in the economy allowing them to drive forward even when there is tough time ahead.

One of the key features of Estonian Air is its Corporate Programme allowing organisations to be more expenditure efficient when travelling on business where they promote a smooth and comfortable journey. Additional features are their fixed fares and flexible flying terms with a constant update to their clients.

50% of Estonian residents oppose the adoption of euro

A poll carried out by AS Emor and commissioned by the Information Centre Citizens’ Republic (Teabekeskus Oma Riik) determined that most individuals oppose replacing the kroons with the euros, writes LETA/National Broadcasting. According to the poll that was carried out in the middle of June, 49.9% of respondents oppose the adoption of the euro while 39.48% support the move.

10.62% of those polled did not have an opinion on the matter.

The poll also determined that most Estonian residents would like a referendum organised to determine whether Estonia should adopt the European single currency.

59.52% of those polled found that a referendum should be organised to decide whether or not to transition to the euro. 31.86% of the respondents opposed a referendum and 8.62% did not have an opinion.

Juhan Tere

Kanepi continues inspired run on grass

Kaia Kanepi, also known as the Tall One from Tallinn, beat Klara Zakopalova, 6-2, 6-4, to continue her great run on grass and advance to the quarterfinals. She won despite serving at only 52 percent, stepping up her return game to beat the Czech, who looked tentative on big points. Kanepi, by contrast, won six of nine break points in a match that was a huge opportunity for both players.

For Kanepi, who won three matches at Roehampton to qualify, this was her 14th match on grass in the last three weeks. She qualified at Birmingham, then advanced to the quarterfinals, where she lost to Li Na, the eventual champion. At Roehampton, she advanced easily, but the grass court matches have obviously helped her. In the first round, she upset the French Open runner-up Samantha Stosur, 6-4, 6-4, out-serving Stosur and holding her nerve beautifully to win.

She plays Petra Kvitova, who handily beat Caroline Wozniacki, for a spot in the Wimbledon semifinals.

GEOFF MACDONALD

Property prices not to peak any time soon

Riho Unt, board chairman of SEB and head of the , believes that it will be at least ten years before real estate prices will peak.

Unt said in an interview to ERR that real estate prices could start growing again, but only moderately in the second half of 2011. "But don't expect prices to grow 50% a year as we saw in 2005 and 2006. Considering that property prices are down 40 to 50% from the peak level, it would take at least ten years before they would be back in 2007 levels. And there would probably be a new economic crisis in the next ten years," said Unt.

According to the banker, the biggest mistake that homeowners can do is to treat home purchase as an investment. "Real estate is an investment to people who have a lot of free money, who are not going to sell it rapidly and don't expect higher yields than 10%. This is why in its essence real estate is illiquid," said Unt.

Speaking of the economy in general, Unt said that interest rates that we had during the boom times will not return. Although the six-month Euribor recently exceeded one percent, current home loan borrowers should not fear that it will continue to climb rapidly in near future. "If you consider the weakness of the European economy, rapid growth of Euribor in the short term, is highly unlikely. Historically, Euribor has been between 4 and 6%, therefore 1% rate is definitely very low," he said.

Economic recession did not influence poverty rates in Estonia in 2008

According to Statistics Estonia, in 2008 the growth of wages and salaries slowed down but the increased pensions and governmental benefits helped to maintain incomes. Therefore the relative poverty remained on the level of 2007.

In 2008, 19.7% of the Estonian population lived in relative poverty, which is approximately as much as in 2007 when the rate was 19.5%. Social transfers (governmental benefits and pensions) helped to maintain incomes, as they were not included in income the relative poverty rate was even 37.5% in 2008, (in 2007 – 36.3%).

In 2008, a person was considered to be in at-risk-of-poverty if his/her monthly equalised disposable income was below 4,858 kroons. The at-risk-of-poverty threshold rose by 518 kroons compared to the previous year. Also in 2008 the difference in income between the poorest and richest fifth of the population stayed fivefold.

The elderly is rather the age group that still lives in poverty. In 2008, every third person aged 65 and older and 14% of persons aged 25–49 lived in relative poverty. Compared to previous years it can be noticed that the number of younger people living in relative poverty is increasing, and the number of persons aged 65 and older living in poverty is decreasing.  The main reason is more stable income of persons in pension age compared with other age groups.

Estonia ranks second in Europe in terms of use of opiates

The latest World Drugs Report indicated that Estonia ranks second in Europe in terms of use of opiates, writes LETA/National Broadcasting.

According to the report, Estonia follows closely Scotland – 1.5% of the adult population here use opium-based drugs, including heroin. Consumption of cannabis is also growing – this is used by six per cent of the adult population.

Indrek Kalikov, syringe replacement project manager of the Aids Support Centre, noted that experts have remarked an increase in drugs consumption among Estonian-speaking population in particular.

While the international anti-drugs day was celebrated across the world with a number of events on Saturday, Estonia did not pay any attention to this day.

Juhan Tere

Food in Estonia costs 80% of EU average

An EU-wide price survey of  food and non-alcoholic beverages based on 2009 prices shows that food prices in Estonia are 80% of the EU average and tobacco prices only 58% of the EU average. However, price of alcoholic beverages in Estonia was 6% higher than the EU average, according to Eurostat.

In the Baltics, the most expensive food and non-alcoholic beverages in comparable terms are in Latvia with prices being 85% of the EU average and the cheapest food and non-alcoholic beverages are in Lithuania with 74% of the EU average.

According to the survey, the price of a comparable basket of food and non-alcoholic beverages was more than twice as high in the most expensive EU27 Member State than in the cheapest one.

Denmark was nearly 40% above the EU27 average and had the highest price level for food and non-alcoholic beverages in the EU27 in 2009. Ireland, Finland, Luxembourg, Austria, Belgium, Germany and France were between 10% and 30% above the EU27 average.

Italy, Cyprus, Sweden and Greece were up to 10% above the average, while the Netherlands, Spain, the United Kingdom, Slovenia, Malta and Portugal were up to 10% below.

Estonia and France are the European cup combined events Super League champions

Estonia and France’s Romain Barras took the honours in the Decathlon while France and the Ukraine’s Hanna Melnychenko came out on top in the Heptathlon at the European Cup Combined Events Super League in the Estonian capital Tallinn on Sunday.

The individual men’s event went down to the wire, only decided on the very last event the 1500m, but Barras’ superior prowess as a distance runner proved to be crucial and he finished with a total of 8313 points, his second best performance ever.

Estonia’s Mikk Pahapill, the 2009 European Athletics Indoor Championships Heptathlon gold medallist, was second with 8198 points while his team mate and overnight leader Andres Raja ended the weekend third with 8023 points.

Raja stayed in the lead after the first event at the start of the second day after clocking 13.84 in the 110m hurdles, the best by anybody, and extended his lead over Barras to 127 points.

However, Pahapill had an excellent Discus throw of 49.81m to move in front by five points ahead of his compatriot after Raja could only throw 41.84m.

Pahapill kept his lead after the Pole Vault, in which he cleared 4.90m, but Barras overtook Raja and moved into second place with an excellent clearance at 5.00m while Raja could only manage 4.80m.

His lead narrowed to just three points after Barras threw the Javelin 63.71m to Pahapill’s 62.05m but then the Frenchman, one of the best 1500m runners among the top-level multi-event exponents, finished off his two days with a time of 4:25.03 to come home almost 20 seconds in front of Pahapill who ran 4:43.21.

Estonian composer commemorated with concert in Turkey

The Estonian composer Eduard Tubin, who spent most of his life in Sweden, did not become famous when he was alive. Appreciated only after his death, he could not have imagined that his birthday would be commemorated in a country for away from his native one or that of his exile. Yet, as his son lives in Kaş, a seaside town near Antalya, for the second time his birthday has been commemorated with a concert.

Despite the stormy weather, a multinational string orchestra on stage in Kaş amphitheatre last Wednesday performed to commemorate the composer’s 105th birthday. Actually, the musicians, conducted by violinist Dr. Orhan Ahıskal, started the concert a bit earlier than scheduled due to the unfavorable weather conditions. Though it was totally unusual for Kaş in this season, dark bulky clouds, as if implying an ascending tornado, gathered over the sea with lightning and thunder and spraying raindrops. The music stands were hardly kept upright, and the scores flew around.

In this unbelievably extraordinary setting, the musicians went on playing enthusiastically, and the audience did not move a bit out of appreciation for the artists’ sense of devotion and purpose. As Petra Vahle, a viola player, said after the concert, “The orchestra wished to perform this concert so much that we decided to start a bit early to be able to play at least a few pieces before the probable heavy rainfall.”

Stepashin honors Estonia independence fighters

The Chairman of the Russian Audit Chamber Sergei Stepashin has laid flowers to the Red Army Memorial in Tallinn and to a memorial to Estonians who fell in their country’s independence war in 1918-1920.

Stepashin is the first top Russian official to pay tribute to those who fought against the Germans and the Bolsheviks.

The war ended with the signing of a peace treaty under which Soviet Russia became the first country to recognize the independence of Estonia.

In an interview broadcast by Interfax, he said he had laid flowers on his own accord as a humanitarian move.

The Russian Audit Chamber chief is on a visit to Estonia at the invitation of the country’s state inspection agency.

Cannavaro issues Azzurri warning

Former captain Fabio Cannavaro is warning of dark days ahead for the Azzurri as they prepare to bounce back from World Cup humiliation in their Euro 2012 qualifiers (Italy 7/1 Euro 2012 Outright).

The 2006 world champions have lost their grip on their crown after a limp exit following their poor Group F campaign where Marcello Lippi’s men finished bottom behind Paraguay, Slovakia and even minnows New Zealand.

Lippi will now be replaced for the Euro 2012 qualifiers by Cesare Prandelli but Cannavaro, who has retired from the international stage after a record 136 appearances, says Italian football is facing a crisis.

He said: “I think there are not many changes we can make. At the moment, Italy is not producing players like in my generation when we had great players.

“It’s not just the national team, it’s the clubs. We have good players but not top drawer. I’ve been saying for a while that the system has to change.”

Italy face Serbia, Northern Ireland, Slovenia, Estonia and the Faroe Islands in Group C, starting against Estonia on September 3.

Bradt's Estonia

This week's essential reading is a guidebook: Estonia by Neil Taylor, published by Bradt. I would not normally make a guidebook pick of the week on this blog, but Neil Taylor's book is different. For a start, Bradt is the only major publisher to treat the Baltic states separately and give them each their own book. The lazy conflation of Estonia, Latvia and Lithuania into a single region is a tiresome hangover from the days when they were called the "Soviet Baltic Republics".

The book covers almost every visitable corner of Estonia, from the grim ruins of the old Soviet airbase at Paide near Tapa to the Hanseatic delights of the Tallinn old town. The author's affection for his subject shines through—but is never sickly. If a drive is dull or a museum tasteless, he says so.

It would be nice if more guidebooks showed that kind of honesty. And it would be nice if those responsible for Estonia's tourist industry would read the book and perhaps take Mr Taylor's gentle but well-directed advice: for example in ensuring that the staff at the long-distance bus station ticket office all speak enough English to sell tickets.