BONJOUR L'ESTONIE

Euro ends turbulent 2010 on high

LONDON : The euro rose sharply against the dollar on Friday at the end of a turbulent year for the eurozone and as Estonia prepared to become the latest country to adopt the single currency.

The euro jumped to 1.3354 dollars in morning trade here from 1.3286 dollars late in New York on Thursday.

The dollar dropped to 81.39 yen from 81.55 yen on Thursday.

At the stroke of midnight in Estonia, along with ringing in the new year the nation of 1.3 million bids farewell to its kroon, adopted in 1992 to replace the Soviet ruble, and becomes the eurozone's 17th member.

It is a move pitched by the government as economic good sense despite the eurozone's turmoil, but which has won only a muted welcome from the Baltic state's public.

Opponents of the switch plastered the EU Baltic state's capital Tallinn with posters on Friday.

"Estonia! Welcome to the Titanic!", read posters euro opponents fixed to garbage cans in central Tallinn, highlighting the debt and deficit crises which have plagued eurozone members Greece, Ireland, Portugal and Spain.

Half of Estonia's ATMs are stocked with Euros

As of 6:00 on December 31, around half of Estonia's 800 ATMs were flush with euros and shut down, awaiting the first minutes of 2011 to join the EU's single currency.

Escorted by the police, the security personnel swapping Estonian kroons for euros believed the biggest hurdle would be the weather, as Estonia is experiencing the most snow-packed blizzards on record.  Everything has gone smoothly so far.

"Luckily there have been no blizzards, the roads are open and so far the cash carriers have had no problem getting to the ATMs," said Veiko Vaher, division director for the security company, G4S.

The security company began working on the previous evening. Once an ATM is filled with euros, the machine will be shut down until January 1. A small number of ATMs owned by Sampo and Nordea banks will remain in service.

Estonia leads among Baltic countries in ''The Economist's'' global democracy rating

The influential British business and world affairs magazine ''The Economist'' has compiled its global democracy index, with Latvia ranked 48th in the world and described as a ''democracy with flaws''. Out of the three Baltic states, Estonia is rated highest, and is in 33rd place. Estonia has moved up four places in the index since 2008. On the other hand, Lithuania is 41st in the latest democracy index, one spot below its 42nd position in the 2008 index.

The index provides a snapshot of the state of democracy worldwide for 165 independent states and two territories – this covers almost the entire population of the world and the vast majority of the world’s independent states (micro states are excluded), writes LETA.

The Economist Intelligence Unit’s Index of Democracy is based on five categories: electoral process and pluralism; civil liberties; the functioning of government; political participation; and political culture.

Latvia received its best evaluation in electoral process and pluralism, as well as civil liberties – 9.58 and 9.12 points (out of ten) respectively.

Tallinn plans new tourist attraction

European funding is to enable the refurbishment of the Tallinn TV tower into a key tourist attraction.

Estonia will benefit from 5.5 million euros from the European Regional Development Fund to help restore the 314-metre tower. It is hoped that the project will be completed by the end of 2011, reports EER News.

"Since its inception, Tallinn's TV tower has been a symbol of the capital," explained Riina Roosipuu, director of the tower's managing foundation.

"From its beginnings the TV tower has been a loved attraction for foreign and domestic tourists."

The tower was closed in 2007 following concerns about safety and a number of fire protection violations but is still regarded as a major symbol in Estonia's political history. In 1991, the tower was a key location in the country's fight for independence.

The European Regional Development Fund has also helped a number of other key projects in Estonia including modernising and improving safety at Tartu airport and Kuressaare airport.

Growth likely in russian tourism

If trends continue, the New Year holiday may set new records for Russian tourism in Tallinn.

"Interest in our country as a tourism destination grows every year, and we consider cooperation with Russia to hold a lot of potential," said Small Planet Airlines managing director Jelena Hmelnitski, announcing her charter airline's contract to bring their first 300 Russian tourists to Tallinn for the 2011 New Year.

For the market as a whole, Enterprise Estonia data confirms that arrivals and overnights of Russian tourists reached a new peak in 2010, with over 100,000 Russian tourists staying at accommodation establishments during the first nine months of 2010 (47 percent higher than the same period a year ago).

 

"It has to be remembered that Russia was one of the very few growth markets also in 2009," reads an Enterprise Estonia report, which also noted the biggest growth was in New Year's trips occurred in January. 

 

The report cited a general increase in 2010 Russian outbound tourism which has benefitted a large number of European destinations. Recently, the state lowered the sum for purchases eligible for a VAT refund for non-EU travelers, which is seen as particularly benefitting Estonia. 

Baltic prime ministers will jointly celebrate introduction of euro in Estonia

The Baltic prime ministers will jointly celebrate the New Year's Eve and the introduction of the euro in Estonia, Prime Minister Valdis Dombrovskis (Unity) informed the media yesterday.

Dombrovskis has accepted invitation from Estonian Prime Minister Andrus Ansip to visit Estonia. Lithuanian Prime Minister Andrius Kubilius and European Commissioner for Economic and Financial Affairs Olli Rehn will also participate in the celebrations, writes LETA.

As reported, on January 1, 2011 Estonia will become the eurozone's 17th member and the first Baltic state to introduce the euro.

Analysts predict that Estonia will most likely be the last new EU member state to enter eurozone in next few years, due to Poland and Czech Republic's cautious reaction to the crisis in the single currency bloc.

Still, analysts point out that the introduction of the euro in Estonia is better than the uncertainty regarding the kroon, and it will give Estonia new opportunities to attract investments.

The introduction of the euro marks the culmination of Estonia's move to the West, after joining the EU and NATO in 2004.

Nina Kolyako

Birth rate nears 20-year high, accident deaths at 60-year low

Prime Minister Andrus Ansip said at a government press conference that in the year 2010, Estonia's birth rate may have grown to implement positive population growth for the first time in 20 years.

Birth/death rate statistics were promising in the month of November for the first time since 1990. Ansip said that in addition to more births, the positive numbers could be a result of a dramatic decline in deaths resulting from accidents.

The Prime Minister was happy to point out a major fall in traffic-related fatalities. This year marks the lowest number of deaths resulting from car accidents in 60 years. That figure is well under 100.

"This is due to the hard work of the Road Administration and the police. Investment into roads has begun giving results and surveillance has improved significantly. We need to thank the people," said Ansip.

Some Valka, Latvia Residents Switch Tax Home to Valga, Estonia

The southern town of Valga, which is in the process of reorganizing its records on taxpayers, has turned out moderately successful in attracting Latvians from the adjacent twin town of Valka to register as tax-paying residents.

New Valga residents now include about ten Latvians who find that it is cheaper to declare their income in Estonia.

Valga town leaders are amenable to the idea of amending the existing legislation so that it would allow a part of the Latvians' income to flow into the municipal treasury even if they reside on the other side of the border but work on the Estonian side, reported ETV.

 

Currently the municipality gets about 11.4 percent of the wages earned by the gainfully employed. In a time of strapped budgets, many municipalities are finding it important that all residents and people who use local services also pay taxes locally - that is why Valga put out out the call for people to register as local taxpayers. 

 

Besides residents who have moved to Valga from surrounding rural areas, said Valga mayor Ivar Unt, the responses also include "Latvians for whom it is cheaper to pay taxes according to the Estonian taxation system."

Just a half of active Estonian web domains have been reregistered

Just around a half of active Estonian web domains, or around a quarter of all Estonian internet domains have been reregistered so far despite the deadline for the action nearing, LETA/Äripäev.ee cites the evaluation of Elion.

The deadline for reregistering all of Estonian domains is on January 5 and after that, the domains that have not passed the preregistration process, will be deleted and someone else can apply for them.

Elion’s domain products business manager Päärn Brauer said that it is the high time to reregister one’s domain since otherwise there is a real possibility of losing it.

"By now around a fourth of around 80,000 domains in Estonia have been reregistered, thus a lot of work lies still ahead,” Brauer said. “It is clear that all domains will not be reregistered and there is no need for that. But if one wishes to preserve one’s domain, one should do it at once,” he said.

Elion is one of the several domain registry keepers.

Juhan Tere

Estonia to collect more than 100% of planned taxes in 2010

As of December 26, the Estonian state budget had collected over 1.6 billion kroons more tax income than planned for the year 2010, Äripäev.ee/LETA cites Tax and Customs Board.

The state budget tax income amounted to 63.4 billion kroons as of December 26 while the budget plan was 61.8 billion kroons.

Social tax income amounted by then to 26.5 bln kroons or 98.2% of the budget plan.

Private individuals income tax collection amounted to 3.1 bln kroons, 96.8% of the plan, corporate income tax collected amounted to 3 bln kroons, 125% of the plan.

VAT collection was at 19.6 bln kroons, 103% of the plan and excise taxes at 10.4 bln, 109% of the plan.

Juhan Tere

So long, Estonian kroon

Farewell, then, Estonian kroon. Born: Jun. 20, 1992. Passed away: Dec. 31, 2010.

With the new year, Estonia becomes the 17th country to adopt the euro. An inauspicious move, some including Paul Krugman and Nouriel Roubini say. This point of view, some argue, has been reinforced by the turmoil in the euro zone over the past year. Such critics say that far from joining the euro, the country should devalue.

For its entire life, the kroon has been pegged in a currency board-type arrangement to the German mark and then to the euro. (In its earlier incarnation, from 1928 until the Soviet invasion in 1940, it was linked first to gold and then to the British pound.)

In 1992, the year the kroon was (re)introduced and the ruble abandoned, inflation was 1,076.5%. (The central bank in Moscow was printing money to fund the government.) A currency peg helped subdue inflation though it later helped to foster a bubble and financial crisis.

What now for Estonia? Here in his obituary for the currency, Fredrik Erixon of the Brussels-based European Centre for International Political Economy argues it’s mostly good.

Huge queues at Estonian banks ahead of euro switch

TALLINN - Huge queues formed outside Estonian banks on Thursday, with many people wrongly worried they will no longer be able to use the kroon currency after the Baltic country switches to the euro on January 1.

"I have been in line for slightly over half an hour and will probably have to wait for an hour more. I want to exchange my savings, slightly over 45,000 kroons (2,876 euros, $3,804) into euros," Vladimir, a 63-year-old Tallinn resident, told AFP while waiting in line at a SEB bank office in central Tallinn Thursday.

"I'll feel better when I have euros now and I want the money in cash because I don't trust banks," he said.

"Anything can happen, maybe the rate of kroon to euro will be changed later," 59-year old Maret, standing in the same queue, told AFP.

Estonia's kroon was pegged to the newborn euro in 2002 at a rate of 15.6466 to one euro and the rate has never changed and authorities have vowed it never will.

Estonia, an ex-Soviet republic of 1.3 million people which joined the European Union in 2004, will formally join the eurozone on Saturday as the world rings in the New Year.

A bank official said Thursday the queues indicated people were misinformed about the nuts and bolts of the currency switch.

"It seems that many people have failed to understand that they can still pay with kroons during first two weeks of January and after that they can change their kroons into euros in commercial banks" throughout 2011, Silver Vohu, spokesman to for SEB bank, told AFP.

Tiiu Kuik : Nordstrom 2010 Lingerie Catalog

She has walked the runways for more than 50 designers. She is noted and recognized for her mole on her left cheek. She is seen here in Nordstrom 2010 Lingerie Catalog photoshoot. She is by far a household name. At least her face and body are seen everywhere

Savisaar defiant in response to criticism from Ilves

Edgar Savisaar has accused President Toomas Hendrik Ilves of interfering in the internal workings of the Centre Party.

"If a president says already before the elections who will rule and who will not, there is no point in elections," the embattled party head was quoted as saying on postimees.ee on December 28. "This is not democracy by any standard."

Ilves said in his year's-end interview on ETV that the Centre Party must condemn the attempt to secure funding from Russia and scour its ranks of those involved. 

 

Savisaar also responded to Ilves's criticism of the use of funds for construction of a Russian Orthodox church in Estonia by bringing up the matter of another church. 

 

"The pioneer and champion in using a church in a political campaign is undoubtedly Andrus Ansip with the renovation of St. John's Church in Tartu for German funds."

 

Centre Party faction chairperson Kadri Simson said on ETV that the president was buying support for his re-election from prime minister Ansip's camp.

Savisaar, the one and only

Estonia’s freedom from the Soviet Union came with the so-called Singing Revolution. It has been said that we sung ourselves free. One of the most memorable songs from that period is "Koit" (The Dawn), dating from 1988. A one-time poll by a number of radio stations resulted in it being named Estonia’s most influential song of the 20th century.

The Manichean worldview of the liberation era perceived Soviet rule as darkness, and the Republic of Estonia as light. The transition from one to another was dawn. This is the hour in fairy tales and oeuvres of popular culture when the night’s specters and vampires vanish into thin air.

When we demonized midnight, we forgot the fact that our ancestors also regarded the transition from the night to the day, the time that wasn’t night but not yet day either, as a dangerous hour. In the Nordic regions it was also called "the hour of the wolf." It was a time when wolves prowled, when sleepless men were ridden by nightmares, and one could meet strange beings, partly from this world, and partly from the next.

The Hour of the Werewolf

Nowadays, with the wolf’s image much improved and hunting them frowned upon in the EU, we might do better to call the dawn the hour of the werewolf. The transition from totalitarianism to democracy that started in Eastern Europe 20 years ago is just that – the hour of the werewolf.

A good example of a transition politician is Edgar Savisaar. He is an intriguing person in the East European post-communist gallery if only because he has managed to stay in the political arena. Savisaar was chairman of the Popular Front in the late 80s, now he is chairman of the Centre Party, one of the largest political parties in Estonia. He has been prime minister, economics minister, interior minister and mayor of Tallinn.

Bomb scare in Tallinn's intercity bus station

On the evening of December 28, a briefcase left in the boarding area of the intercity bus station triggered a bomb alert.

According to Rescue Board press representative Reimo Raja, the authorities received a call at 17:49 concerning a suspicious briefcase on a bus boarding platform, Postimees wrote.

The bomb squad arriving on the spot discovered that the briefcase did not contain any explosives. According to the intercity bus information desk, departures and arrivals were not disrupted by the incident.

Tallinn's famed TV tower makes comeback in tourism

After its closure in 2007 for fire safety violations, Tallinn's TV tower will be revamped as tourist attraction with 5.5 million euros from the European Regional Development Fund.

“Since its inception, Tallinn's TV tower has been a symbol of the capital,” said Riina Roosipuu, director of the tower's managing foundation. 

The 314-meter tower, Estonia's tallest structure, is planning to reopen after extensive rennovations in December 2011. Surrounded by Russian tanks in 1991, the building had a central role in the climax of the country's fight for independence, when Estonian policemen threatened to release gas to kill invading soldiers attempting to gain control of the nation's broadcasting. “The TV tower catches the eye with its visual form and great size, rising above the tops of buildings in the cityscape. From its beginnings the TV tower has been a loved attraction for foreign and domestic tourists,“ said Roosipuu.

With a total budget of 6.6 million euros, the foundation has raised 1 million euros on its own, and is receiving the rest from EU funds funneled through Enterprise Estonia. Renovations will take 4.8 million euros, and the rest will go toward creating the exhibit for tourists and marketing.

Estonians are paying a high price for the euro

Euro is a massive sacrifice for Estonians which is being forced upon them by Andrus Ansip's government, says Edgar Savisaar, Mayor of Tallinn and leader of the main opposition party in an interview to German publication Zeit Online.

Speaking of Estonia's economy, Savisaar said that Estonia has lost its position as a low-cost production base to China and provided the recent bankruptcy of Kreenholm textile industry, as an example. He added that Estonian state should guide the country's economy like China.

However, in the opinion of Savisaar, it is difficult to revive the Estonian economy since most of its businesses are foreign-owned and profits are pouring out of the country.

"VAT rate raise, increase of consumption taxes and budget cuts have weakened Estonia's economy and affected the people's financial situation," said Savisaar.

"I think that sacrifices that Estonian people have been forced to make without their consent have been too big and Estonia is rushing to the eurozone. Compare it, for instance, with Poland that has been less affected by the crisis and is adopted a wait-and-see approach towards the eurozone," said Savisaar.

Belarusian vodka netted in major bootleg liquor busts

Tax and Customs Board officials found over 6,800 bottles of contraband liquor in searches of possible storage sites in three counties last week.

The largest quantity of illegal alcohol was found at the home of a resident of a town in Pärnu County with prior convictions, with quantities also found in a Viljandi County sawmill and in the home and vehicles of a Harju County resident.

A total of 3,580 half-litre bottles of Belarusian Minskaya Kristall vodka that lacked tax stamps was found, along with 25 bottles of Belaya Beryoza made by the same distillery. A number of bottles of stampless Russian vodka labeled Nasha Rasa and 3,211 bottles of wine, most of it Austrian, was also found.

 

Other, counterfeited merchandise was also seized. One arrest was made. 

 

The Belarusian brands mark a new trend, according to officials, while the Russian vodka is already familiar to customs officials. The revenue forgone from these violations was about 13,000 euros.

Why fiscally prudent Estonia wants to join the troubled euro ...

It takes only a brief visit to the Bank of Estonia’s small basement museum to grasp what turbulent decades the Baltic states have endured. This corner of Europe’s “bloodlands” between Russia and Germany saw a bewildering succession of currencies: roubles (tsarist and Soviet), marks (imperial and Nazi) and, among these, a cherished era of Estonian money, from 1919 to 1940. After the break-up of the Soviet Union, the kroon was restored in 1992, a symbol of independence regained.

Now the kroon, too, is destined to become a museum piece, though this time its abolition is voluntary. On January 1st Estonia adopts the euro, with mixed emotions among the numismatists in the museum shop. Most Estonians accept the government’s view that giving up the kroon will strengthen Estonia economically and politically. Pegged from the outset to the D-mark and then the euro, the kroon has hardly been independent. Abandoning it, say ministers, will end speculation about devaluation, reduce transaction costs, lower interest rates and boost investment.

To many Estonians, the euro also means security. For this small country of just 1.3m people, the single currency is a further step towards “Europe” and away from Russia. With its membership of NATO, the EU, the Schengen free-movement zone and now the euro, Estonia thinks of itself as one of the most integrated countries in Europe. As for the euro zone, Estonia’s accession is a demonstration of faith in the single currency. Many doubt its future after a torrid year of sovereign-debt crises and bail-outs.

Beyond the symbolism, Estonia’s economic experience in the past decade offers some lessons for troubled euro-area countries. First, even a small, poor, post-Soviet state in demographic decline can survive, indeed thrive, in a de-facto currency union with mighty Germany. Second, bold austerity measures can restore public finances even after a deep recession. Having shrunk by nearly 14% in 2009, the economy has rebounded and is forecast to grow by 4.4% in 2011. The newest and poorest member of the euro zone will have its smallest public-debt ratio: 8% of GDP.