Estonian Review 20 - 30 December 2010

FOREIGN NEWS
DOMESTIC NEWS
DEFENCE NEWS
ECONOMIC NEWS

FOREIGN NEWS

Estonian, British Foreign Ministers Discuss Goals in Afghanistan

20 December - At their meeting today in London, Foreign Minister Urmas Paet and Foreign Minister of Great Britain William Hague recognised the co-operation of Estonian and British soldiers and civil experts in Afghanistan. Foreign Minister Paet stated that Estonian and British soldiers work together in Helmand Province in southern Afghanistan and their co-operation goes smoothly. “The goal of the international community is to transfer responsibility for security to the Afghan authorities by 2014, but the most important thing is that Afghanistan no longer poses a threat to the rest of the world, primarily in terms of terrorism,” said Paet. “This is the main requirement that must be fulfilled so that the international forces, including those of Britain and Estonia, can leave Afghanistan,” he added. Paet stated that we must contribute more than before to the reconstruction of the Afghan state so that Afghanistan could develop the capability to support the development of its own nation. “Estonia has sent eight experts to the NATO and European Union police training missions, and our health care expert in Helmand is continuing his work as well,” said Paet.
Foreign Minister Paet and Foreign Minister Hague also discussed co-operation in NATO and the EU. Paet invited Great Britain to participate in the air policing mission over Estonia, Latvia and Lithuania. “We would like to extend the Baltic air policing mission until 2018, and Great Britain’s participation is welcomed,” said Paet. Paet also invited Great Britain to participate in the work of the NATO Cyber Defence Centre in Tallinn.
Paet and Hague discussed getting out of the international financial crisis. “We agree that international organisations must draw their own conclusions and limit expenditures. One can’t hope for large budgetary growth if the economy hasn’t recovered from the crisis,” said Paet.
The foreign ministers also addressed NATO and the EU’s relations with Russia as well as NATO and EU enlargement. Paet invited British Foreign Minister Hague to visit Estonia in the near future.

Estonia Joins Euro Zone on 1 January

30 December - Starting from 1 January 2011 the euro will come into effect as currency in Estonia. During 2010 Estonia successfully fulfilled all the Maastricht criteria, which are required to join the euro zone. Estonia will be the 17th country and the first Baltic state to join the monetary union.
Joining the euro area and transition to the single currency will hedge the risk of adverse exchange rate movements. A stable monetary environment, in turn, promotes fast economic growth. At the same time, accession to the euro area will entail the obligation for Estonia to follow a balanced economic policy in the future as well.
Estonia's accession to the Economic and Monetary Union is the best and most reliable way of ensuring the stability and low inflation level of the currency in circulation.
From 1 January 2011, ATMs will issue 5-, 10- and 50-euro banknotes. All deposits in Estonian kroons will change over to euro deposits (only the payment unit will change).
It will be possible to use both euros and kroons in making cash payments until 14 January 2011.
After 15 January 2011, the only official means of payment in Estonia will be euro.

Agreement Between Estonia and Jersey Signed

21 December - Today in London Foreign Minister Urmas Paet and Deputy Chief Minister and Treasury and Resources Minister of the Bailiwick of Jersey Philip Ozouf signed agreements for the avoidance of double taxation and the prevention of tax evasion between Estonia and Jersey.
“The economy of the island of Jersey, which belongs to the European trade area, is primarily based on financial services, tourism, e-trade and agriculture. The agreement for the avoidance of double taxation increases co-operation opportunities between the businesses of Estonia and Jersey,” said Paet. “Another important aspect of the signing of the agreement is that it gives us an opportunity to exchange tax-related information,” he added.
The goal of an agreement against double taxation is to facilitate investments, ensure the equal treatment of individuals, and do away with double taxation, which can occur as the combined effect of the laws of two nations. Agreements for the avoidance of double taxation are concluded primarily to share the tax proceeds between the two nations and so that citizens do not need to pay the same tax in two countries. The agreement also helps to create additional opportunities for preventing tax fraud.
Today Foreign Minister Urmas Paet also congratulated the long-time secretary of the London Estonian House and current board member Tiit Reigo on his 100th birthday. Tiit Reigo received the Order of the White Star V Class from the president in 2001 as a state official and preserver of Estonian culture in London.

Switzerland to Issue Visas for Estonia in Palestine

23 December - Starting in 2011, Switzerland will be representing Estonia in Ramallah for the issuing of Schengen visas in the areas of the Palestinian Authority.
Foreign Minister Urmas Paet stated that these kinds of agreement make it easier for people to visit Estonia. “Our goal is that Estonia would be represented as broadly as possible all over the world,” said Foreign Minister Paet. “We also want for the visa application process to be more client-friendly and less complicated,” Paet added.
Estonia has concluded representation agreements for the issuing of Schengen visas with Austria, Spain, the Netherlands, Lithuania, Latvia, Poland, France, Germany, Finland, Slovenia, Denmark, Hungary and Switzerland.
Applications for short-term visas, transit visas, and airport transit visas can be submitted to the representations of countries representing Estonia. To apply for a long-tern visa it is still necessary to go to the nearest Estonian representation.

Scandinavian-Polish Chamber of Commerce Opened to Estonian Entrepreneurs

21 December - The Scandinavian-Polish Chamber of Commerce (SPCC) active in Poland decided to extend its co-operation to Estonian entrepreneurs. Now it will be possible for Estonian entrepreneurs who are active in Poland or who would like to enter the Polish market to officially join the organisation that brings together Scandinavian companies and to have access to all the services that are offered to chamber members.
Estonian Ambassador to Poland Taavi Toom said that the decision of the Scandinavian-Polish Chamber of Commerce is good news for Estonian businessmen interested in the Polish market. “The SPCC is a natural partner for Estonian entrepreneurs and a place for them to exchange relevant information and experiences in Poland,” said the ambassador. The Estonian Embassy in Warsaw also became an honorary member of the Scandinavian-Polish Chamber of Commerce.
The Scandinavian-Polish Chamber of Commerce is a business organisation that unites over 340 Swedish, Finnish, Norwegian and Danish companies that are active in Poland. The goals of the SPCC, which was created in 2004 when the business organisations of the four Scandinavian countries united, is to advise its members, stimulate the business development process, mediate experiences between businesses, and promote Scandinavian-Polish business contacts in general. In terms of membership the SPCC is the third-largest bilateral business organisation in Poland. In addition to Warsaw, it has regional offices in the Gdansk region, Krakow, Poznan, Vratislav, and Szczecin.
According to data from the first nine months of 2010, Poland ranked as Estonia’s 7th foreign trade partner and trade with Poland made up 4.2% of Estonia’s total foreign trade (543 million EUR – exports 102 million EUR and imports 434 million EUR). Estonian export to Poland has risen 23% in comparison with the same period last year, and Polish imports to Estonia have grown by 48%.
More information on the Scandinavian-Polish Chamber of Commerce is available from the Estonian Embassy in Warsaw (tel: +48 22 88 11 810, e-mail: embassy@estemb.pl) or directly from the SPCC (http://www.spcc.pl).

DOMESTIC NEWS

Ilves: Success of Kroon Allowed Us To Set Bold New Goals

21 December - President Toomas Hendrik Ilves recognised Estonia's since it regained independence and emphasised the importance of having our own currency for the restructuring of the economy at the conference “Homage to the Estonian kroon: How to measure Estonia's success”. “Today, we should all remember the men and women who had the courage to do things differently and who gave us our very own Estonian kroon eighteen and a half years ago,” President Ilves said.
According to the head of state, the Estonian kroon introduced strict discipline to our economy and budget policies in 1992 and became one of the foundations of Estonia’s subsequent success story. “The introduction of the euro within the next ten days will not change these values. A strong euro, reliable economy, and the welfare of the Estonian people will only be possible as long as we can adopt reasonable decisions,” President Ilves told.
The head of state acknowledged that the Estonian kroon also has an emotional dimension for people in addition to its monetary value: “We are all attached to the Estonian kroon. First of all, it looks beautiful. Secondly, we have grown accustomed to it. And thirdly, for many the kroon is a sign that we are a state. This is why the disappearance of the kroon as a currency may cause conflicting emotions in many. Sadness included.”
According to the head of state, Estonia is the embodiment of the fiscal policy values that should serve as the foundation of a strong euro. Estonia has remained true to these principles for 18 years.
“This is why very little and very much is waiting for us on the night of 1 January. The appearance of our money is about to change. On the other hand, Estonia's international status will improve, both in our own eyes and, above all, in the eyes of our foreign partners,” the head of state stated.
“The current development of Estonia allows us to set new goals and, more importantly, to remain bold and innovative. The coming of the euro does not mean that Estonia should become a boring European country,” President Ilves said, in defining the main challenge that Estonia is now facing: how to increase the productivity of the economy while increasing employment.

Estonian Company Makes First Prototype Sheets of e-Paper

22 December (BNS) - The Estonian company Visitret Displays OU has produced in lab the first sheets of electronic paper that are flexible, without size limitations, and capable of displaying moving images, the daily Eesti Päevaleht reports. "The e-paper created by Estonians is perfectly flexible, made of silicone and extremely thin," the paper describes.
The core technology of twist-ball displays was invented by Jüri Liiv, Tartu University doctoral student in chemistry and currently head of technology at Visitret Displays.
The company believes it will take two to three years for the first devices based on this technology to come on the market.
According to the company's calculations, an A4 sheet of Visitret's e-paper could cost 10 euros.
Visitret Displays was founded by Liiv and a British capital-based investment company. The firm has seven partners at present. It has received support from Enterprise Estonia.

Snow Cover Thickness Hits New Records Across Estonia

27 December (BNS) - After the snowstorm that hit Estonia during Christmas new snow cover thickness records for the month of December were measured in many parts of the country.
According to data of the Estonian Institute of Meteorology and Hydrology, the thickness of the snow cover in the capital city Tallinn was 45 centimeters on Monday morning, which tops by two centimeters the all-time high of 43 centimeters recorded on 31 December last year.
The south-western port city of Pärnu was under a 53-centimeter cover of snow. The previous record of 33 centimeters goes back to 8 December 1988.
In the north-eastern town of Jõhvi the thickness of the snow cover was 58 centimeters on Sunday morning compared to 49 centimeters measured on 15 December 1965.
The snow cover in the town of Viljandi in central Estonia was likewise 58 centimeters thick on Monday morning. The previous high of 47 centimeters was recorded on 28 December 1988.
Väike-Maarja, a small town in north-central Estonia, boasted a snow cover of 63 centimeters on Sunday morning. On 17 December 1965 the town was swamped with 55 centimeters of snow.
The all-time record of snow cover thickness in Estonia, 97 centimeters, was measured at Pagari in the Virumaa region in March 1924.

DEFENCE NEWS

Government Approved New Host Nation Support Concept

23 December - The Estonian Government approved the new Host Nation Support (HNS) concept that lays down the actions of Estonian state authorities for planning and organising the arrival of allied forces in Estonia.
The concept gives guidelines to state authorities for planning and executing Host Nation Support during peacetime, crisis or war. The concept explains the substance of Host Nation Support and points out the principles that must be followed upon planning and execution of HNS. The concept also gives an overview of the general HNS planning cycle and of the obligations of the Host Nation’s Steering Committee, NATO force commander, and countries deploying the forces.
The concept also lays down the tasks of the Ministry of Defence, Defence Forces, Ministry of Internal Affairs, Ministry of Economic Affairs and Communications, Ministry of Social Affairs, Ministry of Foreign Affairs, and Ministry of Finance regarding the planning and execution of HNS.
The concept also concerns the implementation of the Host Nation Support and the authority of the defence minister upon planning and executing HNS during peacetime.
According to Defence Minister Jaak Aaviksoo, the national defence of Estonia is based equally on the development of initial defence capability and on the collective defence of NATO. “Estonia’s capability of ensuring HNS for allied forces arriving to Estonia is an important part of initiating collective defence. Compared to the previous basic document, the new HNS concept is more up to date, more flexible, and takes into account the developments in Estonia’s national defence and internal security system during the last seven years,” said Defence Minister Aaviksoo.
The previous HNS concept of Estonia dating form 2003 focused too much on the obligations and tasks of the Allies and not describing clearly enough the actions and responsibilities of Estonian authorities. The new concept was developed by a Ministry of Defence working group along with representatives of all the key ministries. The new concept was also based on experience gained during joint Baltic-US staff exercises “Baltic Host 2009” and “Baltic Host 2010”.

ECONOMIC NEWS

Fast Growth in Export, Import Continues in November

28 December (BNS) - The Estonian Ministry for Economic Affairs and Communications said that similar to previous months, the fast growth in export and import on year continued in November but the basis of comparison was already higher than last October.
One fifth of companies interviewed by the Estonian Institute of Economic Research (EKI) expected bigger than usual export orders.
In October the indicator was 25%, while 57% of industrial companies said that their orders had remained at the usual level.
The number of companies who forecast that their export orders remained under the usual level climbed to 23% in November; in October the percentage of such companies was 18.
Merike Riipinen, chief specialist of economic analysis at the ministry, said that if the economic confidence index fell slightly in November, then the same index of the main trade partners,
Finland, Sweden, Latvia and Lithuania increased. "This is a sign of security that strong demand for Estonian goods in the neighbouring market will continue."
Riiponen said that due to the rapid growth in export and import prices, export grew by 35% and import by 25% on year in October.
According to Statistics Estonia the export of goods grew by 47% in current prices in October compared with the same month last year and import by 38%; export into Sweden increased 2.2-fold mainly due to the export of electrical machines and appliances.
In October 2010 goods to the tune of 13.1 billion kroons (EUR 840 mln) in current prices were exported from Estonia and goods to the sum total of 13.3 billion kroons or 850 million euros were imported into Estonia. The foreign trade shortfall was 0.2 billion kroons, or 10 million euros.

Estlink Cable Has Been Used Only for Export Since November

20 December (BNS) - According to Eesti Energia, the Estonian-Finnish Estlink sea cable has only been used for the export of electricity from Estonia to Finland since 14 November.
Last week 61.3 gigawatt-hours (GWh) of electricity was exported from Estonia to Finland, which means that the export was at an average capacity of 365 MW. This is the biggest flow of electricity through the Estlink Cable in the history of the stock exchange, Eesti Energia said.
Last week the average exchange price of electricity in the Estonian price area fell 17% to 46.4 euros per MWh. At the same time there was a 17% rise in Finland and the average price was 102.8 euros. In Lithuania the average price was 43.3 euros, falling 11% during the week.
The main reason of the higher prices was the higher price levels in the Nordic countries, which are influenced mainly by cold and dry weather. In the Baltic countries electricity prices are kept lower by electricity import, Eesti Energia said.
Presuming that the export of electricity took place with the average price of the Finnish market, the monetary value of the export through the Estlink cable was nearly 100 million kroons (EUR 6.4 mln). Some of the electricity generated in Estonia is now exported southward.

Estonian Air to Receive New Planes in January

21 December (BNS) - The national carrier Estonian Air expects to receive two new Bombardier CRJ900 NextGen aircraft at the end of January 2011.
The exact dates will be given at the beginning of next year, spokeswoman Ilona Eskelinen told BNS.
According to earlier information, the first new plane should be put into operation in the first half of February at the latest. The third aircraft will start service in 2012.
Estonian Air has a contract with the Canadian manufacturer Bombardier for the purchase of three CRJ900 NextGen aircraft for 123 million U.S. dollars.
In addition to the three Bombardier planes to be put into operation in 2011 and 2012, the carrier has an option for the purchase of two more aircraft. Estonian Air CEO Andrus Aljas has earlier said that exercising the option depends on the aviation market developments in the coming years.

Ericsson Increases Production Volumes in Estonia This Year

29 December (BNS) - Ericsson Eesti, which launched production of 4G data communication support stations at its Tallinn facility in May, has increased production volumes and is planning growth also for next year. "Growth in the volume of the stations has been an aim and this has taken place as planned," Veiko Sepp, board chairman of Ericsson Eesti, told BNS. "It depends first and foremost on our clients' orders, but demand for broadband equipment is high and this allows us to look optimistically into the future. We have certainly given our contribution to the growth of Estonian export," Sepp said. The company doesn't wish to disclose the accurate production volume figures.
Ericsson launched production of 4G data communication network equipment in May and achieved full capacity in August. Ericsson took over the former Elcoteq facility in Tallinn in summer 2009.
Ericsson Eesti exports a large proportion of the 4G equipment, but some of it remains also on the local market.
According to Statistics Estonia information, export of goods from Estonia grew 47% in current prices compared with the same month last year. Export into Sweden grew 2.2-fold, mainly thanks to the export of electrical machines and installations.

Ryanair to Start Flights From Estonian Capital to Barcelona, Bremen

23 December (BNS) - The no-frills airline Ryanair announced on Thursday two new routes from the Estonian capital Tallinn, in addition to previous destinations the carrier will launch flights to Barcelona (Girona), Spain and Bremen, Germany.
Tallinn-Barcelona flights are scheduled to begin on 28 March 2011. Twice weekly flights will take place on Mondays and Fridays. Flights between Tallinn and Bremen will be launched on 1 March on Tuesdays and Fridays, and from 27 March on Tuesdays, Thursdays and Saturdays.
The sale of tickets to both destinations will begin on 24 December.
In mid-December Ryanair launched flights from Tallinn to Dusseldorf, Stockholm, Oslo, Dublin and Milan. Flights to London and Edinburgh are set to begin on 10 January and flights to the East Midlands airport in the UK on 28 March.
Ryanair has a base in all the above-mentioned destinations.