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Estonian Review: 21-27 May, 2008

30.05.2008

FOREIGN NEWS
DEFENCE NEWS
DOMESTIC NEWS
ECONOMIC NEWS



FOREIGN NEWS

Estonian, Swedish Foreign Ministers Underline Importance of EU's support to Georgia

May 21
- Foreign ministers of Estonia and Sweden confirmed after a meeting in Stockholm that they consider the European Union's support to Georgia very important.
The ministers stressed the need to conclude EU-Georgia visa facilitation and free trade agreements.
"It would be to Georgia an additional clear sign of the European Union's support," Urmas Paet, the Estonian minister, said.
"The reports of exchanges of fire in Georgia are highly worrying," Paet said. "The sovereignty and territorial integrity of Georgia must be respected and provocations are inadmissible."
Paet and his Swedish colleague Carl Bildt also talked about the post-election situation in Serbia and Kosovo. In their words, closer ties between the Balkans country and the EU could be built with the help of a pro-Europe coalition.
"The West Balkan countries also should have the opportunity to move fast towards visa freedom with the EU," Paet said.
He added that Estonia has contributed to the development of the West Balkans mainly by sharing its EU accession and reform experience which the Baltic state is prepared to continue. Estonia is also making a contribution to the EU's soon-to-begin civilian mission in Kosovo.
The ministers underscored that the Estonian-Swedish relations are very good and busy.
At a reception held at the embassy in Stockholm Paet handed over Estonian state decorations to Stefan Stromberg for promoting the cooperation of the two countries' police forces, Henno Kirikmae and Christofer Gyllenstierna for supporting Estonia's Euro-Atlantic integration.


Estonian Soldier Dies of Injuries Sustained in Afghanistan

May 24
- An Estonian non-commissioned officer who sustained heavy injuries in an accident in Afghanistan's southern Helmand province on the evening of May 23rd died in hospital in the night.
Sgt. Maj. Ivar Brok, 30, serving in the support unit NSE-5 of the Estonian contingent in Afghanistan, sustained life-threatening injuries in an accident that happened in the course of loading works at the Camp Bastion base, the General Staff here reports. Brok was loading equipment of the infantry platoon ESTCOY-6 onto trucks when a wheel of a Pasi armoured personnel carrier escaped and rolled on him. Such a wheel weighs several hundred kilograms.
Estonian medics gave first aid to the sergeant who was badly injured and took him to the Camp Bastion field hospital. He was airlifted from the field hospital to the higher-level military hospital in Kandahar by British medics later that evening.
Despite medics' efforts, Brok's life could not be saved.
"Losing any comrade is tough on the team, the thoughts of Estonian soldiers serving in Afghanistan are with the next of kin of Sgt. Maj. Brok," the chief of the Estonian contingent in Afghanistan Lt. Col. Alo Valdna said. "Nobody is safe from accidents. Ivar Brok was an experienced soldier, he was participating in the Afghan mission for a second time, but unfortunately he died as the result of a tragic accident while doing his duty."
Estonian troops remembered Brok with a moment of silence Saturday morning. Flags of the units stationed in Helmand are flying at half-staff.
The commander of the defence forces, Lt. Gen. Ants Laaneots, ordered the military police division of the General Staff to open an investigation to establish the circumstances of the accident.


Members of Russian Federation Council Visit Estonia

May 26
- Members of the foreign affairs and economic committees and the Estonian-Russian group in the Estonian parliament in Tallinn met with two members of the Russian Federation Council.
Boris Listov, Deputy Chairman of the foreign affairs committee in the Russian Parliament's upper house, the Federation Council, and member of the finance committee Boris Listov are on a non-official visit to Estonia at the invitation of the Reformist MP Urmas Klaas, chairman of the economic affairs committee.
The meeting focused on Estonian-Russian relations in the political, economic and cultural spheres.
Both Estonian and Russian MPs expressed the wish to overcome bottlenecks in relations between the two countries and to work for closer direct contacts between the parliaments as well as the governments.
The deputy chairman of the foreign affairs committee recalled that delegations of the two countries' parliaments met at the invitation of the foreign affairs committee of the Federation Council in 2006 in Pskov.
Eesmaa proposed continuation of contacts between the foreign affairs committees already in the coming fall by a visit of a delegation of the foreign affairs committee of the Federation Council to Estonia.
In the economic affairs committee the talk focused on long queues at the Estonian-Russian border, construction of a new bridge across the border river of Narva, opening of a logistics centre and of launching air traffic between Tallinn and St Petersburg.
Klaas proposed the organization of an Estonian-Russian economic forum under the direction of both the countries' economic affairs committees.
Meeting with the Estonian-Russian parliamentary group issues pertaining to cultural exchange were touched upon. Peeter Tulviste, chairman of the group from the Pro Patria and Res Publica Union underlined the need to open both the countries archives for historians.


Estonia Joins Kosovo International Steering Group

May 23
- Estonia, on May 23rd became a member of the International Steering Group (ISG) on Kosovo, a body aimed at promoting the democratic development of Kosovo and the establishment of a multi-ethnic state of rule of law, the Estonian Foreign Ministry said.
In the words of Estonian Foreign Minister Urmas Paet, Kosovo needs all-round international support and help to build up the state.
He said that in order for the exhilaration of independence not to turn into anger and dissatisfaction arising from economic and administrative worries, Kosovo needs to put emphasis on the solving of economic and social problems.
"Estonia is ready to help Kosovo in solving the challenges that stand in front of it," said Paet.
He added that Estonia was sending seven experts to Kosovo as part of EULEX, the European Union's mission of rule of law.
The creation of an International Steering Group has been set out in the plan of Martti Ahtisaari, former president of Finland, for the regulation of the issue of Kosovo.
Under the plan, the members of ISG will appoint a common civilian representative to Kosovo. At the same time the EU Council will appoint a special representative to Kosovo. In accordance with Ahtisaari's proposals these roles are performed by one and the same person, currently Peter Feith of the Netherlands.
The powers of the common civilian representative will last until ISG finds that the plan of Ahtisaari has been carried out.
In addition to Estonia also Bulgaria, Ireland, Latvia, Luxembourg, Holland and Poland joined the ISG on May 22.
Other members of the group are Austria, Belgium, the Czech Republic, Denmark, Finland, France, Germany, Hungary, Italy, Slovenia, Sweden, Switzerland, Turkey, the United Kingdom and the United States.


Iceland Considering Participation in Estonian Cyber Defence Centre

May 22
- Iceland is considering participation in the NATO centre of excellence for cyber defence established last week in Estonia but has made no firm decisions yet.
The visiting foreign minister of the island state, Ingibjorg Solrun Gisladottir, said that she cannot say anything definite about her country's participation in the centre as no decisions have been made.
“Iceland plans to send some experts to Estonia to find out more about the cyber defence centre and will then make up its mind whether and how to participate in its work,” she said.
“It is admirable how Estonia has managed to turn the threat of cyber attacks into an instrument to improve its capability and become the host country of the NATO centre,” Gisladottir said.
Commanders of seven countries' armed forces signed last week in Brussels a cooperation agreement to set up the NATO centre of excellence for cyber defence in Estonia. The founders are Estonia, Germany, Italy, Latvia, Lithuania, Slovakia and Spain.
Gisladottir and her Estonian counterpart, Urmas Paet, also spoke about airspace patrolling.
Paet said at the joint news conference that Estonia and Iceland are in a similar position regarding airspace policing: neither of the small countries have an air force of its own, so both rely on NATO assistance to protect their skies.
In his words, the two countries can cooperate in airspace security above all by looking for common solutions within NATO, a view with which the Icelandic minister agreed.
According to Gisladottir, Iceland's and Estonia's situation differs in that Iceland lies in the far north and does not have Russia for neighbour. She observed that Iceland lacks an army and the tradition of own armed forces has not developed in the island state.
"This is surely one of the reasons why Iceland placed at the top of the Global Peace Index released a few days ago as the world's most peaceful country," Gisladottir said.


Estonian Ambassador to Canada Presents Credentials

May 21
- Ambassador of the Republic of Estonia to Canada Väino Reinart presented his credentials to Governor General of Canada Michaëlle Jean on Wednesday, 21 May.
In the discussion following the credential presenting ceremony, Reinart and Jean discussed the state of Estonia-Canada bilateral relations, including opportunities for co-operation within international organisations, as well as European Union-Canada relations.
Governor General Jean and Ambassador Reinart acknowledged that Estonia-Canada relations have been good throughout history. Over the years, Canada became home for many Estonians that were forced to leave Estonia following World War II. Canada and Estonia participate in many joint international operations, including in the southern part of Afghanistan.
Ambassador Väino Reinart was born on 28 December 1962 in Kuressaare. He graduated from the control engineering department of Tallinn University of Technology, was a post-graduate student of physics in the Estonian Academy of Sciences' Chemical and Biological Physics Institute, and completed the arms control and security policy course at the Geneva Graduate Institute of International Studies. Reinart has worked at the Estonian Foreign Ministry since 1992, serving as the Estonian delegation leader for negotiations with Russia, director of the political department, and the permanent representative of Estonia to the Organisation for Security and Co-operation in Europe (OSCE). He has also been the director general of the political department of the Foreign Ministry and the undersecretary for political affairs. Väino Reinart has been the Estonian Ambassador to the United States and Mexico since August 2007. Before assuming his position in Washington, Reinart was Estonia's ambassador to the European Union
Ambassador Väino Reinart resides in Washington, DC. The Estonian Embassy in Ottawa is directed by temporary charge d'affaires Rasmus Lumi.


Sweden's New Envoy to Estonia Jan Palmstierna

May 22
- The Swedish government appointed Jan Palmstierna ambassador to Estonia to succeed the incumbent Dag Hartelius in the fall.
Palmstierna's present job is that of chief coordinator of trade and investment at the Foreign Ministry, a spokesperson for the government said.
He has previously served as ambassador to Vilnius and worked at Swedish embassies in Bonn, Copenhagen and Santiago de Chile, the trade and East Europe departments of the Foreign Ministry, and the parliamentary foreign affairs committee.
Hartelius took office as ambassador to Estonia in August 2003.


Estonian Air to Start Flying to Stockholm Five Times a Day

May 26
- Due to the Scandinavian carrier SAS' recent decision to end flights between Stockholm and Tallinn, Estonian Air plans to increase to up to five the number of daily flights between the two cities.
The number of flights will rise at the end of August when business travel picks up again. At present the national carrier is flying from Tallinn to Stockholm up to four times a day, depending on the day of week, and besides there are two weekly flights between Kuressaare, the capital of the island of Saaremaa, and Stockholm.



DEFENCE NEWS

Estonia Not Conscripting Young Men from Abroad

May 23
- Estonia is not calling up its citizens living permanently in other countries to pass compulsory service in the Estonian military, as being a resident is one of the prerequisites for conscription.
Peep Tambets, deputy chief of the Defence Resources Board, said that one of the reasons for this was that conscripts had to undergo medical examination.
Since Estonian citizens have no obligation to provide the state with data about their place of residence, defence authorities have no precise data as to how many young men living abroad actually have passed conscript service in the Estonian military.
Tambets said that, by way of example, a young man living in Argentina came to serve in the Estonian military at the beginning of this decade.
Of Russian citizens living Estonia, only a few have gone to serve in the Russian military during the period after Estonia regained its independence. Spokespeople for the security police said there were fewer than five such individuals.
Ivan Bobryashev, chief of the border service of the Russian Federal Security Service in Pskov, has meanwhile said that persons with dual Russian and Estonian citizenship living in the Pechory region of Russia are posing a threat to Russia's territorial integrity. He said that more than 10,000 people in the Pechory region had both Russian and Estonian citizenship at this point.
Estonian MP Inara Luigas, who heads the support group for Pechory region in the Estonian parliament, sees the estimate as far-fetched. In her words there are about a couple of thousand people with Estonian citizenship living in the Pechory region.
The Pechory area was part of the Republic of Estonia before World War II and its residents who are descendants of citizens of Estonia from the time are entitled to Estonian citizenship by birth.
Bobryashev said that conscripts from the Pechory region who preferred to serve in the military of a NATO member state had become a serious problem.
"Young men of conscription age are making attempts to pass, and are actually passing, conscript service in the armed forces of NATO member Estonia in order to evade our military service," he said, adding that in NATO forces conscript service lasted eight months, compared with one year in Russia.



DOMESTIC NEWS

Estonian Rescue Service, Volunteers Bring Forest Fire under Control

May 26
- On the night of May 25th, the rescue service and volunteers managed to gain control of a forest fire in Vihterpalu in north-western Estonia, which was first reported May 24th at 12.20 p.m.
Due to weeks of no rain and brisk winds the blaze quickly spread over a territory of 850 hectares but close to zero temperatures and the wind dying down during the night helped gain control over the fire.
No open flames could be noticed during a reconnaissance flight at 4 a.m. on the morning of May 26th, but thermal camera observation detected smouldering fires in the ground over a large area of the blaze.


Estonian Nationalist Removes Two Soviet Monuments in Tallinn

May 22
- A well-known Estonian nationalist ordered a crane and removed two Soviet monuments in Tallinn.
Liim first had the crane operator hoist a monument to Soviet officers who had studied at the Tallinn military school onto a truck. He then directed the crane operator to the monument of the Estonian communist Hans Poogelmann and had it also removed.
Liim transported the monuments to the History Museum in Tallinn's Maarjamagi neighbourhood. The development director of the museum, Mariann Raisma, admitted that their arrival was something of a surprise even if a museum was the right place for them.
Liim has vowed to clear all Estonia of Soviet monuments.



ECONOMIC NEWS

Currency Rates in Kroons
(Bank of Estonia)


Hansabank's Name Change to Cost EUR 10 Million

May 21
- Change of Hansabank's name into that of Swedbank over two years will cost about 10 million euros.
The investment has been very equally distributed between the three Baltic countries, Erkki Raasuke, CEO of Hansabank Group, said.
Raasuke said the preliminary budget had been drawn up in cooperation with the Swedish owners. Concrete investments are connected with the visual identity of the new name and the network of its gearing, and the group is also planning to organize numerous campaigns directed at clients while introducing the new brand.
The exact date of transition to the new brand has not been fixed yet, but legally the name change should take effect at the end of this year or the beginning of the next, Raasuke said. He said the bank's wish was to start with the new brand simultaneously in all the three countries.
Raasuke said that the name change would bring no negative consequences to the clients, only the visual identity of the bank would change and the quality of banking services would improve. The contracts signed with the clients would remain the same and no new contracts would be signed.
Raasuke said that Hansabank's present structure would not change after the name change; all the posts would remain as before.
Jan Liden, CEO of the Swedbank Group, said there would be no changes in the Swedbank logo either.
Asked what would become of Hansabank's name and trademark, Raasuke said that it would simply not be used any longer, but would certainly not be sold either.
Raasuke estimated the present Hansabank's market share in Estonia at about 50 percent in Estonia, 30 percent in Lithuania and 25 percent in Latvia.
The name change is necessary because it is not practical for the two brands to exist together, simply the timing is good at present and hopefully also the strategy is successful, CEO of Hansabank Estonia Priit Perents said in comment of the name change.
“Becoming a branch of Swedbank is possible if the legal environment fosters it. But a separate economic decision should be made to do it and the issue is not on the agenda at the moment and will not be in near future either,” Perens said.


Drop in Imports Reduces Estonia's Trade Gap in March

May 26
- Compared to March 2007, the import of goods decreased by 10 percent in March of this year and the trade deficit declined by 1.7 billion kroons to 3.3 billion kroons (EUR 210.86 mln).
The nominal value of Estonian exports in March was 10.6 billion kroons while imports totalled 13.9 billion kroons. The value of exports rose by 2 percent and imports fell by 10 percent.
In March 2007 the export of goods dropped by 3 percent and imports increased by 4 percent in comparison with the same month a year earlier. The drop in exports and rise in imports then increased the monthly trade shortfall to 4.6 billion kroons.
In the first quarter of this year the export of goods grew by 5 percent and imports fell by 4 percent compared to the same period of 2007.
The first-quarter foreign trade deficit was 9.6 billion kroons. During the same period of 2007 a trade gap of 12.6 billion kroons was recorded.
In March European Union countries accounted for 73 percent and CIS countries for 12 percent of all exports. A year earlier the respective figures were 70 percent and 12 percent.
Imports from EU countries made up 81 percent and from CIS countries 11 percent of all imports in March. EU countries accounted for 76 percent and CIS countries for 16 percent of the total in March 2007.
Both in exports and in imports machinery and equipment made up the largest commodity group in March, accounting for 22 percent of the goods flows.


New Sales by Estonian Leasing Companies Up 9%

May 26
- New sales by member companies of the Estonian Leasing Association in April were 1.9 billion kroons (EUR 121.4 mln), 8.6 percent more than in April 2007.
In previous months, new sales soared by almost 26 percent.
Members of the Estonian Leasing Association are Hansa Liising Eesti, Uhisliising, Nordea Finance Estonia, Sampo Liising and Siemens Finantseeringute OU.


Estonian Development Fund Makes First Investment in Smartpost

May 26
- The Estonian Development Fund and OU Smartpost have signed a partnership agreement under which the fund is acquiring a minority holding and making its very first investment in this company.
The fund's CEO Ott Parna said the fund acquired together with co-investors a minority stake whose size will be made known by the end of June. He did not disclose the sum invested either.
As stipulated by the Development Fund law, the fund found co-investors in the private sector.
According to Parna, Smartpost became the fund's first investment by chance but at the same time the company's profile indicates which enterprises the Development Fund considers to have good prospects in the present stage.
Smartpost is a logistics company whose aim is to speed up the delivery of goods bought from mail order companies or online. The firm serves mainly customers of mail order companies and Internet shops through a logistics network consisting of couriers and self-service automated package drop-off machines.


Estonia's Merko Builder Posts 75% Growth in Profit

May 23
- The Estonian Merko Ehitus building group earned a net profit of 154.9 million kroons (EUR 9.9 mln) in Q1 this year, 75 percent more than in the same period last year.
The sales proceeds of the company totalled 1.12 billion kroons, 10.3 percent more than in the same period in 2007.
Merko's operating profit was 177.9 million kroons in Q1, slightly more than double in the same period last year. The operating profit margin increased to 15.9 percent this year compared with last year's 8.7 percent.
Of the sales proceeds of the group Estonian operations accounted for 55.2 percent, Latvian operations 26.7 and Lithuanian operations 18.1 percent. Compared with the previous year, the company's sales proceeds in Latvia increased by 94.1 percent, in Lithuania by 19.7 percent and declined in Estonia by 10.7 percent.
A warm winter and cyclic nature of housing construction and real estate development had a favourable effect on the growth of sales proceeds.
The company also pointed out that protraction of the land swap criminal case opened in 2005, the obscurity and speculations in the press had started to inhibit economic activity of the company and damaged interests of the company and its shareholders.


Estonian Central Bank to Issue 1-Kroon Anniversary Coin

May 21
- The Bank of Estonia will issue a 1-kroon Republic of Estonia 90th anniversary coin.
The central bank will issue the coins, of which 20 million will be circulated, on June 6.
On June 20 the bank will present a 10-kroons banknote dedicated to the 20th anniversary of the Estonian currency reform.
To mark the anniversary of Estonian independence the country's central bank has this year issued also souvenir coins of platinum, gold and silver.





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