Estonian economy is as a pyramid scheme

Kattel writes in Eesti Paevaleht that it is now clear that the liberal economy and economic policy to attract foreign direct investments that has characterized the Estonian economy for the last 15 years was a short-term success. In the next five to ten years we will understand that this success has been a pyramid scheme, Kattel wrote adding that the worst today when the Estonian economy is shrinking, unemployment has doubled in a year, and public sector continues to spend, is that Estonia s leaders are incapable of analyzing the situation, learn from past mistakes and plan realistic changes. The main problem contemplated by Estonian ruling politicians is whether to accept the blame for the current crisis or keep blaming the worldwide financial crisis? Politically, the right answer, of course, is to blame the world crisis.

IMF says Estonia does not need loan

The most important aim at present is to achieve economies in budgetary expenditures, said Franciszek Rozwadowski, head of the IMF group which visited Estonia, at a press conference at the end of his trip. The most important aim at present is to achieve economies in budgetary expenditures, he said. There are no immediate liquidity threats, but the fiscal deficit is unsustainable over the longer term, he said. I expect them to go on for two to three years without the need to resort to external financing. The IMF forecasts the Estonian national budget deficit to surpass 3 per cent of gross domestic product in 2009. At the same time, the current recession should give way to a return to economic growth by 2010, the agency reported. At the same press conference, the Estonian central bank released its own assessment of the current state of the national economy, which tallied with the IMF view.

Unemployment rate in Estonia may reach 18 percent

Vahur Kraft, former president of central bank and current member of Confederation of Employers, said this week that unemployment in Estonia may climb to 18 percent. Speaking at a joint economic forum of Parliament members and executives of Confederation of Employers, Kraft said that the key was to increase productivity that is growing much slower than wages. Kraft said that if Estonia fails to speed up productivity growth, the nation may be unable to meet eurozone criteria for many years. «The trust between banks is slowly recovering, but banks still don t trust borrowers. Until there are doubts about the competitiveness of the Estonian economy, companies are unable to get new capital for investments and social problems will only deepen,» said Kraft. On November 30 the Labour Market Board had registered 26,219 unemployed, which is 89 pct more than a year before.

Estonian parliament to follow lead of Latvia

Political consensus in Latvia has moved in the right direction and hopefully this will serve as a good example to Estonian politicians as well next year, Jurgen Ligi told BNS. Latvia also has importance to us as a warning: violating budget balance over a long time costs very dear, he added. Regarding measures taken by the Latvian government, Ligi said forceful action was required to stabilize the troubled financial system, but that there probably is not enough strength for more steps in the current difficult situation. Estonia s advantage over Latvia beside the conservative budget policy, is a financial system that does not need support and the large weight of Swedish banking, the lawmaker said. Estonia s situation will no doubt deteriorate some more and an even bigger problem than our troubles is the fact that finance providers view us as a single Baltic region.

Tourists name Tallinn the most romantic town in Scandinavia and Baltics

Tallinn came first in an international tourist survey made by the Scandinavian innovation centre Norden, writes Postimees. The majority of tourists interviewed for the survey chose Tallinn as the city that most met their expectations among fourteen other cities in Scandinavia and Baltic states. By using tourism offices in cities, Norden interviewed more than 5,000 tourists who had visited Copenhagen, Århus, Malmö, Uppsala, Stockholm, Oslo, Bergen, Helsinki, Tampere, Turku, Reykjavik, Tallinn, Riga and Vilnius. 63 percent of the respondents chose Tallinn as the place to visit because of its cosy atmosphere while 65.4 percent said Tallinn was romantic. «Listen to music, walk around in the Old Town, step into some cafeteria or relax in a spa in short, enjoy,» is how one Swedish tourist put the benefits of visiting Tallinn. In terms of atmosphere, Tallinn was followed by Copenhagen and Stockholm.

Estonian government and SAS battle for national carrier

TALLINN - As the push to inject funds into floundering national carrier Estonian Air tightens, both the Estonian government and SAS have announced a desire to buy out the other s stake and become the majority shareholder. On Thursday Nov. 27 Prime Minister Andrus Ansip announced that Scandinavian Airlines (SAS) had sent a letter to the Estonian government stating that, due to Estonian Air s current liquidity crisis, a cash injection was needed imminently to ensure the airline s survival. In t. The article you requested can be accessed only by subscribing to the online version of The Baltic Times. If you are already subscribed to The Baltic Times, please log on using the form on the top of the page. If you don t have a membership yet - please subscribe.

Christmas Market in Tallinn - among the best in Europe

The UK news portal Times Online compiled a list of the best Christmas Markets in Europe where the Christmas ambience is the best and the traditional market on the Tallinn Town Hall Square was among them, writes EPL Online LETA. The Christmas Market in the Old Town of Tallinn is described as a heart-warming cosy place in the piercing Baltic winter. «There is a giant Christmas tree in the middle of the market, surrounded by more than 50 specifically designed sales stalls. Visitors can admire and purchase the works of handicraft masters from all over Estonia,» stated the overview. The Christmas Market on the Town Hall Square in Tallinn is the only one marked in the article which operates until January 7th.

Estonia sees GDP falling 3.5 pct next year

However, the ministry is banking on growth to return in 2010 with an expansion of 2.6 percent, although that is smaller than the forecast of 5.7 percent it issued in August. We expect growth to return in 2010 if export growth picks up with positive economic growth in our trade partners, the ministry said in a statement. The ministry forecast inflation next year at 4.2 percent, down from a previous outlook of 6 percent. Inflation is expected to hit 10.6 percent this year and 2.8 percent in 2010. This would bring the rate in line with EU criteria for euro adoption in 2011. But it is clear joining the euro zone won t just happen. We will have to make some tough decisions and be single minded in implementing them, Finance Minister Ivari Padar said.

Businessman: corruption stops in Estonia, helps in Ukraine

There is bureaucracy and corruption in Ukraine, but differently from Estonia, this is helpful, not stopping, businessman Urmas Sõõrumaa told Eesti Ekspress. «When you do something in Estonia, you re in everyone s way. And if you do (something edit) there, you can stay in the background. There is corruption and bureaucracy in Ukraine, but that gets things moving, not stopping, like here. Business culture there is much more defined than in Estonia,» Sõõrumaa said. His energy company BEN Energy that operates combined heat and power supply plant in Väo, plans to invest into such plants in Ukraine, Russia, Belorussia and Georgia. «There are much hydraulic resources, it s possible to buy an old hydro terminal and bring it up to date,» he noted. BEN Energy projects are small in Ukrainian means.

Estonian government opens doors to an eager public

Estonia prides itself on its open governance, frequently scoring well in international surveys for its low levels of corruption and high transparency of information. But on Wednesday, designated Citizens Day, it took things one step further by inviting the general public through the hallowed portals of government. All state ministries, plus the president s chancellery, were opened so that visitors could listen to lectures, view exhibitions, meet ministers and participate in debates. The open house day was devised to mark the fact that 90 years ago many Estonian state institutions were first established. At the Ministry of Economic Affairs and Communications, visitors heard a debate between three ministers on the future of the Estonian economy, plus lectures on energy, economic development, the domestic market and transport. At the Ministry of Defence, a lecture covered defence policy, and a photo exhibition on the Russian-Georgian war was on display.