Fitch Raises Estonia's Ratings On Euro Entry

Rating agency Fitch upgraded Estonia's credit ratings on Monday, following the European Union's formal approval for the Baltic nation's entry into the euro currency bloc in January 2011.

Fitch raised Estonia's long-term foreign and local currency issuer default ratings, or IDRs, to 'A' from 'BBB+' and 'A-', respectively with a stable outlook. They have been removed from Rating Watch Positive. At the same time, short-term foreign currency IDR has been upgraded to 'F1' from 'F2' and the country ceiling has been raised to 'AAA' from 'A+'.

"Joining the euro area improves Estonia's risk profile as it reduces risks associated with the country's sizable external debt and forex lending in the domestic banking system," Douglas Renwick, Associate Director in Fitch's Sovereigns group said. "Entry to the euro area will gives its banks access to European Central Bank's liquidity facilities and, furthermore, Estonia's sound public finances and flexible economy make the country well-suited for a currency union."

The rating agency said Estonia's long-term growth prospects are brighter than average, though the country is poorer than the existing euro area members. At the same time, Estonia's public finances are one of the strongest in the EU.

European Union finance ministers gave the final approval to Estonia to become part of the euro currency bloc from January 2011 in a meeting held in Brussels on July 13. The country, a one-time satellite of the Soviet Union and a country of 1.3 million people, will become the 17th member of the Eurozone, succeeding Slovakia that joined in 2009.

Estonia's general government deficit fell to 1.7% of GDP in 2009 and the gross debt level stood at 7.2% of GDP. The deficit in 2009 remained within the 3% set out in the Maastricht Treaty.

By RTT

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Tallinn's dark age has been banished, replaced by sweet sounds amid stunning surrounds, writes Richard Tulloch.

Sprinkled around Tallinn's Old Town are wooden carts, from which pairs of young Estonians sell packets of sugared almonds. The merchants are dressed in mediaeval-style robes and gothic lettering on the awning above them reads "Gourmet Monk". But below the hems of their garments I can see jeans, designer sneakers and Crocs and they take calls on their mobile phones. Tallinn may flog its mediaeval credentials for tourism purposes but this is a 21st-century city.

Our group arrives in Tallinn late in the afternoon, leaving time for a pre-dinner stroll into the Old Town. The sun sparkles on church spires and the turrets of the city walls, bounces off ornate weather vanes above terracotta roofs and backlights the cobblestones on the narrow streets. I haven't seen a place this pretty since I last visited Bruges, but Tallinn is far less crowded and locals have time to chat.

Silvi is a business management student. Although selling almonds to tourists brings in useful kroons, she mostly does it to practise her languages. French was her best subject at high school. It was mine, too, but I keep quiet about that. If Silvi hears my French, the reputation of Australian education will be in tatters. Her English is excellent and I bet her German and Russian are also passable.

On a temporary stage in the lovely square in front of the 14th-century town hall, a band is doing a sound check for their performance in the Old Town Days Festival, while colourful street performers draw a crowd with a display of drumming and energetic flag-waving. There's no reason to think Estonia has ever been anything but settled, prosperous, open and fun-loving.

It is only when I learn more of the region's turbulent and tragic history that I understand what an extraordinary change has come over Estonia since the break-up of the Soviet Union. In an introductory lecture organised for my Odyssey tour group, local historian Kristi tells how little Estonia (population 1.3 million) was subjugated for centuries by Danes, Swedes, Teutonic knights and Tsars, before enjoying brief independence between the world wars.

Then in came the Russians, then the Nazis and the Russians again. "Who was worse?" Kristi gives a wry smile. "You can't choose between bubonic plague and smallpox." Between them, they exterminated or deported a huge proportion of the population, including nearly all Jews and most educated, landed and business people.

Estonians were returned to serfdom. Even city girls like Kristi were sent to stack rye and cut peat on communal farms. "It was awful, hard, dirty work and nobody bothered to show us how to do it properly. So of course we did it very badly." The Soviet regime settled Russians in Estonia and they still make up 26 per cent of the population.

The next morning we learn how Estonia's independence was won in an extraordinary way. There's a hint of what is to come at breakfast in the hotel dining room. An older woman is greeted by her companions who are singing for her. We presume it's her birthday. What makes the event so electrifying for us is that the Estonians sing beautifully; lilting, accurate three-part harmony, conducted by one of the birthday girl's party, with the whole room joining in. Choral singing is Estonia's favourite pastime and it played an important part in their drive for independence.

Just out of the city centre, facing a grassy slope, stands a performance shell that can accommodate 30,000 singers on the podium, according to our guide, Rita. Michael Jackson once performed here; more recently, Madonna had the place rocking. But I wish I'd been here for the Song of Estonia Festival in 1988 when, with cracks starting to appear in the Soviet Union, a choir sang Mu isamaa on minu arm, a poem by Lydia Koidula set to music by conductor Gustav Ernesaks.

Singing this unofficial national anthem had meant a one-way ticket to Siberia since it was banned by the Soviet authorities. However, when an audience of more than 100,000 rose to its feet and joined the choir, KGB agents looked on helplessly and the independence movement became unstoppable. Ernesaks' statue now sits above the park, his chin in his hand. When the sculptor was asked why his subject was watching thoughtfully, rather than conducting, the answer was: "His work is done. Now he's on holidays."

Today, relations between resident Russians and ethnic Estonians are sometimes strained, we're told, by Russian reluctance to learn the Estonian language and the recent removal of a hated Soviet monument being among the bones of contention. Rita is quick to advise us against buying the babushka dolls we see in the window of every souvenir shop. "They are Russian, not Estonian. Russian! That yellow jewellery is not genuine Estonian produce, either; it is Latvian or Lithuanian amber."

So I buy a pretty scarf made from local linen. "We have our own factory here in Estonia," I'm told proudly.

Back in the city square, Old Town Days festivities are getting into stride. Young Russians and Estonians dance together as a folk-rock group plays electric accordion, bagpipes and trombone. Most Estonians are trying to get along with their neighbours and most are succeeding. This mediaeval festival is one of many music events held in Tallinn. The city is particularly proud of its April Jazz Festival, a genre of music that was banned during the Soviet era. There are classical and Baroque festivals as well and, naturally, those massed choral extravaganzas.

Tourists also benefit from Tallinn's new-found freedom. It seems all young Estonians speak English as confidently as Scandinavians do. The coffee and focaccias are first-rate. Prices are quoted in Estonian kroons but also in euros, which is due to be introduced next year.

In a park, I meet a Dutch couple who have been cycling between villages. "This is a great country for riding," they say, which from the Dutch is praise indeed. So to road-test their recommendation, I rent a bike for a few hours. Those photogenic cobbles are murder on the backside but within minutes I'm wheeling along on a flat, broad, car-free cycle way, the sea on my left and pine forest on my right.

On the way back, I make a short detour through lovely gardens established by Peter the Great, to the KUMU (Kunstimuuseum), "Europe's 2008 Art Museum of the Year". It's a smart, new building but most impressive is the art from Soviet times. Artistic expression was monitored strictly, of course, but Estonian artists managed to be slyly subversive while depicting heroic workers in fields and factories

At dinner time, we're returned to the Middle Ages, as Rita leads us to the Olde Hansa Restaurant. The name refers to Tallinn's past as a trade centre for prosperous Hanseatic League merchants. "Olde" in my experience generally means "Newe" and "Kitsche" but to my surprise, this is well done and very good fun. We're served by waitpersons in mediaeval costumes and entertained by minstrels playing viol, tambour and recorders. And gazooks, they're good! So, too, is my juniper cheese, almond chicken, ginger turnip and dark herb beer.

The Olde Hansa is doing a roaring trade, with crowds of young locals making merry at long tables. Estonians are proud of their past and optimistic about their future. A return to the true Dark Ages seems mercifully out of the question for them. Long may they sing.

Source: The Sun-Herald

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Estonia opens .ee domain names

Estonia's decision to deregulate the .ee Internet domain names has been met with a rush of companies and private individuals jockeying for a website.

The flood of registry requests was so great on the first day that the entire registration system crashed. It is now back online, with a new .ee website going up every two minutes.

“The objective of the new order for internet domains is to make the domains with Estonian country code more accessible than it has been thus far,” said Marek-Andres Kauts, CEO of the Estonian Internet Foundation.

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