Skype founders bought the company from eBay

A consortium of investors including Niklas Zennström and Janus Friis who founded Skype have bought back the company from eBay.

eBay sold 70% of Skype for 1.9 billion US dollars. In 2005 eBay itself paid Skype founders 2.6 billion dollars for the company.

Although eBay itself said that it did not achiveve the planned synergy for Skype, but the real reason for its agreement to sell the company back at a discount was that Zennstrom made it clear to them that it had no option but to agree to the offer since the core of the Skype software still belonged to Joltid, a company owned by Zennström and his business partner Janus Friis. In other words, eBay had only purchased a license to use the software.

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Estonian trade deficit 0.9 bEEK in September

According to Statistics Estonia, in September 2009 exports of goods from Estonia at current prices totalled 9.3 billion kroons and imports to Estonia amounted to 10.2 billion kroons. Machinery and equipment held the biggest share in exports and oil products in imports.

In September 2009, exports of goods from Estonia decreased 24% (3 billion kroons) and imports 33% (5 billion kroons) compared to the same period of the previous year. The trade deficit of Estonia amounted to 0.9 billion kroons, which was over three times less than in the same month of the previous year.

In September, machinery and equipment held the biggest share in total exports, accounting for 18% of total exports. Compared to September of the previous year, exports of machinery and equipment still declined 36%. In imports the biggest share was held by oil products that accounted for 21% of the total imports to Estonia. Only exports and imports of oil products increased compared to the same period of the previous year.

In September, the main countries of destination of exports from Estonia were Finland (18% of the total exports), Latvia and Sweden (both 12%). Compared to September of the previous year, the biggest decrease in exports was announced to Finland and Sweden (both by 0.7 billion kroons).

The main countries from where goods were imported to Estonia in September were Finland (14% of the total imports), Russia, Germany and Latvia (each with the share of 11% of total imports). Compared to September of the previous year, imports of goods declined from all main partner countries, the most from Germany and Finland.

Compared to August 2009, exports of goods from Estonia increased 16% and imports 9%. It has to be taken into account that the growth of the turnover of trade was also influenced by the seasonality.

The average decrease of three quarters of 2009 was 26% in exports and 35% in imports compared to the same period of the previous year. The trade deficit decreased nearly three times.

Estonia’s foreign trade, January–September, 2008–2009

Month	Exports, million kroons			Imports, million kroons			Balance, million kroons
	2008	2009	change, %	2008	2009	change, %	2008	2009
January	10 154	7 262	-28	13 725	8 831	-36	-3 571	-1 569
February	10 677	7 762	-27	13 641	8 857	-35	-2 964	-1 095
March	10 647	8 289	-22	14 145	9 808	-31	-3 498	-1 519
1st quarter	31 478	23 313	-26	41 511	27 496	-34	-10 033	-4 183
April	12 332	7 690	-38	15 916	9 337	-41	-3 584	-1 647
May	11 549	8 106	-30	14 507	8 503	-41	-2 958	-397
June	10 862	9 512	-12	14 140	9 965	-30	-3 278	-453
2nd quarter	34 743	25 308	-27	44 563	27 805	-38	-9 820	-2 497
July	10 969	8 203	-25	15 047	9 589	-36	-4 078	-1 386
August	11 142	8 033	-28	13 420	9 360	-30	-2 278	-1 327
September	12 300	9 323	-24	15 195	10 231	-33	-2 895	-908
3rd quarter	34 411	25 559	-26	43 662	29 180	-33	-9 251	-3 621

 Read more from Statistics Estonia

China has expressed interest to buy Estonian Air

The article titled “Looking eastwards, even further” published in economist.com today claims that the Chinese state is interested in buying Estonia Air. The article says, among others: “China has plenty of reasons to develop a presence in eastern Europe, ranging from trade to geopolitics. It has expressed interest in buying Estonian Air (currently up for sale by SAS, its owner). That would give China a “domestic” European Union airline and access to a low-cost airport.”

Full article is available here: http://www.economist.com/world/europe/displayStory.cfm?story_id=14901315

Source: BBN

Ex-minister accused for bribery

Tallinn Circuit Court ruled today that ex-minister Villu Reiljan was guilty of asking a 1.5 million kroon bribe from businessman Aivo Pärn through his lawyer Tarmo Sild.

According to ERR, this means that the ruling of judge Märt Toming of Harju County Court on May 19 will stay. Under the judgement, Reiljan received a conditional sentence of 2 years 3 months in prison with 3-year probation period, Sild was ordered to pay 102,870 kroons for mediating the fine and Pärn was ordered to pay 143,440 kroons for promising to pay the bribe.

Lawyers of Reiljan, Pärn and Sild said today they will definitely appeal the ruling in the Supreme Court in cassation.

According to the ruling, Reiljan asked 1.5 million kroons in bribe in connection with the auction of the office building at Rävala 8 in central Tallinn held in autumn 2006 by the ministry of environmental affairs. 

The starting price ofthe 16,600 square metre building was 315 million kroons. 33 bidders participated, with RealWAY that belongs to Marcel Vihmann and Tiit Pruuli having made the highest bid at 426 million kroons. Wipestrex Grupp made second-highest bid of 420 million, third was the amended offer by Wipestrex Grupp in the amount of 380 million and fourth was BPTO Peterburi OÜ with 325 million.
 
When the ministry declared RealWAY the winner of the auction, the company itself disputed the result itself and asked the court for protection.

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Prices increased most in energy supply and mining

According to Statistics Estonia, in October 2009 the producer price index increased 0.1% compared to September and decreased 2.2% compared to October 2008.

In October compared to the previous month the producer price index was more than average influenced by the increase in prices in the manufacture of wood products and by the decrease in prices in the manufacture of food products. Compared to October 2008 the prices increased most in energy supply and mining.

Change in the producer price index by economic activity, October 2009

Economic activity	September 2009 – October 2009, %	October 2008 – October 2009, %
TOTAL	0.1	-2.2
Energy supply	0.4	3.5
Mining	0.3	3.5
Manufacturing	0.0	-3.0

In October 2009 the export price index decreased 0.1% compared to September 2009 and 4.5% compared to October 2008.

In October compared to the previous month, the export price index was more than average influenced by the decrease in prices in the manufacture of food products and beverages, and in the manufacture of wearing apparel and by the increase in prices in the manufacture of building materials and chemical products.

In October 2009 the import price index decreased 1.2% compared to September 2009 and 7.6% compared to October 2008.

In October compared to the previous month, the import price index was more than average influenced by the decrease in prices of mineral fuels, food products and rubber and plastic products.

Source: Statistics Estonia

CIA secret ‘torture’ prison found in Lithuania

According to ABC News, the CIA built one of its secret European prisons inside an exclusive riding academy outside Vilnius in Lithuania.

This was reported by a current Lithuanian government official and a former U.S. intelligence official. “The activities in that prison were illegal,” said human rights researcher John Sifton. “They included various forms of torture, including sleep deprivation, forced standing, painful stress positions.”

Lithuanian officials provided ABC News with the documents of what they called a CIA front company, Elite, LLC, which purchased the property and built the “black site” in 2004. Lithuania agreed to allow the CIA prison after President George W. Bush visited the country in 2002 and pledged support for Lithuania’s efforts to join NATO. “The new members of NATO were so grateful for the U.S. role in getting them into that organization that they would do anything the U.S. asked for during that period,” said former White House counterterrorism czar Richard Clarke, now an ABC News consultant.

“They were eager to please and eager to be cooperative on security and on intelligence matters.” Lithuanian president Dalia Grybauskaite declined ABC’s request for an interview. ABC News first reported that Lithuania was one of three eastern European countries, along with Poland and Romania, where the CIA secretly interrogated suspected high-value al-Qaeda terrorists, but until now the precise site had not been confirmed.

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World Bank: Estonia next to adopt the euro

Estonia is set to become the next euro member as years of fiscal prudence help it to recover faster than neighboring Latvia and Lithuania, a World Bank economist said, reported Bloomberg.

“It’s doing everything it can to keep the deficit within 3 percent of GDP this year,” Thomas Laursen, the World Bank’s country manager for Poland and the Baltics, said in an interview in Warsaw. “Estonia will be the next country to adopt the euro.”

The former Soviet state has cut its budget at the expense of domestic demand, exacerbating the second-deepest recession in the European Union, to ensure the currency switch. The government is betting euro membership will support trade and encourage investment, justifying the economic pain needed to pass the bloc’s budget tests. Estonia would become the third east European state to join the monetary union after Slovenia and Slovakia.

Laursen is adding his voice to a group of analysts predicting Estonia will achieve euro membership by its target date of January 2011. The International Monetary Fund said this week the country is “well on its way” toward adopting the euro in 2011. Nordea Bank AB, the biggest Nordic lender, said on Nov. 17 the Baltic state’s target is a “realistic dream.”

EU rules require countries wanting to join the euro to keep their budget gaps within 3 percent of gross domestic product and debt levels below 60 percent of GDP. Estonia’s budget gap will be 2.8 percent of GDP in 2009 and 2.95 percent in 2010, the government estimates.

The country’s debt to GDP ratio will be 7.4 percent in 2009, the lowest in the European Union, and compares with an estimated average in the 27-member bloc of 73 percent this year, the European Commission said on Nov. 3.

The government has cut public spending, including freezing mandatory pension contributions, raised taxes and booked higher dividends from state-owned firms to reduce the budget deficit by 9 percent of GDP this year. The measures contributed to a 15.3 percent annual contraction in the third quarter, following a 16.1 percent slump in the second.

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Port of Tallinn’s Jan-Sept net profit up 15 pct

The consolidated net profit of Estonia’s state-owned port company Tallinna Sadam in the first nine months of this year was 406 million kroons (EUR 25.94 mln), an increase of 15% compared to the same period last year.
According to unaudited figures, consolidated revenues during the same period totalled 973 million kroons, which is 6% more than a year ago, the company reports.
The first nine months of 2009 were successful for the company, Tallinna Sadam said.
The nine-month freight flows added up to 23.3 million tons, marking growth of nearly 7%. Tallinna Sadam thereby regained third position among the largest ports in the eastern part of the Baltic Sea after Primorsk and St. Petersburg and ahead of Riga, Ventspils and Klaipeda.
Despite the complicated economic situation and contracted consumption, the number of passengers served in the first nine months of this year stayed at the record level registered in 2008, the company said.
In the January-September period a total of 5.7 million passengers passed through the ports of Tallinna Sadam. A small drop was recorded in the number of passengers on regular lines but the number of cruise passengers at the same time increased by 11% to 415 000, which is an all-time record for Tallinna Sadam.

Source: Estonian Review

Sustainability of Estonian economy among best in EU

A sustainability analysis of the EU public sector shows that Estonia’s risks in the sphere are small and the adjustments needed to ensure sustainability are some of the smallest in the European Union (EU). It appears from a recent analysis that if in the EU on average the sustainability gap, the effort to put public finance on a sustainable path, is 6.5% of GDP, then for Estonia the same figure is 1.0%. Bulgaria must make almost as big adjustments. Hungary and Denmark may slightly slacken their finances, but all the other countries must make bigger efforts to ensure sustainability compared with Estonia. In Latvia, for example, it is necessary to make 7.1% and in Lithuania 9.9% of financial adjustments of their GDP finances to ensure sustainability. The necessary changes can be made both by increasing incomes as well as by contracting expenditures. The European Commission also pointed out the low debt burden of the Estonian government sector, although the debt burden will grow this and the next year. In 2020 there will be seven countries in the European Union with a debt burden of less than 60% of GDP. Besides Estonia such countries also include Finland, Sweden and Denmark.

Source: Estonian Review

Baltics post EU’s biggest drop in new car sales

While new car sales in Latvia fell 81.6% in a year in October, Estonia and Lithuania were close by, writes Kauppalehti.

According to the paper, new car sales in Estonia were down 73.2% and in Lithuania 71.3%.

The fall in Hungary was 72.4%, in Bulgaria 60.5% and in Romania 69%.

Latvia, for instance, registered only 218 new cars in October. Estonia’s figure was 450 new cars.

Sale of new cars in  new European member states fell 37% in October year on year. From January to October, around 696,000 new cars were sold in new member states, down by 40% year on year.

Source: BBN