Minister: We have two weeks to rescue Rail Baltic

Urve Palo, Estonian Minister of Economy, says that she is confident that Lithuania will shortly accept that Vilnius Cannot be included in the current route for Rail Baltic. Speaking of the statement made recently by European Commission’s representative Pavel Telicka that Vilnius cannot be added to the route and that he cannot understand why Lithuania have changed its mind, Palo said that Brusselks have now made its position clear.

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Estonia’s economic linkages with Russia

Russia’s share in Estonia’s foreign trade is below 10%
Russia’s share in Estonia’s foreign trade is rather small, only 9% in 2013. However, Russia’s market is more relevant for certain sectors, like food industry and agriculture, as well as chemical and textile industries. As a source of raw materials, Russia is important for timber, furniture, chemical, and metal industries. Russia’s market is also significant for Estonia’s exports of transport and travel services.

Russia’s share in foreign investments remains small
The stock of Estonia’s investment in Russia and Russia’s investment in Estonia remains modest. At the end of 2013, the stock of Estonia’s investments in Russia amounted to 4% in Estonia’s total investment abroad, and the stock of Russia’s investment in Estonia was also 4% of all foreign investment in Estonia.

The crisis in Ukraine will affect trade and investment flows
Exports to Russia are affected not only by the decreasing purchasing power of Russians, but also by possible trade barriers. Investment flows will be smaller because investing in Eastern Europe is considered more risky and will be less profitable when economic growth in the region will be slower. If the conflict in Ukraine does not escalate and sanctions remain targeted with a modest impact, the Baltic economies are still expected to grow, albeit slower than anticipated before. Should the conflict escalate and broader trade sanctions be introduced, Estonia and the other Baltic economies will probably be hit harder – in which case a recession should not be ruled out.

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Foreigners need more information to adapt quicker – study

In order to facilitate the adaptation of foreigners staying in Estonia it is necessary to ensure better availability of information and existence of an effective adaptation program, finds the study on foreigner adaption to Estonian society.

This week Estonian Ministry of the Interior presented a new study “Adaptation of new immigrants in Estonia: choices and political proposals to form a comprehensive and sustainable system”. In this study the interviewed foreigners and the organizations recruiting them were drawing attention to the difficulties in obtaining important practical information and information regarding functioning of the state as well as to the currently modest role of the state in facilitating adaptation.

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Moscow concerned for Russians in Estonia

Russia signaled concern on Wednesday at Estonia’s treatment of its large ethnic Russian minority, comparing language policy in the Baltic state with what it said was a call in Ukraine to prevent the use of Russian, reported Reuters.

Russia has defended its annexation of Ukraine’s Crimea peninsula by arguing it has the right to protect Russian-speakers outside its borders, so the reference to linguistic tensions in another former Soviet republic comes at a highly sensitive moment.

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Russia could nationalize Estonian assets


Estonian economist Maris Lauri writes that EU and US are likely to impose extensive trade sanctions in Russia in the light of Ukraine events. Russia is likely to respond with its own means which may include that the assets of foreign companies in Russia could be nationalized.

Lauri says that although such retaliation would be mainly targeted against US and British enterprises, one should not forget that Russia likes to attack weaker ones which means that this is something that also Estonian entrepreneurs must be prepared for.

Since Estonia is fully dependent on supplies of Russian natural gas, the Estonian government must quickly look at alternative possibilities to reduce Estonia’s energy dependency on Russia.

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FinMin: Europe must protect defence expenditure

EU Finance ministers of the European Union discussed the situation in Ukraine and the effect that the crisis has on Europe. “Ukraine’s current problems are beyond economic for Europe. The European Union must act together with the International Monetary Fund to help the country,” said Estonian Minister of Finance Jürgen Ligi. 

“Ukraine’s most critical need is currently support for state institutions’ and alleviation of the loss of energy subsidies.”
The Minister of Finance’s speech referred to Russia’s historical behaviour pattern in Europe. “This will happen again if Europe does not express will and readiness to protect itself and keeps making cuts in defence expenditure,” said Ligi. Estonia is one of the states that spend 2 percent of their GDP on national defence.

 Last week the European Commission adopted an aid package of upon to 11 billion euros with specific measures for economic and monetary aid for Ukraine. The package of up to 11 billion euros was also approved by the EU leaders.

Source: Estonian Ministry of Finance

Estonian food producer: trade with Russia is key

Ago Teder, CEO of Estover Piimatööstus, a major exporter of Estonian milk products to Russia, told Äripäev that he expects the border treaty that will be signed today to give a boost with trade with Russia.

Teder said that Estonian producers would be fools not to try to sell their food in Russia because there is positive awareness about the quality of Estonian food among Russian consumers.

„We can say that while Russians welcome Estonian food, our products are not welcome in Europe,” he added.

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Visualising how the former Soviet countries are doing

They were three days that shook the world – and shook the Soviet Union so hard that it fell apart.

But for better or worse? Twenty years on from the Soviet coup that ultimately ended Mikhail Gorbachev‘s political career and gave birth to 15 new states, The Guardian was keen to explore just how well those 15 former Soviet republics had performed as independent countries. Our data team mined statistics from sources ranging from the World Bank, the UNHCR, the UN Crime Trends Survey and the Happy Planet Index to compare the performance of the countries. And we combed through the OSCE’s reports on every election in each country since 1991 to see where democracy was taking hold – and where it was not wanted.

It was in many senses a traumatic break-up. Like a marriage, there was so much that was jointly owned that it was hard to make a clean break. Industries, military units, whole populations, were scattered across an empire, indivisible. Moreover, the economic crisis that led the USSR to the brink tilted most of the emergent countries into the abyss. GDP fell as much as 50 percent in the 1990s in some republics, Russia leading the race to the bottom as capital flight, industrial collapse, hyperinflation and tax avoidance took their toll. Almost as startling as the collapse was the economic rebound in the 2000s. By the end of the decade, some economies were five times as big as they were in 1991. High energy prices helped major exporters like Russia, Kazakhstan, Turkmenistan and Azerbaijan, but even perennial stragglers like Moldova and Armenia began to grow…

The Baltic republics

Since 1990, their economies have grown around fourfold, though not without the occasional financial convulsion. Population levels tell a different story though: all three countries have lost at least 10 percent of their populations, and only Estonia has seen a sharp increase in life expectancy. Democratic records are exemplary, but the countries sit surprisingly low on international measures for wellbeing and happiness.

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Estonia, Russia may create a visa-free zone

After Estonia and Russia sign a border treaty on February 18, the two countries could set up a visa-free zone that would simplify the movement of people living in border areas and revive the local economy, reported ERR.

There is namely an option in the Schengen regime that enables to create a visa-free border zone in a range of up to 50 km from the border.

Read more from BBN and ERR

Lithuanian vice minister disagrees with Estonian PM

Lithuanian Deputy Transport Minister Arijandas Sliupas disagrees with the Estonian prime minister Andrus Ansip who said on Monday that the inclusion of Vilnius in the Rail Baltica network is a matter between Lithuania and the European Commission, reports ERR.

According to Slipas, it is not a matter not only for Lithuania, but also for a joint venture that the the three Baltic countries are planning to set up.

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