Ministers sign final prerequisite agreement for visa freedom with USA

Estonian Interior Minister Jüri Pihl and Justice Minister Rein Lang signed an agreement in Washington that serves as a prerequisite for visa-free travel between Estonia and the United States.
The intergovernmental agreement on the combating and prevention of serious crime was signed on behalf of the US government by Homeland Security Secretary Michael Chertoff and Assistant Attorney General Matthew Friedrich.
“This agreement is extremely important and necessary in today’s world full of risks, where international terrorism, cross-border crime, and illegal immigration are jeopardising countries’ internal stability and people’s daily lives, and are undermining the mainstays of a democratic society,” the Estonian interior minister said during the signing of the agreement.
The agreement is the final prerequisite for the accession of Estonia to the US visa waiver program. Before the decision to expand the program is made, the US secretary of state must formally name Estonia a candidate for visa waiver.
Once that has been done, the homeland security secretary must make four more steps — certify the system of checking departing air passengers and confirm that it is 97% effective, certify the system of electronic travel permits, confirm that Estonia does not pose a threat to the security and immigration arrangements of the United States, and formally notify the Congress that a decision has been made to extend the Visa Waiver Programme to Estonia.
Source: Estonian Review

Harvesting continues

According to Statistics Estonia, by 15 September, a half of the sown area of cereals, a third of the area under potatoes and 16% of the sown area of rape and turnip rape had been harvested in Estonia.

Estimated high production did not realize due to unusually unfavourable climate conditions in harvesting period. The yield of harvested crop was very good. Harvesting continues on unharvested areas and a big share of production may be left uncollected due to destruction. A lot of crop seed for grain has been harvested for green fodder.

For the same time in the previous year, 94% of the sown area of cereals, 28% of the sown area of rape and turnip rape, and 30% of the area under potatoes had been harvested.

According to preliminary data, in 2008 cereals were grown on 323,000 hectares, of which 53% has been harvested for grain, 75% for rye, 52% for wheat, 55% for barley and 33% for oats. One hectare of the harvested area gave on an average 3,302 kilograms of grain, of which 3,652 kilograms of rye, 3,605 kilograms of wheat, 2,983 kilograms of barley and 2,992 kilograms of oats. 78% of winter crops have been harvested and one hectare of the harvested area gave on an average 3,978 kilograms grain.

Rape and turnip rape were grown on 77,700 hectares, of which 16% has been harvested. One hectare of the harvested area gave on an average 1,870 kilograms of rape and turnip rape seeds.

Potatoes were grown on 11,410 hectares, of which 32% has been gathered. One hectare gave on an average 14,914 kilograms of potatoes.

Source: Statistics Estonia

Estonian tax ratio increased

According to the Statistics Estonia, in 2007 the Estonian overall tax ratio was 33.1% of the Gross Domestic Product (GDP). The ratio of taxes and compulsory social security contributions to the GDP rose by 1.8 percentage points compared to 2006.

In 2007, the revenues from the taxes and social security contributions increased by 23% compared to the previous year, bringing in to the state 79 billion kroons. The overall tax ratio increased to 33.1% in 2007; since 2002 the indicator had remained at the level of 31%.

Approximately three quarters of the tax income goes to the central government revenues. In 2007 the central government tax revenue accounted for 10 billion kroons more than last year, 56 billion kroons in total. Most of it (40%) came from the value added tax, which increased 17% compared to 2006 due to more active trading. The tax ratio of the central government tax revenues to the GDP has stood at around 20% over years.

The tax revenues of local governments rose by a quarter over the year — from 8.5 billion kroons to 10.6 billion kroons. The increase came mainly from the income taxes, because over 90% of the tax revenues of local governments is received from the income taxes. Due to the increase in the income taxes, driven by the growth of wages, the ratio of local governments’ tax revenues rose to 4.4% of the GDP.

In 2007, the revenue from the compulsory social security contributions (pension, health and unemployment insurances) was by a quarter higher than in 2006. Taxes which Estonia pays to the account of the European Union comprise approximately 0.4% of the GDP. These include the membership fee allotted from the value added tax and the customs duties collected in Estonia in the name of the European Union from the third countries.

Taxes and compulsory social security contributions by recipient (% of GDP)

	2004	2005	2006	2007
Total	30.7	30.9	31.3	33.1
Central Government	21.8	21.9	22.3	23.4
Local Governments	4.0	4.0	4.1	4.4
Social Security Funds	4.6	4.6	4.5	4.9
European Union	0.2	0.3	0.4	0.4

The overall average tax ratio of the European Union has remained within the limits of 40% since the beginning of the 1990s.

Source: Statistics Estonia

Consolidated budget still in surplus

According to the adjusted data of Statistics Estonia, the Estonian general government sector surplus in 2007 was 2.7% and the consolidated gross debt level was 3.5% of the Gross Domestic Product (GDP). The general government gross debt level is the lowest within the decade.

In 2007, adjusted on the basis of the annual financial statements, the surplus of the general government sector consolidated budget was 6.4 billion kroons. The central government sector surplus was 2.6% of the GDP and the surplus of social security funds was 0.6% of the GDP. Inclusion of the Local Governments extra-budgetary foundations in the accounting caused adjustment in the balance of the Local Governments sector’s consolidated budget: the sector’s deficit increased to -0.5 % of the GDP (+0.2%).

The general government gross debt level in 2007 was the lowest within the decade: 3.5% of the GDP. At the same time the central government’s debt level decreased 25% compared to 2006, the borrowing of the local governments sector increased by 9%, constituting over two thirds of the gross debt as before.

General Government consolidated surplus and debt levels, 1995–2007

 

General Government Sector comprises, in addition to State and Local Government institutional units, the State and Local Governments extra-budgetary funds and foundations, public-legal institutions and non-market producing public enterprises. The General Government sector consolidated budget represents in addition to the balance of revenues and expenditures of the State and Local Governments own budgets also the balance of revenues and expenditures of the State and Local Governments extra-budgetary funds and foundations, public-legal institutions and non-market producing public enterprises budgets.

Source: Statistics Estonia

Half of the gross domestic product of Estonia is created in Tallinn

According to Statistics Estonia, the value added created in Harju county covered 61.1% of the Estonia’s gross domestic product (GDP) in 2006. Concentration of active economic activity in Tallinn played the main role in it. The value added created in Tallinn accounted for 50.8% of Estonia’s GDP.

The share of Harju county’s value added has gradually increased in the GDP of Estonia, for example ten years ago, i.e. in 1996, the share of Harju county comprised 53% of Estonia’s GDP. In 2006, Harju county was followed, at a great distance, by Tartu county and Ida-Viru county whose shares in the GDP of Estonia were respectively 9.8% and 7.2%. Three counties which had contributed the least to the GDP of Estonia for several years running were Hiiu, Põlva and Jõgeva counties (with the respective proportions of 0.5%, 1.1% and 1.2% in the GDP).

Share of county’s value added in the GDP of Estonia, 2006 (percentages)

 

In 2006, the GDP of Estonia per capita was 152,610 kroons, while the respective indicator of Harju county was 239,987 kroons or 157.3% of the Estonian average. But the relevant indicator of Tallinn accounted for 172% of the Estonian average. Harju county was followed by Tartu and Pärnu counties, where the indicators of GDP per capita were respectively 88.3% and 73.1% of the Estonian average. The smallest GDP per capita was continuously observed in Jõgeva and Põlva counties in 2006, respectively 43.8% and 47.4% of the Estonian average.

County’s GDP per capita, 2006 (share of the average in Estonia)

 

In 2006, 67.2% of the value added of Estonia was produced in the tertiary sector, 29.7% in the secondary sector and 3.1% in the primary sector. Over the last ten years, the share of primary sector has been continuously decreasing and the share of tertiary sector has been increasing.

It is characteristic of Estonia that in the counties which share of the GDP in the country’s GDP is large (Harju, Tartu and Ida-Viru counties), the share of primary sector is very small. But in the counties which share of the GDP in the country’s GDP is the smallest (Jõgeva, Hiiu and Põlva counties), the primary sector has a relatively large share.

Thus, in 2006, 73.8% of the Harju county’s value added was produced in the tertiary sector and only 0.8% in the primary sector. In Tartu county, the tertiary sector accounted for 66.9% and the primary sector 2.9%. But in Ida-Viru county, which is one of the three counties characterized by the largest GDP, almost half of the value added (49.6%) was produced in the secondary sector. This reflects the important role of mining, electricity and manufacturing in the economic activity of this county. The share of primary sector was very modest (1.6%) in Ida-Viru county.

In Jõgeva, Hiiu and Põlva counties, the share of primary sector was 19.3%, 15.5% and 17.0% respectively.

Primary sector includes the economic activities of agriculture, hunting and forestry; and fishing. Secondary sector includes mining and quarrying; manufacturing; electricity, gas and water supply; and construction. Tertiary sector includes wholesale and retail trade; hotels and restaurants; transport, storage and communication; financial intermediation; real estate, renting and business activities; public administration and defence; compulsory social security; education; health and social work; other community, social and personal service activities.

Source: Statistics Estonia

 

Government approves 2009 state budget

At its session today the Estonian government approved the draft state budget for 2009. Based on the draft, total expenditure in 2009 will be 98.7 billion kroons, representing growth of 8.4 billion kroons on the 2008 annual and supplementary budgets. The rise in expenditure is primarily the result of increased use of EU support and growing state obligations. The budget’s revenue has been calculated at 97.8 billion kroons.

“I’m glad the government managed to strike a balance between economy, increasing revenue and necessary expenditure, despite the narrow budgetary framework we had to work within,” said Minister of Finance Ivari Padar. “Given the way the economic situation has changed, it’s obvious that some unpopular decisions have had to be made while putting the budget together, in terms of taxes, and support that will now have to be withdrawn.”

The minister continued: “Having said that, the priorities of the budget are security – ensuring people feel safe – and education.” These priorities are reflected to an extent in the ministries whose operating expenditure has been reduced the least: the Ministry of Defence, the Ministry of Education and Research and the Ministry of the Interior.

Awaiting the greatest total growth in the budget next year will be the Ministry of Defence, the Ministry of the Environment, the Ministry of Social Affairs and the Ministry of Education and Research. “One of the government’s budget priorities is obviously maximum possible use of European Union support,” Padar explained. “The increase in the amount of support we are receiving will mean growth in next year’s budget too.” A total of 14 billion kroons in European Union support and state cofinancing is planned to be directed to projects next year.

“What’s important is that the budget for the government sector for next year has been drawn up with balance in mind, and that will take us towards adopting the euro,” the minister added. “I’m convinced that the budget as it stands at the moment is the best possible compromise in terms of Estonia’s development.”

As in previous years, the objective setting in preparing the budget was to at least achieve balance in the government sector’s budgetary position. This means that the budgetary plans of all of the institutions forming part of the government sector (including local governments and public law institutions) are taken into account in developing the budget. Government sector balance, rather than state budget balance, is also what is taken into consideration when assessing readiness for transition to the euro.

The basis for the preparation of the 2009 budget was the state budget strategy approved in May and the additional decisions related to it made thereafter in cabinet meetings. The draft state budget was delivered to the Riigikogu (the Estonian parliament) today.

Source: Estonian Ministry of Finance

Half of the gross domestic product of Estonia is created in Tallinn

The share of Harju county’s value added has gradually increased in the GDP of Estonia, for example ten years ago, i.e. in 1996, the share of Harju county comprised 53% of Estonia’s GDP. In 2006, Harju county was followed, at a great distance, by Tartu county and Ida-Viru county whose shares in the GDP of Estonia were respectively 9.8% and 7.2%. Three counties which had contributed the least to the GDP of Estonia for several years running were Hiiu, Põlva and Jõgeva counties (with the respective proportions of 0.5%, 1.1% and 1.2% in the GDP).

Share of county’s value added in the GDP of Estonia, 2006 (percentages)

 

In 2006, the GDP of Estonia per capita was 152,610 kroons, while the respective indicator of Harju county was 239,987 kroons or 157.3% of the Estonian average. But the relevant indicator of Tallinn accounted for 172% of the Estonian average. Harju county was followed by Tartu and Pärnu counties, where the indicators of GDP per capita were respectively 88.3% and 73.1% of the Estonian average. The smallest GDP per capita was continuously observed in Jõgeva and Põlva counties in 2006, respectively 43.8% and 47.4% of the Estonian average.

County’s GDP per capita, 2006 (share of the average in Estonia)

 

In 2006, 67.2% of the value added of Estonia was produced in the tertiary sector, 29.7% in the secondary sector and 3.1% in the primary sector. Over the last ten years, the share of primary sector has been continuously decreasing and the share of tertiary sector has been increasing.

It is characteristic of Estonia that in the counties which share of the GDP in the country’s GDP is large (Harju, Tartu and Ida-Viru counties), the share of primary sector is very small. But in the counties which share of the GDP in the country’s GDP is the smallest (Jõgeva, Hiiu and Põlva counties), the primary sector has a relatively large share.

Thus, in 2006, 73.8% of the Harju county’s value added was produced in the tertiary sector and only 0.8% in the primary sector. In Tartu county, the tertiary sector accounted for 66.9% and the primary sector 2.9%. But in Ida-Viru county, which is one of the three counties characterized by the largest GDP, almost half of the value added (49.6%) was produced in the secondary sector. This reflects the important role of mining, electricity and manufacturing in the economic activity of this county. The share of primary sector was very modest (1.6%) in Ida-Viru county.

In Jõgeva, Hiiu and Põlva counties, the share of primary sector was 19.3%, 15.5% and 17.0% respectively.

Primary sector includes the economic activities of agriculture, hunting and forestry; and fishing. Secondary sector includes mining and quarrying; manufacturing; electricity, gas and water supply; and construction. Tertiary sector includes wholesale and retail trade; hotels and restaurants; transport, storage and communication; financial intermediation; real estate, renting and business activities; public administration and defence; compulsory social security; education; health and social work; other community, social and personal service activities.

Source: Statistics Estonia

A. Le Coq beverage group doubled profits in 2007

A. Le Coq Group, the owner of beverage holdings in the all three Baltic states, earned a net profit of roughly 250 million kroons (EUR 16 mln) in 2007, almost double the figure for 2006.
A. Le Coq Group owned the Tartu Õlletehas beverage house in Estonia, Cesu Alus in Latvia, and Ragutis in Lithuania during 2007.
At the beginning of this year, A. Le Coq Group sold the Latvian and Lithuanian subsidiaries to its Finnish parent group Olvi.
A. Le Coq Group is about to merge with A. Le Coq, the Estonian holding, this year. As a result, the holding company will be deleted from the register.
A. Le Coq said in its report that its breweries in all the three Baltic countries expect a boost in both sales and profit in 2008.

Source: Estonian Review

Enterprise Estonia to get increased EU support for 2009 budget

The budget of Enterprise Estonia next year will be 1.095 billion kroons (EUR 70 mln), according to the state budget bill endorsed by the government.
The share of EU funds in the budget will be 910 million kroons and that of the Estonian state 107 million kroons.
Year on year, the share of EU support is set to grow by 24 percent and that of Estonia’s own financing to decrease by 43 percent.
The Kredex fund is set to operate with a budget of 345 million kroons next year, of which EU support will make up 285 million kroons. The share of EU support will also grow in Kredex’s case, and the Estonian funding will decrease.
This year, Enterprise Estonia has a budget of 923 million kroons and Kredex of 319 million kroons.
Enterprise Estonia is one of the institutions responsible for the implementation of EU structural funds in Estonia, being the primary provider of support and development programs geared toward businesses.
The Credit and Export Guarantee Fund (KredEx) was established with the aim of improving the financing of small enterprises in Estonia, reducing export-related credit risks, enabling people to build or renovate their homes, and promoting energy efficiency in Estonia.
Source: Enterprise Estonia

The share of tourists arriving in Estonia is 0,4% in the tourism of Europe

According to Statistics Estonia, 1.9 million foreign tourists stayed overnight in Estonia last year, this comprises 0.4% of tourists travelling in the European countries.

According to Statistics Estonia, 1.9 million foreign tourists stayed overnight in Estonia last year, this comprises 0.4% of tourists travelling in the European countries.

According to the data of the UN World Tourism Organization, 903 million foreign tourists staying overnight travelled in the world in 2007. This is 7% more than a year ago. More than half of the tourists travelling in the world visited the European countries, less than half a per cent of them came to Estonia. Compared to the previous year, 5% more tourists arrived in the European countries, but 2% fewer tourists arrived in Estonia. In 2007, Estonia received 1.9 million foreign tourists who stayed overnight, this makes 1.4 foreign tourists per Estonian resident. 984 accommodation establishments with 19,000 rooms and 46,000 bed places offered their services to foreign tourists in Estonia. 1.4 million foreign tourists used the services of Estonian accommodation establishments last year. The majority of clients in accommodation establishments came from Finland accounting for more than a half of foreign tourists who stayed in accommodation establishments. Decrease in the number of tourists from Finland was also the main reason for the last year’s decline in the total number of foreign tourists visiting Estonia.

First and foremost, foreign tourists come to Estonia to spend their holidays. More than half of the respondents interviewed by Statistics Estonia in the framework of the survey “Foreign Visitors in Estonia” marked ’holiday trip’ as the main purpose for visiting Estonia. 7% came to a shopping trip, 12% visited relatives and acquaintances and the remaining proportion of respondents had some other reason for visiting Estonia. Mostly the tourists from more distant countries — Italy, the United States of America, Canada, Germany and the United Kingdom — considered their visit to Estonia as a holiday trip. But the biggest cross-border shoppers were visitors from Finland. A foreign visitor left on average 2,624 kroons in Estonia.

Residents of Estonia are also fond of travelling. The data of “Tourism Survey of Estonian Population” revealed that in 2007 every second Estonian resident made at least one foreign trip lasting for more than one day. According to the data of the survey, the 15–74-year-old Estonian residents made a total number of 677,000 overnight trips to foreign countries last year. In organizing trips, travellers were assisted by travel agencies and tour operators who mediated foreign trips for more than half a million persons. Although our neighbour country Finland held the first place among the Estonian residents as the destination of trip, other popular destinations of holiday trips included Egypt, Spain, Turkey, Greece and Italy. 49% of outbound tourists were women and 51% — men. The average sum of money spent on a trip was 9,189 kroons, 4,433 kroons of the referred sum was spent before the trip.

Overnight tourists in the world, 2004–2007 (millions)

Year	Overnight visitors’ arrivals
	in the countries of the world	in the countries of Europe	in Estonia	the share of tourists having arrived in Estonia in the tourism of Europe
2004	761	424	1.75	0.41
2005	803	439	1.92	0.44
2006	846	461	1.94	0.42
2007	903	484	1.90	0.39

Source: UN World Tourism Organization, Enterprise Estonia / Estonian Tourist Board

Source: Statistics Estonia