In September the downward trend of retail sales continued

According to Statistics Estonia, the retail sales of goods of retail trade enterprises decreased in September 2008 compared to this August as well as compared to September of the previous year.

A downward trend in the retail sales of goods of retail trade enterprises which started last year continued also in September of this year. High inflation, melting-down economy and the resulting decline in consumer confidence contributed to this trend. The confidence indicators reflected in the consumer survey and retail trade survey organised by the Estonian Institute of Economic Research show a continuous falling trend, too.

For the first time, retail sales were negative in March of this year compared to the same month of the previous year. This trend continued in September, too. In September, the retail sales of goods of retail trade enterprises were 4.5 billion kroons, which at constant prices was 8% less than at the same time a year ago. The decrease in the retail sales of goods was most influenced by the stores selling manufactured goods. In these stores the retail sales of goods decreased 12% compared to the same period of the previous year. Compared to September of the previous year, the retail sales of goods decreased in most economic activities, except mail order sale and retail sales of pharmaceutical goods and cosmetics. The retail sales in non-specialized stores with industrial goods predominating and the retail sales of stores selling household goods and appliances, hardware and building materials decreased the most.

Retail sales in grocery stores have been rather stable during the recent months. In these stores, the retail sales decreased 3% compared to September of the previous year. As before, the decrease in sales was influenced by a growth in the prices of food products and the resulting decline in consumption.

In September compared to August, the retail sales of goods in retail trade enterprises decreased 7% at constant prices.

In September the revenues from sales of retail trade enterprises were 5.3 billion kroons, out of which retail sales of goods accounted for about 85%. Compared to September of the previous year, the revenues from sales decreased by 1% at current prices. Compared to the previous month, this indicator decreased 6%.

Retail sales volume index of retail trade enterprises and its trend,
January 2000 – September 2008 (corresponding month of previous year = 100)

Source: Statistics Estonia

In September the industrial production was smaller than a year ago

According to Statistics Estonia, in September 2008 compared to September of the previous year, the production of industrial enterprises decreased 4%.

In manufacturing, the production fell 3% compared to the previous year. The main reason hindering the increase in production was insufficient market demand. The decrease in the production of manufacturing was mainly influenced by the production of food, wood and building materials. The manufacturing of food was continually hindered by the decrease in consumption resulting from price increase. Although the price increase has decelerated during last months, the prices of food products still increased 12% compared to September of the previous year. The decrease in the production of food was mainly influenced by the decrease in the production of beverages, primarily caused by a higher excise tax which increased in July and by the price increase of raw materials in the world market. The downward trend continued in the wood manufacturing where the shortage of raw materials and difficulties in the sales both in domestic and external markets continue. The Estonian market is influenced by the decrease in construction, and the external market — by stiff competition. Compared to September of the previous year, 22% less sawn timber and 9% less glue-laminated timber were produced. The largest fall (32%) was in the production of building materials which is directly connected with the decline in the construction market.

Similarly to the previous months, in September the production increased primarily in the export-oriented branches of industry — in the manufacture of metal products, chemical products, and electrical machinery. The production grew also in the manufacture of machinery, radio and communication equipment, precision instruments and motor vehicles, where the share of exports was the biggest. Thus, the share of exports was 97% in the manufacture of radio and communication equipment and 91% in the manufacture of precision instruments.

In September compared to September of the previous year, the production of electricity decreased 5%, the production of heat increased 17%.

In September compared to August, the seasonally adjusted industrial production change was less than 1%.

The volume index and trend of production in manufacturing, January 1998 – September 2008
(2000 = 100)

Change in volume index of industrial production, September 2008

Economic activity Change compared
to previous month according to
seasonally adjusted dataa
Change compared to corresponding
month of previous year
according to
unadjusted data
according to working-day
adjusted datab
TOTAL 0.5 1.3 -3.8
Energy production 7.4 -1.7 -1.7
Mining -1.8 -10.5 -14.9
Manufacturing -0.2 2.3 -3.2
manufacture of food products and beverages 1.9 -6.2 -9.8
manufacture of wood and wood products -1.9 -14.6 -19.0
manufacture of fabricated metal products -14.0 19.5 11.5
manufacture of electrical machinery -2.0 28.6 19.5
manufacture of building materials -2.1 -29.1 -32.0
manufacture of chemicals and chemical products 21.4 52.6 44.5
manufacture of furniture; manufacturing not elsewhere classified -1.0 -1.0 -8.0
manufacture of radio, television and communication equipment and apparatus 14.2 11.4 6.4
manufacture of textiles -0.2 3.0 -3.3


a In case of the seasonally adjusted volume index, the impact of the differing numbers of working days in a month and seasonally recurring factors has been eliminated. It is calculated only in comparison with the previous period.

b In case of the working-day adjusted volume index, the impact of the differing number of working days in a month has been eliminated. It is calculated only in comparison with the corresponding period of the previous year.

Source: Statistics Estonia

Estonian Government agreed measures to improve crisis management tools

The Ministry of Finance, Bank of Estonia and the Financial Supervision Authority presented an overview of the situation on the international financial markets and gave their opinion of the risks in the financial sector of Estonia at today’s cabinet meeting. Possible measures that could be applied by the state of Estonia to prevent and manage financial crises and the need to improve these processes were also discussed.
“Unlike many other countries, no liquidity or solvency difficulties have appeared in the financial sector of Estonia and the banks operating here are well capitalised,” said Minister of Finance of Estonia Ivari Padar. “Even though there is currently no need for additonal stabilising measures, Estonia should be prepared to react quickly and sufficiently whenever necessary. This readiness is also a part of the framework for ensuring financial stability that has been agreed in the European Union.”
The Government decided to broaden the possible scope of state guarantees and loans and to enable a fast decision-making. “It is important to make our laws more flexible and the Ministry of Finance will present the first part of the legislative package to the Government in November. We also have to perfect our framework of financial crises according to the changed situation in the world, and speed up the reaction time from the current level,” explained Padar.
The steps taken by nearby countries to ensure financial stability were also highlighted during the discussion. The Minister of Finance said that the list of measures is basically the same for all countries. “However, it is obvious that the concerns regarding the financial stability of each state have been different and this means that the solutions that have actually been used are also different,” added Padar.
Similarly to other EU member states, Estonia can also provide aid to banks operating here by giving loans, making capital injections, issuing state guarantees or acquiring the bank’s bonds or problematic assets should they be hit with difficulties. “However, the only purposes of state aid can be to guarantee the stability of the financial system and to prevent the transfer of risks to the real economy. The government is certainly not going to pay for the mistakes made by bank management,” assured Padar.
Considering that more than 90 percent of the Estonian financial institutions are owned by Swedish and Danish banking groups, the Minister of Finance confirms that any actions would be coordinated to consider cross-border impacts. “If Estonia needs to apply measures to guarantee the reliability of the financial system, this will be done in cooperation with Sweden and other concerned countries in the region,” explained Padar. “It is natural that this also means we have to take responsibility in case we have to share the financial burden.”
In order to promote financial stability and enhance confidence, Estonian Government decided to abolish the 10 percent co-insurance requirement from the deposit guarantee scheme and to increase the amount of guaranteed deposits up to 50,000 euros per customer per financial institution. The amendment entered into force on 9 October 2008.

Source: Estonian Ministry of Finance

Estonians can go to US without a visa starting on 17 November

Photo by Kairi Kurm

Photo by Kairi Kurm

Foreign Minister Urmas Paet met with United States Secretary of Homeland Security Michael Chertoff, in Tallinn for a visit, on Wednesday, 29 October. 

At the meeting, Foreign Minister Urmas Paet and USA Secretary of Homeland Security Michael Chertoff expressed their satisfaction over the successful co-operation between the governments of Estonia and the United States. A result of this co-operation is that Estonian citizens will be able to travel to the United States without a visa starting on 17 November. 

According to Foreign Minister Urmas Paet, the expansion of the United States of America’s Visa Waiver Programme is, for Estonia, a sure indication of good and tight relations and co-operation with the USA. “The USA is demonstrating trust in the Estonian citizens and nation with its decision,” stated the Estonian foreign minister. Paet added that visa freedom is important for both nations and will certainly strengthen contacts. However, Foreign Minister Paet also said at the meeting that Estonia thinks it is important that the USA Visa Waiver Programme be expanded to include all European Union nations.

Source: Estonian Ministry of Foreign Affairs

Read also: Ministers sign final prerequisite agreement for visa freedom with USA

Estonian citizens do not need visa to travel to Australia

Estonians can travel to Australia visa free

Estonians can travel to Australia visa free

Beginning on 27 October, Estonian citizens can travel to Australia for business or tourism without a visa.

Foreign Minister Urmas Paet stated that Australia is certainly a travel destination that Estonians are interested in, and visa freedom will simplify travelling to the country. “Replacing the visa requirement with electronic registration prior to entering Australia will simplify travel considerably, and will certainly benefit economic contacts between the two countries,” said Foreign Minister Paet.

It is possible to enter Australia multiple times during a 12-month period without a visa. The length of each stay can be up to three months.

In order to travel visa-free to Australia, European Union citizens must register themselves in the electronic travel system eVisitors Service.

It is recommended to register at least two weeks prior to travelling. Registration is free.

One can register through the home page of Australia’s Department of Immigration and Citizenship:

Remediation of Sillamäe’s radioactive tailings pond completed

An international conference opening on Oct 28, 2008 in Jõhvi in Ida-Viru County will mark the completion of 10 years of remediation work on the radioactive tailings pond in Sillamäe. Cooperation between Estonia, the Nordic countries and the European Union has removed one of the greatest threats of pollution to the Baltic Sea.

“Sorting out the environmental problems related to the site aren’t only important to Estonia but to all of the countries on the Baltic Sea,” said Tõnis Kaasik, the director of AS ÖkoSil. “It has been one of the European Union’s regional pilot projects. The financing scheme put together to resolve the issue is unique for involving so many different parties, and it sets a great example of cooperation to others.”

The project was launched in response to the environmental hazards the facility posed. Shoreline defences were erected from granite boulders as part of the remediation work in order to prevent erosion, thanks to which the tailings pond is protected against erosion from the sea and the effects of waves. Stability has been guaranteed using reinforced concrete buttresses on the sea-side of the pond and balanced dams at the right angles. In order to avoid pollution, a water re-routing system (with a wall built into the soil and deep drainage) was constructed to prevent waste from seeping into the sea. Surface water is now being routed past the tailings pond and ground water has been reduced to a level lower than that of the waste.

The tailings pond has been covered in a mixture of oil shale ash and various natural materials to a thickness of up to 13 metres. The use of layered covering was designed to provide the pond with the desired shape and a safe angle for its slopes. The final cover is made up of five different layers of soil, the most important of which is the lower, water-tight layer of clay. On top of this are different layers of soil performing various functions. The cover has been landscaped so as to avoid erosion and to achieve the optimum moisture regime. The cover is 2.1 metres thick and its construction involved 1.1 million m3 of different soils. The highest point of the hill with the cover in place is now 38 metres above sea level.

Design work on the covering and shaping of the tailings pond was carried out by the German company Wismut GmbH, that has extensive experience in planning and performance of similar remediation work in former mining regions in Germany.

The following threats to the environment have now been removed:
1. The covered facility looks like a grassy hill, which water cannot penetrate.
2. Radiation has been reduced to natural levels.
3. The chain of reinforced concrete buttresses constructed on the shore guarantees the stability of the dam, and shoreline defences have also been erected to combat the erosive effects of the elements.

“The Sillamäe uranium site has been one of the EU’s regional pilot projects,” Kaasik said. “Similar remediation projects have been carried out in Hungary, Slovenia, the Czech Republic and elsewhere in Central and Eastern Europe.”

One of the agencies behind the launch and organisation of the project was the Estonian Ministry of Environment.

The consultants on the project were Wismut GmbH, OÜ IPT Projektijuhtimine and OÜ E-Konsult. Its contractors were AS Geotehnika Inseneribüroo G.I.B., AS Eesti Ehitus and AS Aspi. AS Silmet Grupp and the Port of Sillamäe acted as cooperation partners.

The total cost of remediation of the Sillamäe tailings pond was more than 21 million euros (330 million kroons). It was financed by the European Union’s Phare programme, the Nordic environmental fund NEFCO and the governments of Norway, Denmark, Finland and Sweden, in addition to Estonian funding from the state budget and through the Environmental Investment Centre.

Further costs were incurred by AS Silmet in reorganising its production processes.

On the 28th  and 29th of October the international conference ‘From the past to the future – a retrospective on the Sillamäe tailings pond remediation project and the future possibilities of nuclear energy’ is being held by the Estonian Ministry of Environment and AS ÖkoSil at the Jõhvi Concert Hall.

The remediation of Sillamäe’s uranium tailings pond is the biggest environmental project of its kind ever undertaken in Estonia.

The facility was constructed in Sillamäe as a secret Soviet uranium plant in 1948. Uranium was produced at the site from mined Dictyonema shale between 1948 and 1953, after which it was produced using uranium ore imported from elsewhere in the Soviet Union and other Eastern bloc countries until 1977.

The Sillamäe radioactive waste storage facility is located on the western side of the town of Sillamäe in Ida-Viru County. At its closest point it lies just 30 metres from the shores of the Baltic Sea. The tailings pond covers an area of a little over 50 hectares. It contains 8 million m3 (12 million tonnes) of waste at a thickness of almost 20 metres.

The tailings pond contains toxic and hazardous waste from the processing of uranium ore – primarily residue from uranium, thorium and other radionucleides and heavy metals, as well as nitrogen compounds, acids and other chemicals. Oil shale ash from heating power station was also stored at the facility.

Preparations and design work on the remediation of the Sillamäe tailings pond began in 1997. One year later Estonian government and AS Silmet Grupp established a separate company for this purpose: AS ÖkoSil, specialising in environmental technology and waste management. Construction work lasted from 1998 to 2008.


Source: Estonian Ministry of the Environment

Estonia meets EU average for percentage of GDP allocated to R&D

Estonia is average among European Union member countries in terms of financing the research and development (R&D) sphere, according to a Eurostat study.
While 1.84 percent of the gross domestic product (GDP) was the average allocated by European Union states for research and development and labour costs of the sector in 2006, in Estonia the percentage was 1.1, the 15th highest in the EU.
The proportion of funding for R&D was the highest in Sweden (3.73 percent of GDP) and Finland (3.45 percent); of new member countries Slovenia (1.59 percent) and the Czech Republic (1.54 percent) were ahead of Estonia. Allocations for research and development were the lowest in Cyprus, Romania, Bulgaria, and Slovakia — all under 0.5 percent of GDP.
Of the world’s biggest economies, Japan (3.20 percent) and the United States (2.62 percent) were considerably ahead of the EU average.
At the same time, Estonia took first place in the European Union in terms of the growth in means allocated for R&D in the years 2001-06, by 25.3 per cent a year. The average growth in the European Union in the same period was 3.2 percent.
The growth in these allocations was also higher than 20 percent in Latvia (24.4 percent), Malta (23.5 percent) and Romania (20.2 percent).
According to the Lisbon Strategy, which is directed at raising the global competitiveness of the European Union’s R&D allocations, they should all be brought up to 3 percent of GDP by 2010.
The Lisbon Strategy also recommends that two-thirds of R&D expenses could be financed by the business sector. The actual European Union average concerning this point was 54.6 percent in 2005.
The leading countries in terms of the share of business in the R&D sphere are Luxembourg (79.7 percent), Germany (67,6) and Finland (66.9 percent), with Cyprus (16.8), Latvia (20.8) and Bulgaria (27,8 percent) bringing up the rear. The respective Estonian figure is slightly under 40 percent.

Source: Estonian Review