US prisoners to migrate to Europe

Estonia has agreed to receive prisoners from the US Guantanamo Bay detention camp that is being closed down, Foreign Minister Urmas Paet told reporters after the government’s meeting on Thursday, ITAR-TASS reports.

“These are not criminals charged with terrorism, but suspects who were not put on trial over the absence of evidence. Therefore after the prison’ s closure they will be fully free,” he said expressing an opinion that prisoners would hardly return to their fatherland for fear of being repressed.

In general, there are around 60 such criminals in Guantanamo.

The United States addressed to the EU with a request to provide them an opportunity to reside in Europe.

“However, this will happen only if they express such a wish,” Paet said.

Source: BBN

Economic crisis must not develop into political crisis

At a meeting with his Lithuanian and Latvian colleagues Vygaudas Ušackas and Maris Riekstins in Utena, Lithuania, Foreign Minister Urmas Paet emphasised that security-related and economic issues are very closely tied. “During this global economic situation, intensifying co-operation between Europe and the United States is very important in order to prevent the protectionist economic policies arising all over the world,” stated the Estonian foreign minister.
While talking about the NATO foreign ministers meeting occurring in Brussels next week, the foreign ministers agreed that future co-operation of the Baltic states with the USA will be a main factor in the stabilisation of the situation in Afghanistan. “Estonia, Latvia and Lithuania, alongside their European Union partners, can intensify their contributions in this endeavour,” said Foreign Minister Paet.
Foreign Minister Urmas Paet stated that the first priority for Estonia is the adoption of the common European currency, the euro. “This step would insure our economic stability, but there are also security aspects,” noted Paet. “This is one tool for fighting against unemployment, making us more attractive to investors because of the stronger euro,” Paet added.
The ministers discussed co-operation opportunities in the field of energy, which has become an even more important topic in the light of this year’s energy crises. Paet asserted that it is necessary to create a common Baltic energy market with functioning connections by 2013. “We also need to further develop the energy bridge between the Baltic nations and Sweden and the Visaginas nuclear plant project. We are satisfied that the European Union economic recovery plan includes support for strengthening energy security,” stated Foreign Minister Paet. “Currently the next step is to become integrated with the Nordic energy market,” he added.
At the invitation of the Lithuanian foreign minister, the foreign ministers also participated in a public debate on the topic “Experiences from five years in the European Union and NATO” in the Utena Library.

Source: Estonian Review

Swedes to help Bank of Estonia

Estonian bank and Riksbank, Swedish central bank, made a preventive agreement to guarantee financial stability and increase security on financial markets, Estonian central bank announced.  The capacity of the agreement is in amount of SEK 10 bln against EEKs (13.8 bln). The agreement increases Estonian central bank’s capability to secure liquidity in currency committee system.

“Preventive agreement with Riksbank is additional security besides high liquidity and capital buffers that Swedish banks’ subsidiaries currently have in Estonia. Today’s agreement with Riksbank is an evidence of the importance of cross-border cooperation in today’s world of integrated financial markets,” Andres Lipstok, the Governor of the Estonian central bank said.

Source: BBN

Construction volume decreased by a tenth

According to preliminary data of Statistics Estonia, in 2008 the total production of Estonian construction enterprises in Estonia and in foreign countries amounted to 35 billion kroons, which is 12% less than a year earlier.

The production value of building construction was 23 billion kroons and the production of civil engineering totalled 12 billion kroons. Compared to 2007 the volume of building construction decreased 17% and the volume of civil engineering stayed at the same level. The decline in construction was mainly caused by the decreased volumes in dwelling construction on domestic construction market. The recession and the restricted loan terms have decreased continuously the start with new dwelling construction projects. In 2008 building permits were granted for the construction of 5,500 dwellings, which is more than a third less than a year earlier.

Contrary to the domestic construction market which is on decline stage, in 2008 the construction volume in foreign countries increased by a tenth compared to the previous year. The growth was caused by the building construction. Although the construction in foreign countries increased, its influence on the construction activity was very small, accounting only for 6% of the total volume of construction.

According to the data of the Construction Works Register, the number of dwelling completions in 2007 was 5,300 — 1,773 dwellings less than in 2007. Like the trend of last years, three quarters of completed dwellings were situated in blocks of flats and every second dwelling had two or three rooms. The average floor area per dwelling increased compared to the previous year because the share of one-family houses grew. In 2008, the average floor area of a completed dwelling was 86 square metres, the year earlier 80. The majority of completed dwellings were situated in Tallinn, followed by the neighbouring rural municipalities of Tallinn and the city of Tartu.

In 2008, the number of completed non-residential buildings was 993 with the useful floor area of 1.0 million square metres. The useful area of commercial, office and industrial buildings increased the most. Compared to 2007, the useful floor area and the cubic capacity of completed non-residential buildings increased.

In the 4th quarter of 2008, the production value of construction amounted to 8.4 billion kroons, a fifth less compared to the 4th quarter of 2007, of which the construction of buildings decreased 23% and the construction of civil engineering 13%.

Change in construction volume index compared to the previous year, 1998–2008 (percentage)

Year In Estonia and in foreign countries of which in Estonia
1998 29 23
1999 -20 -13
2000 17 13
2001 6 5
2002 22 25
2003 6 8
2004 11 11
2005 23 20
2006 28 30
2007 14 12
2008 -12 -13
Source: Statistics Estonia

Loans overdue 3,6%

In January, the corporate and household loan and leasing stock declined by 1.1 billion kroons, i.e., 0.4%. The financing portfolio decrease was broad-based with the loan and leasing portfolio shrinking the most in respect of real estate related enterprises, trading companies and manufacturing companies. The mortgage loan portfolio reflects the low of the real estate market, which has partly been caused also by weaker property market activity characteristic of winter months. Repayments of earlier mortgage loans exceeded the volume of new loans for the second consecutive month. The mortgage loan portfolio volume dropped by 124 million kroons in January.

The volume of household and corporate deposits declined by 1.5 billion kroons, i.e., 1.4%, amounting to 104 billion kroons. Whereas household deposits grew by 111 million kroons to 53.9 billion kroons in January, the volume of corporate deposits shrank by 1.6 billion kroons. The annual deposit growth rate declined to 2.7%. The share of time deposits became even more prominent in the total volume of deposits in January – household time deposits accounted for 61% and corporate time deposits for 42% of the total deposit volume.

The deteriorating economic environment has brought along difficulties with paying back loans. The share of loans overdue by more than 60 days increased from the level of 2.9% of the loan portfolio in December to 3.6% in January. Nearly a half of the new loans overdue by more than 60 days recorded in January was credit to real estate related enterprises. The volume of mortgage loans overdue by more than 60 days grew by 453 million kroons (from 1.9% of the portfolio in December to 2.3% in January). The volume of overdue loans is expected to increase in the next months as well.

Te average capital adequacy of banks rose from 18.8% in December to 19.6% in January. Banks have used their recent years’ profits to form considerable capital buffers, which can be used to cover loan losses in the current complex economic situation.

International money market interest rates have continued to drop, which is beneficial for borrowers. As key interest rates fell, the average interest rate on new housing loans and long-term corporate credit issued in January sank to 4.9 per cent and 5.4 per cent, respectively. The decline in money market interest rates affects most of all earlier borrowers’ interest payments, which should shrink considerably in the next months.

Figure 1. Annual growth of financing portfolios by sectors

Figure 2. Corporate and household deposit volume and annual growth

Figure 3. Interest rates on new long-term mortgage and corporate loans

The financial sector statistics and publication calendar are available on the web site of Eesti Pank at

Article by Siret Vildo, Financial Sector Policy Division of Eesti Pank, Specialist in Charge

Source: Bank of Estonia

Kalev filed delisting request

AS Kalev submitted on February 23rd, 2009 to NASDAQ OMX Tallinn Stock Exchange an application for delisting AS Kalev shares. 

Management estimated that failure by Alta Capital Partners to execute food industry enterprise sales agreement concluded on 2007 to AS Kalev does not allow to execute business plans planned on fall 2007. Amongst other things AS Kalev does not see the opportunity to comply with freefloat requirement set by the rules of Tallinn Stock Exchange.

Resolution on satisfying or rejecting the delisting request will be made by Stock Exchange within three months as of submitting application of delisting request, by exception of the rules of Tallinn Stock Exchange resolution may also be made during six months.

Source: BBN

Spy is imprisoned for 12 years

Today Harju County Court found former high state official Herman Simm guilty for treason and sentenced him to prison for 12.5 years, writes.  Simm also has to pay EEK 20,155,000 for damages.

Source: BBN