Estonians receive euro calculators

On November 5, Estonian Post started to deliver into mailboxes euro calculators that enable to convert kroons to euros. Delivery will be completed by November 17.

Euro calculators will reach 561,000 mailboxes so that every household will receive one. The first to receive the calculators were the people in Võru County in southern Estonia.

The calculators are made in China. The whole project will cost the taxpayer over 300,000 euros. Each calculator has a warranty that is effective until September 15 2012.

Read more from BBN

Estonia to repay 21-year-old loan from Latvia

The Estonian government Thursday decided to allocate more than two million kroons from its reserve in order to repay to Latvia a loan received 21 years ago.
According to an order of the government, 2 093 071 kroons will be allocated to repay a loan the Estonian Consulate General received from the Latvian Embassy in Washington in 1989.
The Estonian Consul General in New York, Ernst Jaakson, recalled that the financial situation of the Estonian diplomatic representation was poor. “The finances of the state on which we had been subsisting were running out. Survival of the representation was under a question mark,” Jaakson wrote in his book, “To Estonia”, published in 1995. Jaakson said in his memoirs that he had turned to his Latvian colleague Anatol Dinbergs for help. “So we got a one-off loan of 185 00 dollars, on which we didn’t have to pay any interest according to Dinbergs’s promise.”
Some time ago an appeal was published in the daily Eesti Päevaleht that by the anniversary of the Latvian state Estonia could repay its debt to Latvia, which is dire straits at present. The Latvian Independence Day is on 18 November.
Estonian Prime Minister Andrus Ansip said at the government press conference on Thursday that the government decided to repay the money to Latvia as there was sufficient documentary proof of the loan. The prime minister said that it was a mistake that the loan had been overlooked such a long time. “We would have been able to repay the loan long ago. The issue arrived on the desk of the present government in a relatively unusual way – from the ambassador’s memoirs it came to Eesti Päevaleht and from Eesti Päevaleht to the Finance Ministry. I have spoken with my colleague [Latvian Prime Minister Valdis Dombrovskis – BNS] about it and have asked him to look for documents of the period. The loan relationship has been sufficiently proven for the state to repay the 185 000 dollars,” Ansip said.

Source: Estonian Review

The non-financial sector’s borrowing ability has improved

Starting from autumn 2010, Eesti Pank starts publishing biannual reviews of financing and lending in the non-financial sector. The reviews cover banking and leasing statistics, financial accounts analysis and credit supply and demand.

Both the Estonian economy and non-financial-sector confidence have gradually recovered over the first three quarters of the year. The balance sheets of companies and households have gained in strength and the borrowing ability has improved. At the same time, the activity of both households and companies in the domestic credit market has remained subdued. The financing of the real estate and construction sector has decreased the most, whereas the borrowing activity of industrial and trading companies has increased.

Although domestic credit demand has declined, companies’ direct borrowing from abroad has hiked. Among other things, this refers to the fact that the risk premium on the non-financial sector’s credit has increased considerably more in Estonia than in the Nordic countries. The difference has not contracted much in 2010, either.

The economic crisis considerably increased the risk aversion of banks and they became more cautious in selecting their customers. Banks are currently regulating the loan supply primarily through different risk premia, while no constraints have been set on the number of new loans. The general high level of interest margins shows that banks wish to keep lending-related risks in check in the current economic phase. At the same time, banks have not established any direct constraints on financing credit demand, while they appear to be ready to increase the level of loans and also competition between themselves.

In the coming months, the situation of non-financial sector financing will probably be stable. It is likely to gain momentum again in the first half of 2011, when the recovery of economic activity and non-financial sector confidence will also be reflected in higher credit demand and tougher competition between banks.

The Lending Survey is available here.

Source: Bank of Estonia

Exports were the biggest of the last two years

According to Statistics Estonia, in September 2010, exports of goods from Estonia amounted to 13.2 billion kroons (841 million euros) and imports to Estonia totalled 13.5 billion kroons (860 million euros) at current prices. The turnover of exports was on a similar level last in October 2008.

This September compared to September 2009, exports of goods grew by 40% and imports by 35%. Exports increased by 3.7 billion kroons (239 million euros) and imports by 3.5 billion kroons (223 million euros) compared to September of the previous year.

The trade deficit amounted to 0.3 billion kroons (18 million euros) in September. The trade deficit decreased nearly two times compared to September of the previous year.

The value of goods exported from Estonia to the European Union (EU) countries amounted to 9.2 billion kroons (590 million euros) accounting for 70% of Estonia’s total exports. Exports to the EU countries increased by 41% compared to September of the previous year. Exports to non-EU countries or the so-called third countries increased by 37%.

Imports of goods from the EU countries to Estonia totalled 11.3 billion kroons (722 million euros) with the share of 84% of Estonia’s total imports. Imports from the EU countries increased by 39% compared to September of the previous year. Imports from the third countries increased by 20%.

The trade deficit with the EU countries amounted to 2.1 billion kroons (133 million euros). The surplus of 1.8 billion kroons (144 million euros) was announced in the trade with the third countries.

In September compared to August 2010, exports grew by 18% and imports by 10%.

Estonian foreign trade, January 2008 – September 2010

Diagram: Estonian foreign trade, January 2008 – September 2010

Statistics Estonia releases the first estimates about foreign trade on the 40th day after the end of the reference period. The estimates are revised on the 54th day. On the 23rd of November, Statistics Estonia will release a more detailed overview about foreign trade in September. The trade data in euros have been published in the Statistical Database.

Source: Statistics Estonia