570 Estonian defence personnel served on missions abroad in 2011

Overall 570 members of the Estonian Defence Forces served on missions abroad during 2011, of them 528 in Afghanistan. Of the remaining personnel, 30 served on a mission based in Djibouti, six in Iraq, four in Kosovo, and two in Bosnia and Herzegovina, military spokespeople told BNS. The personnel based in Djibouti serve on the EU’s anti-piracy mission Atalanta.

In the course of 2011 the Estonian infantry company ESTCOY-11 and the national support element NSE-10, the infantry company ESTCOY-12 and the national support element NSE-11, and the infantry company ESTCOY-13 and the national support element NSE-12 served in Afghanistan, deployed respectively in November 2010, May 2011 and November 2011. In addition to these units, a close protection team and staff officers serve in Afghanistan as part of the Estonian contingent.

In Iraq Estonian military personnel served on the NATO Training Mission.

Source: Estonian Review

Government endorses Greek bailout deal

At its extraordinary meeting on Wednesday, the Estonian government gave its nod to the new rescue package for Greece, the sole item on the session’s agenda, and forwarded the corresponding bill to parliament. Parliamentary approval of the memorandum of understanding to be concluded between the European Commission and Greece is required before the government can agree to provide financial aid to Greece through the European Financial Stability Facility (EFSF).

Representatives of euro zone countries have agreed in principle to the terms and conditions of the next bailout program for Greece for the period 2012-2014, which includes Estonia’s contribution via the EFSF.

Greece has agreed to implement austerity measures with the aim of reaching a primary surplus in 2014. It is also carrying out a privatisation plan that should bring at least 4.5 billion euros into the state coffers this year, 7.5 billion euros by 2013, and 15 billion euros by 2015. Other measures pledged by Greece as part of the deal include a tax reform and implementing structural reforms to promote economic growth, as well as better financial sector regulation.

Estonia did not take part in the first bailout put together for Greece in May 2010, out of which 73 billion dollars has been lent to the country by now.

Source: Estonian Review

Global uncertainty affects also Estonian economy

According to the preliminary data, the economic growth in Estonia was 4% in the fourth quarter of 2011, in yearly comparison, and annual growth amounted to 7.5%. GDP decreased 0.8% compared to the third quarter. Quarterly decrease can be explained by general increase in uncertainty in Europe as well as by individual factors in the small economy of Estonia.

The uncertainty of consumers and manufacturers has been increasing since the end of summer, which has affected also the exporting industry of Estonia. As to the value added, there was an increase in most of the fields of activity, in yearly comparison, income of the salaried employees increased and a sudden fall in security of consumers was no accompanied by a setback in consumer behaviour. The time of rapid growth will be over for some period.

Output of industry and especially of the manufacturing sector slowed down significantly in the fourth quarter. The growth was slowed down mostly by a sharp decrease in production targeted at the export of communications equipment and in power engineering. A year ago, production of communications equipment rose rapidly to the highest level of all times. Therefore, a sudden decrease in the production output in the fourth quarter had a hard and negative effect. Decrease in production in the field of power engineering was related to warm weather conditions at the end of the year and smaller demand in industrial sector. These caused a fall both in domestic consumption and in export. Economic activity was active in the field of trade and construction at the end of the year.

The growth in export slowed down in the fourth quarter, in yearly comparison, and it remained approximately at the same level as in previous quarter. This resulted from large export volume, which had increased already a year ago, and from the cooling economy of the trading partners. Weakening export is partly compensated by the demand in domestic market, as a result of which import growth exceeded export growth.

The employment income of the employees increased slightly more slowly in the fourth quarter than in the third one but the increase in consumer price index was also smaller at the end of the year, and thus actual employment income increased. Financial behaviour of the people was still very conservative regardless of the increased income, which resulted in decrease in loan balance and low level of loan turnover. In yearly comparison, a slight upturn has occurred in the market of housing loans but financing consumption with loans was executed less in the last quarter than a year ago. Regardless of that, private consumption stayed at relatively high level at the end of the year, which can be concluded from a steady growth rate of retail business and good receipt of consumption taxes.

Compared to the last year and a half, the figures related to increase are expected to remain quite modest within the coming quarters but a rapid slowdown in GDP growth rate should not be reflected equivalently in the income of the employees. The spring economic forecast will be published by the Ministry of Finance at the beginning of April.

Source: Estonian Ministry of Finance