Migration to Single Euro Payments Area (SEPA)

In Estonia, consumers, businesses and public sector institutions have been ensured with a smooth transition to SEPA.

Migration to SEPA in Estonia:

  1. Banks will complete preparations for full SEPA migration by 1 February 2014. Currently, of the entire payment traffic of Estonia, only cross-border euro payments within the EEA comply with SEPA technical and business requirements. After 1 February 2014, all payment orders will be changed to comply with SEPA.
  2. Estonia is going to use a one-year transition period (until 1 February 2015 with an option to extend it for a further 12 months). During that time, banks may provide payment conversion services to consumers (changeover to the IBAN format) and businesses (changeover to the ISO 20022 XML format). The transition period is necessary because banks will be unable to complete their respective preparations by 1 February 2014, so consumers and businesses cannot be required to adapt to changes at the same time.
  3. Estonia will not migrate to SEPA direct debits. Instead, a new payment service based on e-invoicing and SEPA credit transfers will be launched (called the e-invoice standing order service). The provision of the domestic direct debit service will terminate on 31 January 2014. The transition to the new payment service will start in the second half of 2013.
  4. SEPA direct debits will be introduced as a separate service. The service will be made available for payers, enabling them to pay for products and services purchased from Europe on a cross-border basis. In providing the service, banks must ensure payer protection measures as stated by the SEPA regulation (for example, direct debit periodicity, limit, blacklist).
  5. SEPA communication, press relations. Eesti Pank supports information activities and press relations using their own channels – the Estonian Payment Forum, press releases, press events, homepage. Banks use their own channels to communicate with customers and they organise seminars. Currently no media campaigns are planned.

Read more from Bank of Estonia website

Estonia’s general government debt leaped up in 2012

According to preliminary data of Statistics Estonia, in 2012 the Estonian general government sector deficit was 0.3% and the gross debt level was 10.1% of the Gross Domestic Product (GDP).

At the end of 2012, the total expenditures of the general government exceeded the revenues by 54.3 million euros, accounted as the Maastricht deficit criteria. The deficit of central government amounted to 135 million euros and in local governments’ sector, after ending in surplus in two previous years; in 2012 the expenditures amounted to 38.4 million euros more than revenues earned. The surplus of social security funds was 119.1 million euros, slightly less than in 2011 (-19%).

The level of central government’s expenditures was influenced the most by the expenses made in the account of proceeds from assigned amount units received in previous years (199 million euros) and the investments on the construction of roads: built roads worth 96 million euros were counted as state’s fixed assets in 2012.

The general government consolidated debt (Maastricht debt) rose nearly two times by the end of 2012: from 996.2 million euros to 1.7 billion euros. The lion’s share of the increase resulted from the rapid growth in volume of central government’s long-term debt. Considerable role in this was played both by the loan from the European Investment Bank in amount of 385 million euros, taken for the construction of roads and co-financing the foreign projects, as well as by the involvement in the European temporary rescue mechanism, EFSF (European Financial Stability Facility). In 2012, the total liabilities towards the EFSF comprised 355 million euros, the biggest share of which (84%) constituted the participation in rescue package for Greece. In 2011, the share in EFSF, meant for the assistance of Ireland and Portugal was 13.7 million euros.

The overall debt level of local governments grew by 5% compared to the previous year. The volume of both short-term and long-term loans increased by 8.4% in total, at the same time the volume of the securities other than shares decreased by 4%. At the end of 2012, the social security funds did not contribute to the general government sector debt at all, as both the Unemployment Fund and the Health Insurance Fund did not use loanable money for financing their activities.

Since spring 2013, the calculations of Maastricht debt and deficit levels include also the estimations of SA KredEx, as the unit is reclassified to the general government sector after the consultations with Eurostat, because the unit is acting as the non-market producer. Statistics Estonia will conduct further calculations concerning all government finance statistics by the time of publication of relevant statistics in September.

Read more from Statistics Estonia

Hiring specialists from abroad becomes easier

Hiring of a top specialist from abroad will soon become easier and the necessary permits would be issued within a few weeks, according to the draft amendment to the Alien Act that was prepared by the Ministry of Interior, writes Äripäev.

The new system would amend the provisions on how top specialists, researchers and lecturers and students can set up residence in Estonia.

The main difference from the current system is that employers can apply for the residence permit for the foreigner once he or she has arrived in Estonia.

However, one precondition for use of this simplified procedure is that the employer pays the top specialist at least Estonia’s average wages.

Read more from BBN

Tere Dairy group posts 4.5 MEUR profit

AS Tere, the dairy group belonging to Estonian businessman Oliver Kruuda, earned a net profit of 4.51 million euros last year compared with a loss of 2.44 million euros sustained in 2011. Sales in 2012 dropped to 80.3 million euros from 109.9 million euros in 2011.

Operating profit totalled 3.92 million euros in 2012, whereas the operating result for 2011 was a loss of 5.49 million euros. Net financial expenses declined to 2.35 million euros last year from 2.66 million euros the year before.

Tere’s pre-tax profit was 1.57 million euros last year and 8.15 million euros in 2011.

The average number of workers last year was 512 compared with an average workforce of 648 employed in 2011. As at the end of 2012 the number of workers was 464, compared with 598 at the same time a year earlier.

Labour costs totalled 8.17 million euros in 2012 and 9.63 million euros in 2011. Remuneration paid to members of the management board and the supervisory board totalled 128 000 euros in 2012 and 101 000 euros in 2011.

Source: BNS news in weekly Estonian Review

Foreigners own less than 3 pct of housing in Estonia

According to the 2011 census report, foreigners own 2.3% of housing in Estonia, writes Eesti Päevaleht.

By regions, the highest percentage of foreign-owned housing units are in Narva-Jõesuu, the resort in Northeast Estonia where foreigners, mainly Russians, own 240 housing units or 12.8%.

Read more from BBN

Estonian skier Veerpalu cleared of doping charges

The Court of Arbitration for Sport (CAS) on published on March 26 its ruling in the case of Estonian skier Andrus Veerpalu, clearing the two-time Olympic gold medallist of doping charges, BNS news reported.

The sports court satisfied the appeal in the case of Veerpalu vs. International Ski Federation (FIS) and overturned the FIS decision of 22 August 2011 that found the skier guilty of doping and banned him from competing, the Aivar Pilv law office representing Veerpalu said.

The publication of the decision was delayed because the rule is that decisions have to be first released by the CAS itself, but the court’s website suffered from an overload due to huge public interest, Veerpalu’s representatives said.

The doping saga goes back to the end of January 2011 when officials from the World Anti-Doping Agency (WADA) took a post-training sample from Veerpalu, who was preparing at the time for the Oslo World Championship at Otepää, Estonia. The positive result of the test for human growth hormone was initially kept secret from the public, with Veerpalu announcing that he would not take part in the championship and would end his career.

That both the A and B sample from Veerpalu had tested positive was announced at a press conference convened by the Estonian Ski Association in April 2011.

FIS slapped a three-year competition ban on Veerpalu in summer 2011. The skier who has firmly denied wrongdoing appealed the decision with CAS.

Source: BNS news in Estonian Review

Lake Peipsi fish stocks in good shape

Contrary to the allegations voiced by the politicians who filed the inquiry about Lake Peipsi fish stocks, the fish stocks of the border lakes between Estonia and Russia are in good shape according to scientists, Estonia’s Environment Minister Keit Pentus-Rosimannus said in parliament during the information session Monday. “Speaking of yields and catches, catches have actually grown by about 30 percent over the past five years. From the viewpoint of the incomes of fishermen, it’s definitely important too that the value of the catches has almost doubled,” Pentus-Rosimannus said.

She said scientists from Estonia conduct joint surveys of fish stocks in the border lakes together with experts from Russia every year and measures have been taken to improve surveillance, such as by imposing the requirement for advance notice of arrival for fishers and electronic monitoring of boats engaging in demersal seine fishing.

Total catches from the interconnected border lakes, or Peipsi, Lammijärv and Lake Pskov, have climbed from 2 100 tons in 2008 to 2 700 tons last year. Thanks to increased catches of perch pike and Perch, the value of the annual catch soared from an estimated three million euros in 2008 to 5.3 million euros last year,” the minister said.

European smelt is the only fish species the numbers of which have fallen drastically and a ban has been imposed on smelt fishing, Pentus-Rosimannus said. According to experts, the drastic decline in stocks is attributable to increases in the numbers of predatory fish and changes in environmental conditions. The other endangered species is the Peipsi whitefish, the numbers of which have decreased too as a result of unfavourable environmental conditions.

The minister said that since farm-raised young fish are easy prey for predatory species, one should resort to native fish stocking, or releasing in natural bodies of water of young fish reared in fish farms only in extreme cases. A more efficient means is natural reproduction combined with bans and restrictions. Native fish stocking is justified now in the case of Peipsi whitefish only, said the minister.

She also said that the practice of imposing quotas on catches for the whole year had to be changed because the quotas were exhausted quickly at the beginning of the year. Now yearly quotas have been split in two.

“Looking at the increase in catches and improvements in the situation of fish in Lake Peipsi in general, right decisions have been made in previous years,” Pentus-Rosimannus said.

Source: BNS news in weekly Estonian Review