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Vol 2, No 23
12 June 2000
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Estonian News Review
News from Estonia
All the important news
since 3 June 2000

Mel Huang

Politics and foreign affairs

German Chancellor Gerhard Schröder made his first visit to Estonia during the week, starting his "feel-good" Baltic tour. Though nothing too important was said, Schröder confirmed German support for Estonia's EU bid and lauded the country's integration process. Some Bundestag deputies accompanying Schröder said more on the NATO front, suggesting that Russian instability should prompt Baltic membership into NATO soon.

Schröder also brought along a large business contingent. Joking about the two countries' lackluster bilateral relations, Schröder said, "the problem between Estonia and Germany is that we don't have any problems." Schröder met with President Lennart Meri, Prime Minister Mart Laar as well as parliamentary officials. He also paid a visit to members of Mõõdukad, which harbours the same "third way" policy that his SPD has been pushing.

Foreign Ministers from the "5+1 Luxembourg Group" of EU frontrunners met in Ljubljana during the week. The group reaffirmed their commitment to be ready for the EU and called on negotiations to be completed by the end of 2001. The next meeting is to be held in Budapest later this year.

Tension within the ruling coalition's Mõõdukad party increased, when party chairman Andres Tarand all but told Economics Minister Mihkel Pärnoja to resign. Tarand challenged the work of Pärnoja, accusing him of not doing much to prevent monopolies in the energy sector. However, party members have come out in the press siding with Pärnoja, which does not bode well for the party that ran in last year's local election with the platform "Tarand for President!" The party itself is siding with the opposition over VAT for heating, which has infuriated their coalition members.

Speaking of VAT for heating, as Prime Minister Mart Laar gave the Riigikogu Finance Committee carte blanche to deal with the issue, the Committee decided to keep VAT at five per cent, delaying the rise to the full 18 per cent by a year. This has been called for by Mõõdukad and the opposition, and it looks like it will win, despite having most of the government's disapproval.

Foreign Minister Toomas Hendrik Ilves delivered his semi-annual foreign policy speech at the Riigikogu, where he discussed EU and NATO integration as well as priorities for Estonian foreign policy in the coming future. Ilves commended legislators for quickening the pace of legal harmonisation with the EU, but also said Estonia needs to take a larger role in Europe; for example, being a part of the proposed rapid-deployment force.

Ilves stressed the need to strengthen relations with Ukraine and help with its European integration. Ilves also said Estonia cannot put off opening an embassy in Turkey any longer. At the debate following the speech, Ilves suggested that Russia's own desire to join the WTO is linked to its dropping of the punitive double customs tariffs on Estonia. Estonia is a WTO member.

The US-Baltic Partnership Committee had their annual meeting in Tallinn during the week, hosted by Estonian Foreign Minister Toomas Hendrik Ilves and attended by US Deputy Secretary of State Strobe Talbott, Lithuanian Deputy Foreign Minister Vygaudas Ušackas and Latvian Foreign Ministry State Secretary Māris Riekstiņš. Talks focused strongly on economic and defence co-operation, as Talbott talked about the progress being made towards NATO integration in the Baltics. The joint communiqué also applauded continual war crimes prosecution, regardless of ideology and very much in defence of the prosecution of Nazi and Soviet war criminals. The latter infuriated Moscow.

Centrist Russophone politicians from the People's Trust coalition announced that they will form a new party, to be called the Russian Baltic Party in Estonia. A leader of the group, the respected MP Sergei Ivanov, said the group will be centrist and Esto-centric but will also deal with problems concerning the Russian-speaking population in Estonia. Ivanov's group is seen as an ally of Prime Minister Mart Laar and his coalition, as they serve together in the Tallinn city government.

In Lithuania's Karmelava, the headquarters of the joint Baltic airspace surveillance system, BALTNET, was opened on 6 June. Defence ministry and military officials from the Baltic countries as well as partner states (mostly NATO members, such as the United States and Norway), took part in the opening ceremony. Estonian Defence Minister Jüri Luik called it a step closer to NATO for the countries.

For some odd reason, Economics Minister Mihkel Pärnoja named Illar Hallaste as the head of the alcohol policy council. Hallaste is a disgraced politician and former clergy member who was suspended by the Lutheran Church for escapades with a prostitute. Hallaste was also suspended by the People's Party, which is now a part of Mõõdukad (Pärnoja's party).

Economics and business

Analysts were seriously disappointed when the Statistics Department announced that GDP in Q1 grew by 5.2 per cent from the same period in 1999. Despite predictions of a window of four to six per cent growth, most analysts were predicting a growth of (if not over) six per cent. However, other analysts say that the upgrade several weeks ago by the Statistics Department of GDP in Q1 1999 (revising to a loss of 3.3 per cent instead of the original 5.5 per cent) had a lot to do with the number not meeting expectations (perhaps saying something about many analysts' skills).

Trade dropped quite a lot in April, as total turnover fell to a total of EEK (Estonian kroons) 9.3 billion. The deficit remains high at EEK 1.5 billion.

Estonia's Ühispank became the first bank in the Baltics to activate full Wireless Application Protocol (WAP) service. Though the next generation of WAP-enabled units is still struggling to catch on in Estonia, the service could be the ice breaker for the hundreds of thousands of mobile users to upgrade.

President Lennart Meri confirmed former governor Vahur Kraft to head the central bank,
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after weeks of confusion and controversy. Kraft, originally defeated by statistics professor Vello Vensel, will return to the job two month after his term has expired. The media is screaming about the damage done to Estonia, after the wrangling between various officials, which brought Kraft back on the third vote. The media is also continuing to scrutinise, or rather, rumourmonger what happened in the background of all this mess.

The consumer price index rose by 0.2 per cent in the past month, mostly fuelled by rises in foodstuffs and transportation.

The government decided to liquidate the Võru free enterprise zone, calling it semi-legal and ineffective. The government may also do away with several other free enterprise zones, which are located in various parts of the country near the borders.

Finance ministers from the Baltic and Nordic countries met for their annual meeting in Tallinn. The issue of tax co-ordination was high on the agenda, with the divide between harmonisation and co-ordination a sensitive topic for many of the attendees. Estonian Finance Minister Siim Kallas spoke out against the harmonisation of taxation policies, saying that free but fair competition, like in business, is good for countries.

Social and local interest

A disturbing trend of schoolchildren drinking continues, according to a UN report. The report stated that in 1999 some 55.1 per cent of schoolchildren had consumed hard alcohol at least ten times in their lives, compared to the already high 43 per cent in 1995.

An estimated 5000 people took part in a human chain in the north-east of Estonia, protesting job cuts and social problems. The chain, stretching from Narva to Jõhvi, represented one of the largest protests in the last decade in Estonia. Union leaders and workers from the energy and mining sectors blasted government policies on privatisation, reorganisation and liberalisation in the sectors, saying thousands of jobs could be lost.

A poll by the Saar polling agency said that in April, some 19 per cent of non-ethnic Estonians supported Estonia's entry into NATO. This is a rise from 11 per cent in October, and eight per cent in May 1999. The results from 1999 were heavily influenced by the Russian media's reporting on the NATO campaign in Yugoslav, while the 2000 results are tied closely to the Chechnya campaign, according to pollsters.

Another poll by Saar suggested that if a referendum were held on EU membership now, some 34 per cent of the public would vote for it, while 26 per cent would vote against. This makes the large 27 per cent who said they didn't know very important. Support for EU membership is generally higher amongst the Russian-speaking population, reaching as high as 44 per cent.

Serious controversy arose when Interior Minister Tarmo Loodus all but labelled as criminal the Statistics Department, for its handling of sensitive data from the recent census. A watchdog group claimed that an illegal database was being made from the data, which the Department said was just a back-up mechanism and not a database. After Finance Minister Siim Kallas took the side of the Department, all relevant parties came to an agreement on how to proceed, defusing a possibly ugly situation. However, the Department did receive phone calls from the angry public demanding that their census forms be returned.

The official unemployment rate did not change, remaining at 5.2 per cent. The highest regional jobless rate remains in the north-eastern Ida-Virumaa at 9.9 per cent.

Estonia's newspapers are entering yet another price war, despite the losses incurred by all parties each time they do this. However, in April, Postimees remained the leader of the dailies (57,500) ahead of competitor Eesti Päevaleht (41,100). On the tabloid front, Õhtuleht remained in front (40,300) of Sõnumileht (27,100), as merger concerns continue. Among weeklies, the tabloid Eesti Ekspress remains popular (46,900), as well as the rural Maaleht (43,400). Business daily Äripäev had a circulation of 18,400.

People were shocked when a family of heroin dealers, including the 73-year old grandmother also suspected of selling the illicit drug, was arrested.

And in other news...

Prime Minister Mart Laar was at his provocative best when he suggested that Estonia's capital could move to Tartu. Condemnations poured in from all sides of the political spectrum and various other sectors and media. One famous commentator in Eesti Päevaleht joked in a column about moving the capital to Helsinki. Laar maintains that it was put out only to provoke a discussion. This comes after the government decided earlier this year to move the Education Ministry to Tartu, which was followed by a suggestion from some in the cabinet to move several other ministries to the southern university town.

The Riigikogu passed a law banning animal fighting. Apparently they were trying to stop people from organising bull fights in Estonia this summer. Cockfighting has not become popular in this part of the world, as the chicken is valued more for a nice meal.

A crazy situation occurred when a Lithuanian ship, the Zenitas, sank minutes after being released by the port pilot in Tallinn Harbour. The ship, en route to Rotterdam with minerals picked up in Tallinn, is registered in Honduras. One crewmember was killed. An investigation is proceeding.

World-famous pop group The Pet Shop Boys played in front of a gaga 13,000 strong audience in Tallinn. The gig was opened by Latvian sensation Brainstorm (of Eurovision fame). Then the already busy concert schedule (even for Estonian standards) got busier, as organisers announced that Tina Turner will play Tallinn on 12 August.

Sadly, famous Estonian composer Lepo Sumera died suddenly from heart failure the previous weekend. Sumera, a former culture minister, is a well-loved composer and teacher of composition (see this week's Amber Coast for a tribute to the late great music man). Sumera had recently turned 50.

Exchange Rates
As of 9 June 2000
Currency Estonian
1 US dollar 16.36
1 British pound 24.76
1 German mark 8.00
1 euro 15.65

[Up-to-date exchange rates]

Mel Huang, 9 June 2000

Moving on:

News sources

Baltic News Service (BNS)
The Baltic Times
Radio Free Europe/Radio Liberty
Reuters news on Yahoo
Eesti Päevaleht


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