Central Europe Review The International OSI Policy Fellowships (IPF) program
Vol 2, No 27
10 July 2000
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Estonian News Review News from Estonia
All the important news
since 1 July 2000

Mel Huang

Politics and foreign affairs

President Lennart Meri is back in the headlines, with the removal of Lieutenant General Johannes Kert from the post of Defence Forces commander. The move, though not surprising, shook the political scene in the country, as opposition accused Meri of not abiding by legal norms. Defence Minister Jüri Luik also came under heavy attack from the media. The President named Lieutenant Colonel Aarne Ermus the acting commander. Though General Kert has been discharged to the reserves, the Riigikogu still has the final say, when it reconvenes in August (see this week's Amber Coast, for more on this scandalous story of abuse of power and confusion).

Following all the public noise and anger, President Meri convened a meeting of the Defence Council. Though members of the council said they accepted Meri's explanation, the details have been kept secret, and not much has come out. Rumours by the press suggest the reason Kert was pushed out was due to his objection to unsound promotions suggested by Meri, especially the promotion of Colonel Märt Tiru, the acting commander for the last six months, to Brigadier General.

Prime Minister Mart Laar held a meeting in St Petersburg with Russian Deputy Prime Minister Valentina Matviyenko, as chairpersons of their respective sides on the bilateral consultations committee. The talks were low-key, with a "get to know each other" feel, though both sides are cautiously optimistic that relations will improve. In addition, agreements on road transport and aviation were also signed, and discussions on building a new bridge over the Narva River also proceeded.

Georgia (Sakartvelo) has expressed interest in sending its officers to the Baltic Defence College. The first multinational class of the College in Tartu recently graduated. Georgia has hinted that it is interested in co-operation with NATO, and has used the Baltic example in defence co-operation to drum up similar programmes in the Caucasus.

Economics and business

An Estonian and Latvian working group on energy co-operation concluded that the best scenario for power companies Eesti Energia and Latvenergo is to merge. The deal, which could be worth hundreds of millions of euro when it is finally consummated, has generated increasing debate on the privatisation of Latvenergo (in Latvia) and the sale of the power plants to NRG (in Estonia). The early plan foresees an equal division of shares, and the registration of the company in a third country (ie. the Netherlands).

The upper management of Eesti Energia has all but sealed its fate, as it told the press that it will refuse to sign the deal to sell 49 per cent of the country's main power plants to US-based NRG Energy. Management lobbied against the deal for weeks before its approval and suggested that it would be damaging to Estonia's development. Others speculate that it would only dilute the stance of the company, as it goes into talks with Latvenergo, something the overly ambitious executives of Eesti Energia have been looking hard at.

Estonia's trade deficit grew in May, but total trade also shoots up. A deficit of EEK (Estonian kroons) 1.94 billion (USD 118 million) was registered for the month, but overall trade grew by EEK 1.3 billion.

At the end of May, the budget deficit was about 0.95 per cent of GDP. However, at mid-year, the budget collection is at 45.12 per cent of expected revenues.

The heating utility of the southern city of Valga, Valga Soojus, has been earmarked for privatisation by the city council. Bidding for the full stake of the company will begin at EEK 15 million. The likely contenders are Finland's Fortum (which has taken several other heating utilities in Estonia), Sweden's Vattenfall (recently spurned on their attempt to take the heating utility in Kaunas, Lithuania) and France's Dalkia (which moved into the empty Kaunas situation and has gobbled up several other heating utilities in the Baltics).

Will the other companies challenge the strong stance of Fortum in Estonia? Small privatisation deals could set a new trend.

The challenge was seemingly taken by Fortum, as they managed to take over another heating unit in Estonia. Viru Energia, owned by Fortum and Ühispank, announced a merger with Kohtla-Järve Soojus (Kohtla-Järve Heating), which is owned by Eesti Energia and the city.

The Statistics Department reported that agricultural production dropped by eight per cent in 1999.

The small ELK Airlines have began normally scheduled flights between Tartu and Helsinki. The thrice-a-week trip is being made in a small Czech-made airplane.
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The company also plans to restart the Tallinn-Warsaw route, which was abandoned by Polish airlines LOT years ago.

Estonia's banks announced that there are 195,000 e-banking customers in the country, which is nearly 15 per cent of the population.

The Taxation Department announced that there are 164 individuals that earned more than a million kroons in 1999, down from 179 in 1998. About 323,000 people got some amount of refund for overpayments, though about 27,000 poor souls had to cough up more taxes.

Social and local interest

In a rare move, two rival tabloids have merged. The yellowish evening paper, Õhtuleht, and the leftist-turn-tabloid daily, Sõnumileht, have merged and begun to produce a new paper, SLÕhtuleht. The new paper looks very much like Õhtuleht in style and content, perhaps indicating that it was not as much a merger as it was a closing down of the other.

Postimees remains the most-read daily in Estonia, although readership dropped to 56,700, followed by competitor Eesti Päevaleht, at 42,400. The slow summer season also hit other papers, including weekly Eesti Ekspress, which dropped to 47,000. This is also the last full month to calculate the individual circulation of the merged tabloids: Õhtuleht, at 40,000, and Sõnumileht, at 28,900.

Tourism numbers dropped surprisingly by 17 per cent in Q1 2000, down to an estimated 211,400 total.

There is anger among young people, as the military is not equipped to take them in, following legal changes. A new law makes it mandatory for university students to serve in the military, but gives them a choice when to do so. However, the Defence Ministry did not plan for such a response from those who want to do their duty before going to university and can not find place for all the young conscript wannabes.

And in other news...

An immense tragedy occurred at a motorcycle rally in Tallinn, as five-time world champion Joey Dunlop was killed when he skidded at a turn. Officials blamed the tyres used on the rainy and slippery day. His death was especially mourned in Northern Ireland, as the Ulsterman was a national hero.

Hard rock veterans Iron Maiden played a highly energetic show in Tallinn as a part of their reunion tour. Lead singer Bruce Dickenson, a crowd favorite from previous appearances, called loudly in Maiden-trademark-style, "Scream for me, Tallinn!" The day before, members of the band and crew played in an "all-star" friendly Estonian football match. The band lost 1:7, but a freaky incident left goalkeeper and Derby County team member Mart Poom down and in a minor concussion.

It just seems hard to believe, but the same Estonian Air plane that was damaged a week earlier at its Tallinn hanger was damaged again in an accident at Kastrup Airport in Copenhagen. The airline had to lease a plane from its mother company, Maersk Air, to prevent massive flight cancellations.

The rather skinny Margo Uusorg won this year's wife-carrying contest in Sonkajärvi, Finland, beating a sumo wrestler from Korea, among others. Prizes included the weight of the "wife" in beer. Estonia also came in second in the national competition.

A local tabloid (there's only one now) reported that topless sunbathers in Tallinn can be fined up to EEK 2300. Even those lying on their stomachs but are "topless" could be fined.

Exchange Rates
As of 7 July 2000
Currency Estonian
1 US dollar 16.45
1 British pound 24.79
1 German mark 8
1 euro 15.65

[Up-to-date exchange rates]

Mel Huang, 7 July 2000

Moving on:


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



Baltic Focus:
Mel Huang

Prekevičius & Clark
Lithuania's Looming Elections

Aet Annist
Estonia: Progress without Protest

Mel Huang
Military Brass Shuffling in Estonia

Artūras Račas
Calvin Klein and Communism

Mel Huang
Lithuania: A bananos respublika?

Teri Schultz
Reflections on a Revolution

Meelis Kitsing
Online in E-stonia

Arnis Gross
Latvia Logs On

Razeen Sally
Estonia and the EU

Hubert Jakobs
Livonian folk band Tulli Lum

Mel Huang
Baltic BeBop

Bernd Jahnke
Lithuanian Jazz

Artis Pabriks
Rīga's Revenge

Kurt Mortensen
Estonia's Art Music Scene

Mel Huang
Schizoid Lamb

Howard Jarvis
The Writings of Jurga Ivanauskaitė

President Vaira

Prime Minister
Mart Laar

Lithuanian Military Commander Jonas Kronkaitis

Oliver Craske
Lords Return Roma to Skinheads

Andrew Cave
Poland's Collapsing Right

Catherine Lovatt
Next Target: Montenegro

Sam Vaknin
Balkan Faith

Wolfgang Deckers
Germany in the Balkans

Culture Calendar: