Estonian Review E E S T I R I N G V a a D E VOLUME 18 NO 22 MAY 21- MAY 27TH, 2008

Estonian Review E E S T I R I N G V A A D E VOLUME 18 NO 22 MAY 21- MAY 27TH, 2008

FOREIGN NEWS FOREIGN NEWS Estonian Soldier Dies of Injuries Sustained in Afghanistan May 24 - An Estonian non- commissioned officer who sustained heavy injuries in an accident in Afghanistan's southern Helmand province on the evening of May 23 rd died in hospital in the night. Sgt. Maj. Ivar Brok, 30, serving in the support unit NSE-5 of the Estonian contingent in Afghanistan, sustained life-threatening injuries in an accident that happened in the course of loading works at the Camp Bastion base, the General Staff here reports. Brok was loading equipment of the infantry platoon ESTCOY-6 onto trucks when a wheel of a Pasi armoured personnel carrier escaped and rolled on him. Such a wheel weighs several hundred kilograms. Foreign Ministers Urmas Paet and Carl Bildt emphasized positive Estonian medics gave first aid to Estonian-Swedish foreign relations at their meeting in Stockholm the sergeant who was badly injured Estonian, Swedish Foreign Ministers Underline and took him to the Camp Bastion field hospital. He was airlifted from Importance of EU's support to Georgia the field hospital to the higher-level May 21 - Foreign ministers of Estonia and Sweden confirmed after military hospital in Kandahar by a meeting in Stockholm that they consider the European Union's British medics later that evening. support to Georgia very important. Despite medics' efforts, Brok's life The ministers stressed the need to conclude EU-Georgia visa could not be saved. facilitation and free trade agreements. "Losing any comrade is tough "It would be to Georgia an additional clear sign of the European on the team, the thoughts of Union's support," Urmas Paet, the Estonian minister, said. Estonian soldiers serving in "The reports of exchanges of fire in Georgia are highly worrying," Afghanistan are with the next of kin Paet said. "The sovereignty and territorial integrity of Georgia must be of Sgt. Maj. Brok," the chief of the respected and provocations are inadmissible." Estonian contingent in Afghanistan Paet and his Swedish colleague Carl Bildt also talked about the post- Lt. Col. Alo Valdna said. "Nobody is election situation in Serbia and Kosovo. In their words, closer ties safe from accidents. Ivar Brok was between the Balkans country and the EU could be built with the help of a an experienced soldier, he was pro-Europe coalition. participating in the Afghan mission "The West Balkan countries also should have the opportunity to move for a second time, but unfortunately fast towards visa freedom with the EU," Paet said. he died as the result of a tragic He added that Estonia has contributed to the development of the accident while doing his duty." West Balkans mainly by sharing its EU accession and reform experience Estonian troops remembered Brok which the Baltic state is prepared to continue. Estonia is also making a with a moment of silence Saturday contribution to the EU's soon-to-begin civilian mission in Kosovo. morning. Flags of the units stationed The ministers underscored that the Estonian-Swedish relations are in Helmand are flying at half-staff. very good and busy. The commander of the defence At a reception held at the embassy in Stockholm Paet handed over forces, Lt. Gen. Ants Laaneots, Estonian state decorations to Stefan Stromberg for promoting the ordered the military police division of cooperation of the two countries' police forces, Henno Kirikmae and the General Staff to open an Christofer Gyllenstierna for supporting Estonia's Euro-Atlantic investigation to establish the integration. circumstances of the accident.

FOREIGN NEWS The main alternative to Russia in guaranteeing the stability of the energy supply for Europe is Ansip Sees Nuclear Energy as Alternative supplies from the Caspian Region, said Ilves. to Fossil Fuel The presidents of Estonia, Latvia, Lithuania, May 23 - Estonian Prime Minister Andrus Ansip Poland, Ukraine, Georgia, and Azerbaijan approved a said that Estonia views nuclear power as a declaration as regards the creation of an energy considerable alternative to fossil fuels. transit corridor between the Caspian Sea, Black Sea "Nuclear energy definitely is a considerable and Baltic Sea regions. carbon dioxide emissions free alternative to fossil "With the discussions in Kiev, we are taking a big fuels," Ansip said at the meeting that brought step in the direction of guaranteeing energy security together eight heads of government from central for Europe," the Estonian head of state said. Europe and the prime ministers of Estonia, Latvia Ilves said that energy-related cooperation must and Lithuania. be based on the principles of the Energy Charter Nuclear energy is one of the possibilities allowing Treaty. In energy trade, both supply and transit the diversification of sources of energy in order to countries must act in conformity with good foreign ensure energy security. It also gives Estonia a trade practices and refrain from using it as a means greater opportunity to reach the goals set out in the of applying political pressure, he added. EU climate package, Ansip said. In addition to the presidents of the Baltic While Estonia backs the EU goals related to countries, Poland, Ukraine, Georgia, and Azerbaijan, climate change, to ensure energy security one has the Kiev summit meeting was attended by Andris to preserve domestic generating capacities covering Piebalgs, the European commissioner for Energy, the country's own demand, he said. and representatives of the United States, Bulgaria, In this connection Estonia wishes to preserve oil Kazakhstan, Romania and Slovakia. shale fuelled energy generation in the longer term, even though its share will definitely be reduced Members of Russian Federation Council because of the wish to cut down emissions, the Visit Estonia prime minister said. The heads of government found that while May 26 - Members of the foreign affairs and nuclear energy is a global phenomenon, every EU economic committees and the Estonian- member state has the right to choose its sources of Russian group in the Estonian parliament in energy on its own. Tallinn met with two members of the Russian It is important, however, to increase energy Federation Council. security by having a well functioning domestic Boris Listov, Deputy Chairman of the foreign energy market, which can be created after sufficient affairs committee in the Russian Parliament's upper links have been established between member states, house, the Federation Council, and member of the they said. finance committee Boris Listov are on a non-official The meeting that took place during the run-up to visit to Estonia at the invitation of the Reformist MP the session of the EU Council in June also dealt with Urmas Klaas, chairman of the economic affairs the enactment of the Lisbon Treaty next year. committee. Commission President Jose Manuel Barroso The meeting focused on Estonian-Russian expressed the hope that the Lisbon treaty will be relations in the political, economic and cultural ratified in all the member states and the EU will be spheres. able to move ahead with necessary reforms. Both Estonian and Russian MPs expressed the Among other things, the priorities of the Czech wish to overcome bottlenecks in relations between presidency were laid out at the meeting, along with the two countries and to work for closer direct the topics to be discussed at the upcoming EU contacts between the parliaments as well as the summit. governments. The prime ministers considered it important to The deputy chairman of the foreign affairs deal in more depth in the future with the impact committee recalled that delegations of the two from the rise in food prices. countries' parliaments met at the invitation of the foreign affairs committee of the Federation Council in 2006 in Pskov. Caspian Region Provides an Alternative to Eesmaa proposed continuation of contacts Russia for Europe's Energy Supply - Ilves between the foreign affairs committees already in May 23 - The Caspian region serves as an the coming fall by a visit of a delegation of the alternative to Russia in terms of energy supply foreign affairs committee of the Federation Council for Europe, Estonian President Toomas Hendrik to Estonia. Ilves said at an energy summit in Kiev. In the economic affairs committee the talk "The European Union must speak about energy focused on long queues at the Estonian-Russian issues with one voice and act as a common target border, construction of a new bridge across the market -- only then is it possible to resist the border river of Narva, opening of a logistics centre attempts of any country to use energy supplies to and of launching air traffic between Tallinn and St increase their political profile," Ilves was quoted by Petersburg. spokespeople as saying at the meeting of seven Klaas proposed the organization of an Estonian- presidents in the Ukrainian capital. Russian economic forum under the direction of both Nord Stream and South Stream, the new gas the countries' economic affairs committees. lines offered by Russia, are new supply channels, Meeting with the Estonian-Russian parliamentary but do not help Europe to diversify its suppliers and group issues pertaining to cultural exchange were thereby increase energy security, he said. touched upon. Peeter Tulviste, chairman of the group from the Pro Patria and Res Publica Union for cyber defence in Estonia. The founders are underlined the need to open both the countries Estonia, Germany, Italy, Latvia, Lithuania, Slovakia archives for historians. and Spain. Gisladottir and her Estonian counterpart, Urmas Estonia Joins Kosovo International Paet, also spoke about airspace patrolling. Steering Group Paet said at the joint news conference that Estonia and Iceland are in a similar position rd May 23 – Estonia, on May 23 became a regarding airspace policing: neither of the small member of the International Steering Group countries have an air force of its own, so both rely (ISG) on Kosovo, a body aimed at promoting on NATO assistance to protect their skies. the democratic development of Kosovo and the In his words, the two countries can cooperate in establishment of a multi-ethnic state of rule of airspace security above all by looking for common law, the Estonian Foreign Ministry said. solutions within NATO, a view with which the In the words of Estonian Foreign Minister Urmas Icelandic minister agreed. Paet, Kosovo needs all-round international support According to Gisladottir, Iceland's and Estonia's and help to build up the state. situation differs in that Iceland lies in the far north He said that in order for the exhilaration of and does not have Russia for neighbour. She independence not to turn into anger and observed that Iceland lacks an army and the dissatisfaction arising from economic and tradition of own armed forces has not developed in administrative worries, Kosovo needs to put the island state. emphasis on the solving of economic and social "This is surely one of the reasons why Iceland problems. placed at the top of the Global Peace Index released "Estonia is ready to help Kosovo in solving the a few days ago as the world's most peaceful challenges that stand in front of it," said Paet. country," Gisladottir said. He added that Estonia was sending seven experts to Kosovo as part of EULEX, the European Union's Estonian Ambassador to Canada Presents mission of rule of law. The creation of an International Steering Group Credentials has been set out in the plan of Martti Ahtisaari, May 21 - Ambassador of the Republic of Estonia former president of Finland, for the regulation of the to Canada Väino Reinart presented his issue of Kosovo. credentials to Governor General of Canada Under the plan, the members of ISG will appoint Michaëlle Jean on Wednesday, 21 May. a common civilian representative to Kosovo. At the In the discussion following the credential presenting same time the EU Council will appoint a special ceremony, Reinart and Jean discussed the state of representative to Kosovo. In accordance with Estonia-Canada bilateral relations, including Ahtisaari's proposals these roles are performed by opportunities for co-operation within international one and the same person, currently Peter Feith of organisations, as well as European Union-Canada the Netherlands. relations. The powers of the common civilian representative Governor General Jean and Ambassador Reinart will last until ISG finds that the plan of Ahtisaari has acknowledged that Estonia-Canada relations have been carried out. been good throughout history. Over the years, Canada In addition to Estonia also Bulgaria, Ireland, became home for many Estonians that were forced to Latvia, Luxembourg, Holland and Poland joined the leave Estonia following World War II. Canada and ISG on May 22. Estonia participate in many joint international Other members of the group are Austria, operations, including in the southern part of Belgium, the Czech Republic, Denmark, Finland, Afghanistan. France, Germany, Hungary, Italy, Slovenia, Sweden, Ambassador Väino Reinart was born on 28 Switzerland, Turkey, the United Kingdom and the December 1962 in Kuressaare. He graduated from the United States. control engineering department of Tallinn University of Technology, was a post-graduate student of physics in Iceland Considering Participation in the Estonian Academy of Sciences’ Chemical and Estonian Cyber Defence Centre Biological Physics Institute, and completed the arms control and security policy course at the Geneva May 22 - Iceland is considering participation in the Graduate Institute of International Studies. Reinart has NATO centre of excellence for cyber defence worked at the Estonian Foreign Ministry since 1992, established last week in Estonia but has made no serving as the Estonian delegation leader for firm decisions yet. negotiations with Russia, director of the political The visiting foreign minister of the island state, department, and the permanent representative of Ingibjorg Solrun Gisladottir, said that she cannot say Estonia to the Organisation for Security and Co- anything definite about her country's participation in operation in Europe (OSCE). He has also been the the centre as no decisions have been made. director general of the political department of the “Iceland plans to send some experts to Estonia to Foreign Ministry and the undersecretary for political find out more about the cyber defence centre and affairs. Väino Reinart has been the Estonian will then make up its mind whether and how to Ambassador to the United States and Mexico since participate in its work,” she said. August 2007. Before assuming his position in “It is admirable how Estonia has managed to turn Washington, Reinart was Estonia’s ambassador to the the threat of cyber attacks into an instrument to European Union improve its capability and become the host country Ambassador Väino Reinart resides in Washington, of the NATO centre,” Gisladottir said. DC. The Estonian Embassy in Ottawa is directed by Commanders of seven countries' armed forces temporary charge d’affaires Rasmus Lumi. signed last week in Brussels a cooperation agreement to set up the NATO centre of excellence

3 Sweden's New Envoy to Estonia Jan are about a couple of thousand people with Estonian Palmstierna citizenship living in the Pechory region. The Pechory area was part of the Republic of May 22 - The Swedish government appointed Estonia before World War II and its residents who Jan Palmstierna ambassador to Estonia to are descendants of citizens of Estonia from the time succeed the incumbent Dag Hartelius in the are entitled to Estonian citizenship by birth. fall. Bobryashev said that conscripts from the Pechory Palmstierna's present job is that of chief region who preferred to serve in the military of a coordinator of trade and investment at the Foreign NATO member state had become a serious problem. Ministry, a spokesperson for the government said. "Young men of conscription age are making He has previously served as ambassador to attempts to pass, and are actually passing, conscript Vilnius and worked at Swedish embassies in Bonn, service in the armed forces of NATO member Estonia Copenhagen and Santiago de Chile, the trade and in order to evade our military service," he said, East Europe departments of the Foreign Ministry, adding that in NATO forces conscript service lasted and the parliamentary foreign affairs committee. eight months, compared with one year in Russia. Hartelius took office as ambassador to Estonia in August 2003. DOMESTIC NEWS Estonian Air to Start Flying to Stockholm Estonian Rescue Service, Volunteers Five Times a Day Bring Forest Fire under Control th May 26 - Due to the Scandinavian carrier SAS' May 26 - On the night of May 25 , the rescue recent decision to end flights between service and volunteers managed to gain Stockholm and Tallinn, Estonian Air plans to control of a forest fire in Vihterpalu in north- western Estonia, which was first reported May increase to up to five the number of daily th flights between the two cities. 24 at 12.20 p.m. The number of flights will rise at the end of Due to weeks of no rain and brisk winds the blaze August when business travel picks up again. At quickly spread over a territory of 850 hectares but present the national carrier is flying from Tallinn to close to zero temperatures and the wind dying down Stockholm up to four times a day, depending on the during the night helped gain control over the fire. day of week, and besides there are two weekly No open flames could be noticed during a reconnaissance flight at 4 a.m. on the morning of flights between Kuressaare, the capital of the island th of Saaremaa, and Stockholm. May 26 , but thermal camera observation detected smouldering fires in the ground over a large area of the blaze. DEFENCE NEWS Estonia Not Conscripting Young Men from Estonian Nationalist Removes Two Soviet Abroad Monuments in Tallinn May 23 - Estonia is not calling up its citizens May 22 - A well-known Estonian nationalist living permanently in other countries to pass ordered a crane and removed two Soviet compulsory service in the Estonian military, as monuments in Tallinn. being a resident is one of the prerequisites for Liim first had the crane operator hoist a conscription. monument to Soviet officers who had studied at the Peep Tambets, deputy chief of the Defence Tallinn military school onto a truck. He then directed Resources Board, said that one of the reasons for the crane operator to the monument of the Estonian this was that conscripts had to undergo medical communist Hans Poogelmann and had it also examination. removed. Since Estonian citizens have no obligation to Liim transported the monuments to the History provide the state with data about their place of Museum in Tallinn's Maarjamagi neighbourhood. The residence, defence authorities have no precise data development director of the museum, Mariann as to how many young men living abroad actually Raisma, admitted that their arrival was something of have passed conscript service in the Estonian a surprise even if a museum was the right place for military. them. Tambets said that, by way of example, a young Liim has vowed to clear all Estonia of Soviet man living in Argentina came to serve in the monuments. Estonian military at the beginning of this decade. Of Russian citizens living Estonia, only a few have gone to serve in the Russian military during the ECONOMIC NEWS period after Estonia regained its independence. Spokespeople for the security police said there were Currency rates in kroons: fewer than five such individuals. http://www.eestipank.info/dynamic/erp/erp_ Ivan Bobryashev, chief of the border service of en.jsp the Russian Federal Security Service in Pskov, has (Bank of Estonia) meanwhile said that persons with dual Russian and Hansabank's Name Change to Cost EUR Estonian citizenship living in the Pechory region of 10 Million Russia are posing a threat to Russia's territorial integrity. He said that more than 10,000 people in May 21 - Change of Hansabank's name into that the Pechory region had both Russian and Estonian of Swedbank over two years will cost about 10 citizenship at this point. million euros. Estonian MP Inara Luigas, who heads the support The investment has been very equally distributed group for Pechory region in the Estonian parliament, between the three Baltic countries, Erkki Raasuke, sees the estimate as far-fetched. In her words there CEO of Hansabank Group, said.

4 Raasuke said the preliminary budget had been Imports from EU countries made up 81 percent drawn up in cooperation with the Swedish owners. and from CIS countries 11 percent of all imports in Concrete investments are connected with the visual March. EU countries accounted for 76 percent and identity of the new name and the network of its CIS countries for 16 percent of the total in March gearing, and the group is also planning to organize 2007. numerous campaigns directed at clients while Both in exports and in imports machinery and introducing the new brand. equipment made up the largest commodity group in The exact date of transition to the new brand has March, accounting for 22 percent of the goods flows. not been fixed yet, but legally the name change should take effect at the end of this year or the New Sales by Estonian Leasing beginning of the next, Raasuke said. He said the Companies Up 9% bank's wish was to start with the new brand simultaneously in all the three countries. May 26 - New sales by member companies of Raasuke said that the name change would bring the Estonian Leasing Association in April were no negative consequences to the clients, only the 1.9 billion kroons (EUR 121.4 mln), 8.6 percent visual identity of the bank would change and the more than in April 2007. quality of banking services would improve. The In previous months, new sales soared by almost contracts signed with the clients would remain the 26 percent. same and no new contracts would be signed. Members of the Estonian Leasing Association are Raasuke said that Hansabank's present structure Hansa Liising Eesti, Uhisliising, Nordea Finance would not change after the name change; all the Estonia, Sampo Liising and Siemens posts would remain as before. Finantseeringute OU. Jan Liden, CEO of the Swedbank Group, said there would be no changes in the Swedbank logo Estonian Development Fund Makes First either. Investment in Smartpost Asked what would become of Hansabank's name May 26 - The Estonian Development Fund and and trademark, Raasuke said that it would simply OU Smartpost have signed a partnership not be used any longer, but would certainly not be agreement under which the fund is acquiring a sold either. minority holding and making its very first Raasuke estimated the present Hansabank's investment in this company. market share in Estonia at about 50 percent in The fund's CEO Ott Parna said the fund acquired Estonia, 30 percent in Lithuania and 25 percent in together with co-investors a minority stake whose Latvia. size will be made known by the end of June. He did The name change is necessary because it is not not disclose the sum invested either. practical for the two brands to exist together, simply As stipulated by the Development Fund law, the the timing is good at present and hopefully also the fund found co-investors in the private sector. strategy is successful, CEO of Hansabank Estonia According to Parna, Smartpost became the fund's Priit Perents said in comment of the name change. first investment by chance but at the same time the “Becoming a branch of Swedbank is possible if company's profile indicates which enterprises the the legal environment fosters it. But a separate Development Fund considers to have good prospects economic decision should be made to do it and the in the present stage. issue is not on the agenda at the moment and will Smartpost is a logistics company whose aim is to not be in near future either,” Perens said. speed up the delivery of goods bought from mail

order companies or online. The firm serves mainly Drop in Imports Reduces Estonia's Trade customers of mail order companies and Internet Gap in March shops through a logistics network consisting of May 26 - Compared to March 2007, the import couriers and self-service automated package drop- of goods decreased by 10 percent in March of off machines. this year and the trade deficit declined by 1.7 billion kroons to 3.3 billion kroons (EUR 210.86 Estonia's Merko Builder Posts 75% mln). Growth in Profit The nominal value of Estonian exports in March May 23 - The Estonian Merko Ehitus building was 10.6 billion kroons while imports totalled 13.9 group earned a net profit of 154.9 million billion kroons. The value of exports rose by 2 kroons (EUR 9.9 mln) in Q1 this year, 75 percent and imports fell by 10 percent. percent more than in the same period last In March 2007 the export of goods dropped by 3 year. percent and imports increased by 4 percent in The sales proceeds of the company totalled 1.12 comparison with the same month a year earlier. The billion kroons, 10.3 percent more than in the same drop in exports and rise in imports then increased period in 2007. the monthly trade shortfall to 4.6 billion kroons. Merko's operating profit was 177.9 million kroons In the first quarter of this year the export of in Q1, slightly more than double in the same period goods grew by 5 percent and imports fell by 4 last year. The operating profit margin increased to percent compared to the same period of 2007. 15.9 percent this year compared with last year's 8.7 The first-quarter foreign trade deficit was 9.6 percent. billion kroons. During the same period of 2007 a Of the sales proceeds of the group Estonian trade gap of 12.6 billion kroons was recorded. operations accounted for 55.2 percent, Latvian In March European Union countries accounted for operations 26.7 and Lithuanian operations 18.1 73 percent and CIS countries for 12 percent of all percent. Compared with the previous year, the exports. A year earlier the respective figures were company's sales proceeds in Latvia increased by 70 percent and 12 percent.

5 94.1 percent, in Lithuania by 19.7 percent and declined in Estonia by 10.7 percent. A warm winter and cyclic nature of housing construction and real estate development had a favourable effect on the growth of sales proceeds. The company also pointed out that protraction of the land swap criminal case opened in 2005, the obscurity and speculations in the press had started to inhibit economic activity of the company and damaged interests of the company and its shareholders.

Estonian Central Bank to Issue 1-Kroon Anniversary Coin May 21 - The Bank of Estonia will issue a 1- kroon Republic of Estonia 90th anniversary coin. The central bank will issue the coins, of which 20 million will be circulated, on June 6. On June 20 the bank will present a 10-kroons banknote dedicated to the 20th anniversary of the Estonian currency reform. To mark the anniversary of Estonian independence the country's central bank has this year issued also souvenir coins of platinum, gold and silver.

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