4/2008 on legalities Eastern European Safari

Maud Olofsson Sweden’s Minister for Enterprise & Energy and Deputy Prime Minister

The Estonian Nokia... here it is Estonia has a great opportunity now. Estonians have always been close to the nature and the big future is in ecological energy! The Estonian state should really motivate students of universities in Estonia to start developing Dear reader, alternative energy President Elect Obama and the world crises sources. The USA has a new President and his name is as we all know Barack race in this Obama. Obama has showed up as a great communicator with area has not extremely high expectations tied to him and his team for the really started next four year. His program is however rather unknown and can yet in any only be summoned up in one word: Change! country of the world. The Fair enough, but leaders so far are Germany and Scandinavia, close partners of in the fi rst quarter Estonia. of 2009, he better come up with some In FICE - the Foreign Investors’ Council in Estonia we are strong leads on working with the government to develop an action program how he wants to get for sustainable energy and environmental protection. Eco the USA out of the tourism will also increase in the future and here are also shit they have put great opportunities for the sons and daughters of the Forest themselves into. Brothers! Many people blame Devaluation of the Baltic President Bush for all the mistakes, currencies but he is just the This has been a popular subject top of the iceberg. during the last years and after The fundamentals the takeover of Parex bank in are wrong! USA Latvia it is now forbidden to consumes more speak about this is Latvia. I think than they produce that is a great milestone in the and this has now development of the free speech reached the surface. in Latvia. In Estonia I guess we Initially the US already have had an unwritten law Government has saying that the Prime Minister gone for huge cannot describe the economy in a bailout programs negative way either. but with defi cit of 70% of GDP, the Government is soon having their nose under the water. The level is now between the chest However, I believe that the Baltic currencies today are like and the throat. If it passes the nose, the USD will start dropping small ducklings in the row behind the SEK and that the SEK freely, just like the GBP has started to do however slowly. When has been like a devaluation shock absorber for the Baltic will the GBP and EUR be in parity? Soon, I guess! currencies. The US Secretary of Treasury John B. Connally said to the rest of The SEK has gone from 9.20 to the EUR to well over 10:- to the the world when the US stopped the Bretton Woods obligations of EUR. Thanks to this situation, I do not believe that the Baltic changing USD against gold; ’’The dollar is our currency and your currencies will be devaluated, because very few will win with problem’’. Today we answer to Mr John B. Connally ’’ The USD such a strategy, but the banks will loose, the people will loose is the world currency, but your problem’’. and the politicians will loose support from the voters. Obama is like a star trainer in the Total Makeover TV program. The Baltic politicians and people can be very happy to have the In front of him is a huge overweight six pack Joe, as Sarah Swedish banks here. Palin would have called him. This 150 kg junk food fan and Wal The only threat to the currencies comes from the Baltic people Mart client with 100 credit cards out of which 95 are blocked themselves as we can see from the Parex bank story. due to default payments, Obama has to transform into a Lance Armstrong type of guy who cleans up his debts and start paying and shopping in cash on payday! For this he has 6 months to Enjoy reading nr 4, 2008 and I also want to wish all of you show great progress and 3 years to deliver, otherwise Obama a Merry Christmas and a Happy New Year! will join the peanut farmer Carter, being remembered as a rather grey President with good intensions. Anders Hedman Chairman I do hope Obama will make it, even if I always have been a SCCE Republican, but the stakes are too high here, so we should all unite behind the President of the biggest economy in the world, as well as the biggest democracy! The Swedish Chamber of Publisher is published by the Swedish Chamber of Commerce in Estonia - SCCE. Commerce in Estonia

Address: Th e Swedish Chamber of Commerce in Estonia – SCCE - is a non-profi t The Swedish Chamber association registered in Estonia. Since its foundation 1991 the SCCE has of Commerce in Estonia Rüütli 9 grown considerably and today the Chamber unites close to 140 member EE-10130 Tallinn companies and organizations headquartered in Estonia, Sweden as well as Estonia other countries. E-mail: SCCE is in many ways a mirror of the intensity in Swedish-Estonian commerce and trade. [email protected] Sweden is the biggest foreign direct investor in Estonia and in terms of export and import Tel: (+372) 501 9813 Swedish-Estonian business is among the top three.

A main task of SCCE is to create an environment for networking and exchange Editorial content and articles of information. The Chamber act as a meeting place by arranging seminars, SCCE accepts business lunches, company visits, hosting business delegations as well as editorial content and arranging social events for the members. articles for the magazine promoting Following a SCCE initiative, FICE - Foreign Investors’ Council in Estonia was the commerce founded in August 2008. FICE is a lobby group acting through contacts with and trade between the Estonian Government and Estonia’s Governmental bodies. Together, the Estonia and Sweden nine countries represented among FICE’s members had a more than 80% primarily. The author share of the total foreign direct investments in Estonia during the fi rst six of editorial texts and months 2008 [source: Eesti Pank]. articles published is Special and unique SCCE member benefi ts include listing in the SCCE Trade responsible for the Directory, an opportunity to a further market content. introduction in the Member in HighLight section of SCCE welcomes the Chamber’s website as well as taking advantage contributions to the of a steady fl ow of Special Offers. magazine and reserves the right to The fee for basic membership in the Swedish refuse publishing of Chamber of Commerce in Estonia is EEK 5.900:- content not being in per year and EEK 20.000:- per year for Royal line with the Statutes Membership (2008). Membership is only granted to of SCCE. legal entities.

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Subscriptions and additional copies In this issue: The magazine is distributed free of charge to the members of the p. 3 Editorial Swedish Chamber of Commerce in p. 5 Legalities Estonia. p. 6 focus met: Maud Olofsson Companies not yet being members of p. 8 The Nobel Prize Awarders the SCCE as well as private individuals can subscribe to . p. 10 90th Anniversary of the Republic of SCCE also provides additional Estonia copies of for SCCE member’s own distribution of the magazine to p. 15 focus on the Economy customers and business contacts to a p. 20 FICE – Foreign Investors’ Council in net printrun cost. Estonia Please contact Kristiina Sikk for p. 21 focus on tour further information: kristiina@ swedishchamber.ee p. 26 Eastern European Safari: What doesn’t kill you makes you stronger? Printed in the EU by KNT Meediad OÜ, Tallinn, Estonia. p. 28 Newsfl ashes p. 35 ps. All rights reserved. 5 on legalities

Some remarks regarding bankruptcies in Estonia by Siim Roode - partner of MAQS Law Firm, Tallinn

There is a lot of talk about bankruptcies these days. In this article, I will try to explain what bankruptcy is from a legal point of view, and why it is good to have a system enabling bankruptcies. First of all, to legally go bankrupt means that a court has declared a company or a private individual bankrupt. This is done when it is clear that the person is insolvent and that the insolvency court and ask for a decision to end the bankruptcy procedure is not temporary. In other words, it is the court’s decision and thereby the debts will be cleared. to declare whether there is bankruptcy or not. It could be worth mentioning that such a court decision comes to force If you would happen to fi nd the company you work for or own immediately, even if the decision is appealed against. in a bankruptcy situation, the best advice I can give is to try to create a good co-operation with the temporary trustee and give The court will start a bankruptcy proceeding only after an him/her all information that may be relevant. If the court later application has been submitted. The application can either declares the company bankrupt, then there is not much more be made by the debtor or any of its creditors. The court will you can do anymore. then appoint a temporary trustee (Est: ajutine pankrotihaldur) who will investigate if the debtor is insolvent and if so, if the It is also important to stress that nobody is either a winner or insolvency is temporary or not. a loser in case of a bankruptcy; all In the year 2006 losses actually MAQS Tallinn offi ce has moved into new there were in total took part before premises 228 bankruptcies the bankruptcy recorded in was declared. MAQS Law Firm’s Tallinn offi ce is as from 1 November Estonia, last year In the course of 2008 situated at Rotermanni 8 in Tallinn. the number was the bankruptcy The historic Rotermann quarter is situated in the heart 234. It is likely that procedure, all of Tallinn, in the area between the Old Town, the port and Viru Square. It is the city’s most attractive district, the number of the property of containing a juxtaposition of old industrial buildings bankruptcies will the debtor will that have acquired a new function as well as modern grow during this be realised and architecture. and the following divided among MAQS Law Firm’s new offi ce is situated on the top fl oor years due to the current fi nancial situation. How large numbers the creditors in of the award-winning new building Uus Jahuladu (New we are talking about is, however, diffi cult to predict. the way set out in Flour Warehouse). the legislation. A New address: The most common reasons to why a company will go bankrupt bankruptcy is no MAQS Law Firm is that its management has been making incorrect risk doubt emotionally Rotermanni 8 assessments or that a signifi cant co-operation partner already diffi cult, but from 10111 Tallinn has gone bankrupt. For private individuals, the most common a fi nancial point Estonia reason is that the person has issued a personal guarantee for of view it is a Tel: (+372) 6 676 440 the benefi t of his or her company and when the company has not very functional Telefax: (+372) 6 676 450 been able to fulfi l its obligations, the guarantee has kicked in. process that in E-mail: [email protected] the end will also www.maqs.com It is important to know that while a company that goes bankrupt give the debtor a will in the end be liquidated and erased from the Commercial possibility to turn MAQS Law Firm is a dynamic full service law fi rm Register, a private individual does not have that opportunity. the page and start within business law with offi ces in Stockholm, As a private individual, you can however after fi ve years turn to over again. Gothenburg, Malmö, Copenhagen, Warsaw and Tallinn. 6

As Sweden’s Minister for Enterprise & Energy Renewable energy and Deputy Prime Minister Maud Olofsson Maud Olofsson makes up 40 percent made a November visit to Tallinn, Ambassador Elected leader of the Swedish Centre of Sweden’s energy Party 2001, Maud Olofsson was named Jan Palmstierna invited to an afternoon Sweden’s Minister for Enterprise & consumption Energy and Deputy Prime Minister 2006 seminar at the Swedish Embassy focusing on as Alliance for Sweden, the four political - Excluding the transportation parties forming Sweden’s current energy, climate and the environment. sector, Sweden today has coalition Government, entered offi ce. - Energy and climate change are two of the most challenging an almost fossil free energy system, told Maud Olofsson. Maud Olofsson grew up in the northern issues of our time, said Maud Olofsson. CO2 – emissions part of Sweden and her family had long Oil’s share of energy supply from energy make up a great part of the green house gas time roots in the Centre Party. Her father is less than a third and it will emissions in the European Union and by using less energy and was a local Centre Party politician and continue to decrease. The one of her brothers is a local Centre cleaner, locally produced energy, we can not only address the proposed EU targets would Party politician. climate change problem but also limit EU’s growing external mean increasing Sweden’s dependence of oil and gas. During her political career Maud share of renewable energy up Olofsson has worked on different The transition to a low-carbon economy create to 49 percent. positions in local and regional politics - Sweden has a good starting and entered the national Swedish new business opportunities political scene as she was elected leader of the Centre Party. - The industrial development was built on a heavy exploitation of natural resources and a dependency on fossil fuels, continued Alliance for Sweden Maud Olofsson. This is not sustainable and there was a hidden price for our welfare, the climate change. Now we need a smarter growth and I am convinced that it is possible to combine welfare development with climate care.

- I believe that EU showed true leadership last spring when we agreed on ambitious climate and energy targets. Sweden believes that the climate- and energy package is an important step forward and that it is necessary to reach the goals that have been set up. Fredrik Reinfeldt, Maud Olofsson, Jan Björklund and Göran Hägglund. Photo: Erik Bratthall - This is even more important in the light of the recent developments on the fi nancial markets. If we don’t keep the Forming the current coalition long-term perspective on sustainable development, we will point as our country is rich Government, Alliance for Sweden in natural resources such consists of four centre-right oriented become increasingly vulnerable. Both to short-term fl uctuations as hydropower and forestry. parties; on fi nancial markets and to up-coming political instabilities or But the development has not other external factors. - The Moderate Party, liberal- come spontaneously. A strong conservatives, led by Fredrik Reinfeldt, political will in this fi eld has - Enabling European companies to lead the way in the also Sweden’s Prime Minister since 1990 made it possible transition to a low-carbon economy will create new business for Sweden to increase the - The Centre Party, led by Maud Olofsson opportunities, said Maud Olofsson. Reaching the climate and share of renewable energy and energy goals set up by the EU is a common responsibility for all - The Liberal People’s Party, social- reduce CO2 emissions by 9 member states. And it is natural that we co-operate in order to liberals, led by Jan Björklund, also percent. During the same time Minister for Education reach these goals in the most effi cient way. Sweden’s GDP has grown by 44 - The Christian Democrats, led by Göran Hägglund, also Minister for Health and Social Affairs 7

percent. One of the big advantages with BASREC is that both EU member countries and non-member countries participate and have the - To get here policies that are general in character is a key, said possibility to exchange views and information in an informal, Maud Olofsson. With the introduction of a carbon dioxide tax in practical way. 1991 Sweden put a high price on CO2 emissions. I believe there must be a price on pollution. Without a price there is no level - The BASREC ministers will meet in Copenhagen in February playing fi eld between those choosing to take climate care and 2009 to discuss the future regional energy cooperation and those who do not. I’d like to stress that we sympathise with the diffi cult energy situation that some member states, like the Baltic countries, - In 2003, another important step was taken as Sweden fi nd themselves in. introduced a market based green electricity certifi cate system. The aim is to promote cost - The European Council has recently expressed its support Estonia’s and Sweden’s effective electricity production to the Commission initiative, of establishing an action plan to based on renewable sources speed up interconnections in the Baltic region and there are on- energy production such as bio energy, wind power going discussions on a new cable between the Nordic market and hydropower. It creates a and the Baltic States. competition between different - Politically, my government can support a cable between the renewable energy sources and Nordic market and the Baltic States, but one important aspect it gives us the most renewable is that such a cable should be benefi cial to all Baltic States, energy for our money. regardless of which of them would be in the receiving end. For the Nordic power system, the precise landing point of a possible Transportations are Nordic-Baltic link is of minor importance. next on the Swedish - I would also like to point out that Estonia’s Narva Power Plant environmental agenda increased energy security cannot only be reached by infrastructure development. The Presidency of While the Estonian raw material - Even if Sweden has come far the Council of the for its energy production is oil no country, no company and Equally important is energy effi ciency, shale - the Estonian energy system no person is in a position to sit development of alternative energy European Union is actually the only predominantly still and I believe that one of the sources and the development of oil-shale-based energy production functioning markets. system in the world - Sweden’s mix biggest challenges ahead of us lies of fuel for energy production is a bit within transportation, said Maud more diversifi ed. Olofsson. Sweden will put climate, energy and environment on top of the EU agenda During the second half of 2009, Sweden will have the position as Presidency Country of the Council of the European The Presidency has the responsibility for the Union. Sweden will highlight fi ve - To promote use of more functioning of the Council of the overarching themes for its Presidency environmentally friendly cars European Union and is rotated with climate, energy and environment between the EU member States Sweden has introduced special on top of the agenda. The additional every six months. The task of incentives, such as lower vehicle four themes include Jobs, growth & the Presidency is undertaken by taxes, free parking, a mandate an entire national government. Sweden’s Akkats Hydropower Plant competitiveness, A safer and more Photo: Hans Blomberg that bigger fi lling stations must open Europe, The Baltic Sea strategy offer at least one renewable fuel. Sometimes called the EU and relations with neighboring areas, Presidency, this assignment Hydropower and nuclear power And last year we introduced a plants account for more than 90 EU as a global actor and continued EU has as its primary responsibility green car rebate of SEK 10.000:- percent of Sweden’s electricity expansion. to organize and chair all production. The remaining ten [EUR 1.100.-] per car. In January meetings of the Council. The percent is splitted between this year 36 percent of the new - It is easy to paint a dark picture of the post as President of the Council biofueled power and heat registered cars in Sweden where future and only talk of threats to energy of the European Union is for production plants, while wind power supply and of climate change, said Maud each separate meeting held by “environmentally friendly” and the the responsible government so far has a minor part of Sweden’s Olofsson. That is not the way I look at electricity production. number is increasing. minister of the member state it and my picture is bright. I strongly - Second generation fuels have the holding the Presidency. believe that the efforts needed to combat potential of becoming more cost climate change are not constraining the The presidency is nowadays and energy effi cient than today’s economy. Instead, they provide us with being executed in a shared alternatives. And these fuels can manner in order to cope with a golden opportunity to introduce new, make use of a wide variety of the rather short six month environmentally friendly technologies. biomass from agriculture, forestry term of the presidency. Three successive presidents forming and waste. - For me it is very positive to see how a “triple-shared presidency” the market now strongly reacts to the work together over a 1.5 year Energy security in the climate challenge. It can be a powerful period to accomplish a common Baltic Sea Region force and I am convinced that the market agenda by the current president players together with necessary policy simply continuing the work of Sweden’s Forsmark Nuclear Power - I believe that it is very important the previous “lead-president” measures are the success factors. after the end of his/her term. Plant Photo: Hans Blomberg that the countries in our region - To secure a sustainable future, we continue to co-operate on energy The Swedish nuclear power plants, need to meet across national borders, Sweden will enter its second currently ten reactors in use, are policy issues, said Maud Olofsson. period of Presidency during to share information and thoughts and the main electricity suppliers The on-going cooperation on July through December 2009. experiences, concluded Maud Olofsson. during autumns, winters and governmental level, BASREC The fi rst Swedish Presidency was held in 2001 and Estonia’s in the springtime. The summer [Baltic Sea Region Energy time is used for maintenance and Text: Megazine - Tallinn fi rst Presidency of the Council summers are consequently the Cooperation] is one important tool. of the European Union will peak production period for hydro take place January through powered electricity. June 2018, thereby coinciding with the 100th Anniversary of the Republic of Estonia. 8 The Nobel Prize Awarders In his last will and testament of November 27th, 1895, Alfred technology, society and humanistic sciences. Nobel specifi cally designated the institutions responsible for the prizes he wished to be established. The Nobel Assembly at the Karolinska Institute “… The prizes for physics and chemistry shall be awarded by the Swedish Academy of Sciences; that for physiology The Nobel Prize Laureates 2008 or medical works by the Karolinska Institute in Stockholm; that for literature by the Academy in Stockholm, and that for champions of peace by a committee of fi ve persons to be elected by the Norwegian Storting (Parliament).”

Celebrating its 300 years anniversary 1968, Sveriges Riksbank (Sweden’s Central Bank) established the Prize in Economics in Memory of Alfred Nobel and the Royal Swedish Academy of Sciences was given the task to select the Economics Prize Physics Laureates starting in 1969. One half to: Yoichiro Nambu The Royal Swedish Academy of Sciences “for the discovery of the mechanism of spontaneous broken symmetry in Known as Kungliga Vetenskapsakademien, the subatomic physics” Royal Swedish Academy of Sciences selects the and the other half jointly to: The Karolinska Institute is one of Makoto Kobayashi Nobel Prize laureates in physics and chemistry as Europe’s top ranking universities and well as economics. Toshihide Maskawa and Sweden’s largest centre for “for the discovery of the origin of the medical training and research. broken symmetry which predicts the The Academy was founded As the Institute got the task of existence of at least three families of quarks in nature.” 1739 and modelled on selecting the Nobel Prize laureate in physiology or medicine, a On their discoveries: the pattern of the Royal The fact that our world does not special Nobel Assembly was behave perfectly symmetrically is due Society of London and of formed and included in the to deviations from symmetry at the l’Academie Royale des Institute’s organization and it microscopic level. consists of 50 professors, all Sciences in Paris. It was Yoichiro Nambu’s theories permeate connected to the Institute. created as, and still is, the Standard Model of elementary particle physics and his Model unifi es an independent, non- There was a military background the smallest building blocks of all governmental scientifi c when the Institute was founded matter and three of nature’s four society and one of the in 1810 as the initiator, Sweden’s forces in one single theory. founders was the world-famous King Karl XIII, saw a need for well The broken symmetries described naturalist Carl Linnaeus, later on educated medical doctors on the by Makoto Kobayashi and Toshihide battlefi elds. Among the founders Maskawa seem to have existed in knighted von Linné. was Jöns Jacob Berzelius referred nature since the very beginning of the universe and came as a complete to as the father of Swedish surprise when they fi rst appeared in From the very beginning the Academy established chemistry, and he also became particle experiments in 1964. It is only fruitful scientifi c relationships with the Academies the man who gave the Institute its in recent years that scientists have natural science profi le. come to fully confi rm the explanations of the main European countries. It was a fi rst that Kobayashi and Maskawa made in 1972. step towards the internationalization of scientifi c Today the Karolinska Institute is research and a global outlook and cooperation is till dedicated to ‘improving human Chemistry on top of the Academy’s agenda. health through education, research and the dissemination Jointly to: Osamu Shimomura of knowledge’. Its core activities Today the Academy consists of some 400 Swedish Martin Chalfi e include research, postgraduate and and 175 foreign members and its work is managed and undergraduate training and Roger Y. Tsien by a secretariat including 30 employees with the a comprehensive network of On their discovery: international contacts secures The remarkable brightly glowing Permanent Secretary as the Director. green fl uorescent protein, GFP, the Institute’s state-of-the art was fi rst observed in the beautiful Scientifi c areas covered by the Academy’s current research. jellyfi sh, Aequorea victoria in 1962. work include mathematic, astronomy and space, Since then, this protein has become physics, chemistry, geology, biology, medicals, one of the most important tools used in contemporary bioscience.

With the aid of GFP, researchers have developed ways to watch processes that were previously invisible, such as the development of nerve cells in the brain or how cancer cells spread. 9

Physiology or Medicine edition of SAOL, Svenska Akademiens ordlista över svenska

One half to: Harald zur Hausen “for his discovery of human papilloma viruses causing cervical cancer” and the other half jointly to: Françoise Barré-Sinoussi and Luc Montagnier “for their discovery of human immunodefi ciency virus” On the discoveries: On Martti Ahtisaari: Harald zur Hausen went against current dogma and postulated that oncogenic human papilloma virus (HPV) caused cervical cancer, the second most common cancer among women. He realized that HPV-DNA could exist in a non-productive state in the tumours, and should be The Swedish Academy detectable by specifi c searches for viral DNA. Svenska Akademien, the Swedish Françoise Barré-Sinoussi and Luc Academy, selects the Nobel Prize Montagnier discovered human laureate in literature. immunodefi ciency virus (HIV). The discovery was one prerequisite for the Founded by Sweden’s King current understanding of the biology of the disease and its antiretroviral Gustaf III 1786, the Academy’s treatment. charter was to a large extent written by the King himself. The Literature King was inspired by the French Throughout all his adult life, whether as a senior Finnish public servant Announcement by Professor Horace Academy and the charter says and President or in an international Engdahl, Permanent Secretary of the that the Academy should work for capacity, often connected to the United Nations, Ahtisaari has worked for peace Swedish Academy: the clarity, expressiveness and and reconciliation. For the past twenty - The Nobel Prize in Literature for good reputation of the Swedish years, he has fi gured prominently in 2008 is awarded to the French writer language. Fulfi lling this goal endeavours to resolve several serious Jean-Marie Gustave Le Clézio; and long-lasting confl icts. the Academy should publish a språket (the Swedish Academy’s “author of new departures, poetic dictionary on the Swedish adventure and sensual ecstasy, Swedish dictionary and a Swedish Economic Sciences language) was published 2006. explorer of a humanity beyond and grammar. below the reigning civilization”. But, the dictionary is not ready Paul Krugman “for his analysis of trade patterns and yet. By 2007 the Academy had location of economic activity” Jean-Marie Gustave Le Clézio King Gustaf III also had a patriotic purpose with the foundation come as far as to the word ‘trivsel’ comments: (wellbeing, coziness) and it is On Krugman’s analysis: - Literally, writing for me is like of the Swedish Academy as a Krugman’s approach is based on the travelling. It’s getting out of myself special memory coin should estimated that the Academy’s premise that many goods and services can be produced more cheaply in long and living another life; maybe a better be made every year and dictionary work will be completed life. by 2017. series, a concept generally known presented to a prominent Swede. as economies of scale. Meanwhile, Furthermore, the Academy’s consumers demand a varied supply - I was brought up bilingual, but I of goods. As a result, small-scale always write in French. I went to yearly commemoration day should The Nobel Institute production for a local market is replaced a French public school so my fi rst be celebrated on November 20th, by large-scale production for the world contact with literature was in French, The Norwegian Nobel Institute the day marking the death of the market, where fi rms with similar and that’s the reason why I write in was founded 1904, for the products compete with one another. 17th century Swedish King Gustaf French. purpose of assisting the Nobel II Adolf. Traditional trade theory assumes that Peace Committee in its task of selecting countries are different and explains the Nobel Peace Prize laureate. why some countries export agricultural The Swedish public opinion on the products whereas others export Martti Ahtisaari Academy deteriorated through industrial goods. The new theory Located downtown Oslo, the clarifi es why worldwide trade is in the years and it wasn’t until Erik “for his important efforts, on several Institute contains offi ces, a fact dominated by countries which not continents and over more than three Axel Karlfeldt, a Swedish poet only have similar conditions, but also meeting room, the Nobel Hall, a decades, to resolve international and author, became permanent trade in similar products – for instance, confl icts. These efforts have research department, and a well- a country such as Sweden that both secretary 1913 – 1931 that the exports and imports cars. This kind contributed to a more peaceful world stocked library with a reading Academy got modernized and of trade enables specialization and and to ‘fraternity between nations’ in room. The Nobel Committee large-scale production, which result in Alfred Nobel’s spirit”. shaped up in line with the values holds all its meetings in a lower prices and a greater diversity of of the present time. Among its commodities. special meeting room devoted eighteen members, the Academy’s fi rst female member was exclusively to this purpose. The elected during Karlfeldt’s time as permanent secretary. tradition has gradually developed of using the Nobel Hall both for Today, the Academy is considered to be a modern diversifi ed the announcement of the year’s institution, preserving the heritage from the past and monitoring Peace Prize in October and for the and giving attention to the trends of today. Laureate’s press conference on December 9, the day before the So, what happened to King Gustaf III’s goal of publishing a award ceremony in the Oslo City Swedish dictionary? Well, it obviously took some time to make Hall. it happen as the fi rst edition was published almost 100 years (1874) after the Academy’s foundation. The thirteenth and latest 10

The 90th Anniversary of the Estonian Republic ended November 28th marked the end and the culmination of Swedish volunteers this year’s 90th Anniversary of the Estonian Republic. The were sent to the date coincides with the Southern front Carl Mothander beginning of Vabadussõda and took part in - the Estonian War of the battles near Independence, ninety years Pechory (Petseri) ago. and by May there were only 68 Following Estonia’s volunteers left in Declaration of Independence combat shape. February 24th, 1918, Red The company Army troops conducted an was disbanded attack to capture Narva by the order of on November 28th the the Estonian same year and the War of Minister of War Independence began. and some of the Estonia’s military forces Swedish volunteers at the time were modest returned to and counted 2.000 men Sweden while Carl Axel Mothander (1886-1965) was a with light weapons and some joined the former Swedish offi cer in the reserves about 14.500 similarly Estonian Army and as he joined the White Finnish Army in light armed men in the some the Danish the Finnish War of Independence where he organized parts of the Finnish White Estonian Defence League - volunteer unit. Home Guard. However - a Army’s fi eld hospitals. In 1919 he became Estonia’s War of commander of a modest number of combination of successful Indepence ended Swedish volunteers in the Estonian War of international lobbying by February 2nd, 1920 Independence - Rootsi Korpus Eestimaal. Estonian politicians and as the Peace Treaty a support for Estonia’s After the Estonian War of Independence, of Tartu was signed by the Republic of Estonia and RSFSR – the cause among neighboring Mothander settled in Estonia, married a Russian Soviet Federative Socialist Republic. Baltic German lady and tried to take the countries brought military role of mediator between the Estonians reinforcements from Britain, and the Baltic Germans as the Baltic Finland, Denmark and Germans’ privileges had come to an end with the establishment of the Republic of Sweden. Estonia. Mothander is the author of the The British naval and air book ‘Baroner, bönder och bolsjeviker i force support to Estonia Estland’ (‘Barons, Farmers and Bolsheviks in Estonia’) where he made a personal included the fi rst combined analysis of the relationships between air/sea assault in history Estonians, Baltic Germans and Bolsheviks as the Bolshevik fl eet in after the War of Independence. Kronstadt, near the head of the Gulf of Finland, was Mothander was initially involved in the World War II evacuation of Estonian- attacked by ship launched Swedes. Rågö-kommittén - the Pakri torpedoes and hand dropped Islands Committee – signed a February bombs from the air. 3rd, 1944, letter of attorney where Mothander was authorized; „ ...to negotiate The Swedish volunteer with authorities in Estonia on behalf of unit to support Estonia the Committee to achieve exit permits for was formed in Sweden all Estonian-Swedes wanting to leave for in early 1919. Known as Sweden.“ Mothander’s contacts with the Nazi occupants were however perceived Rootsi Korpus Eestimaal to be a bit too independent and eventually and under the command the contacts necessary for the evacuation of Carl Mothander, a of the Estonian-Swedes mainly took place modest number of 178 without his intermediation. Swedish volunteers began Mothander also worked for the Estonian by taking part in Virumaa Red Cross and was a member of the Red scout missions during Cross Katyn Commission that investigated March 1919. In April, the the Soviet NKVD mass execution of Polish offi cers 1940. 11

in Czechoslovakia in early Forty years ago - 1968 January 1968, a period of political liberalization HighTech and culture started and became internationally known Tallinna as the Prague Spring. Autobussikoondis Additional rights to (Tallinn Bus the citizens included Company) proudly democratization, loosening introduced the new restrictions on the media, Ikarus-556 buses in speech and travel and a the spring of 1968. partial decentralization of This Ikarus model the economy. made good service The initial reaction within the Communist Bloc was mixed. at the streets of Hungary’s János Kádár was highly supportive of Dubček, but Tallinn up until Leonid Brezhnev and others were concerned about Dubček’s 1983. Now replaced reforms. During the summer the Soviet Union began to consider by Scania and Volvo buses the last Ikarus Tallinn bus took a a military alternative in line with the ‘Brezhnev Doctrine’ which festive farewell at Tallinn’s Vabaduse Väljak in February 2003. stated a policy of compelling the socialist governments of its Graphic Art and Form was highlighted as the fi rst Tallinn Print satellite states to subordinate their national interests to those of Triennial took place in 1968 under the name ‘Present Day and the Eastern Bloc. Graphic Form’. Estonia, Latvia and Lithuania took part and On the night of August 20–21, 1968, Warsaw Pact troops invaded from Moscow came criticism – the art exhibited was something Czechoslovakia and today comparisons have been made totally different compared to the prevailing Soviet monumental between the Prague Spring and the armed confl ict in Georgia. art standards. A Swedish jazz trio (Jan Johansson – grand piano, Rune I have a dream Gustafsson – guitar and Georg Riedel – bass) gives a concert As the 1968 Winter Olympics in in Tallinn. As Georg Riedel also is the composer to the music Grenoble were followed by the of many fi lms made on Astrid Lindgren’s books, he could note October Summer Games of the that Pipi Pikksukk (Pippi Longstocking) was published in a fi rst XIX Olympiad in Mexico City, Estonian translation 1968. two black US gold- and bronze- Meanwhile in Sweden medallists once again this year put the world’s attention to the Sweden’s Minister for Education, American civil rights movement. and later Sweden’s Prime They raised their arms in a black Minister, Olof Palme takes part power salute and protest during in a Stockholm Vietnamese the prize ceremony. demonstration together with Their demonstration came a bit North Vietnam’s Moscow more than six months after the Ambassador. One week later the April 4th murder of Martin Luther US Ambassador to Sweden is King Jr. in Memphis, Tennessee. called back to USA. Swedish schoolchildren celebrate US Presidential elections as the Swedish Government In mid-March 1968, US Senator decides that Saturdays will be free Robert F. Kennedy declares that from school effective nation wide he is entering the race for the from the autumn semester 1968. Democratic Party presidential The feministic organization nomination and on March 31st the Grupp 8 (Group 8) is formed in US President of that time, Lyndon Stockholm and the same city can B. Johnson, announces that he see Sweden’s fi rst pizzeria open at will not seek re-election. Restaurant Östergök. On June 5th, at the Ambassador Swedish students take part in the international May of ’68 Hotel in Los Angeles, Robert F. spirit and occupy their own students’ union building in central Kennedy is shot and dies from his Stockholm. The Minister for Education, Olof Palme, is sent out injuries the next day. for calming down the feelings, but learns that he is regarded as Following his August Republican a perfect representative of conservative bourgeoisie. nomination for US Presidency, Erling Persson, owner of the Swedish fashion clothing chain Richard M. Nixon wins the Hennes, buys Mauritz Widforss, a Swedish retailer of hunting November 5th elections and defeats the equipment and men’s clothing. The company is renamed Democrat’s candidate Vice President Hubert Humphrey and the Hennes & Mauritz, nowadays known all over the world as H&M. American Independent Party candidate George C. Wallace.

They may crush the fl owers, but they can’t stop May of ‘68 the Spring As the Prague Spring went on, the spring in Western European countries saw student protests emerge, culminating in France As Alexander Dubček (the above headline is a later alleged during May 1968. comment of his) was elected leader of the Communist Party 12

Many students saw the protests as an opportunity to shake up the old society and its traditional morality, focusing especially Autonomy on the education system and In Italy, Giorgio Rosa funded the employment. construction of a 400 sqm platform The French President Charles located in the Adriatic Sea, off the coast of de Gaulle’s administration’s Rimini. He furnished it with a number of attempts to quash the protests commercial establishments, including a only infl amed the situation restaurant, bar, nightclub, souvenir shop and further, leading to street battles a post offi ce and the artifi cial island declared independence on in Paris’ Latin Quarter, followed June 24th, 1968. The new micro-nation got the Esperanto name by a general strike by students “Insulo de la Rozoj”, with Rosa as self-declared President. and strikes throughout France The Italian Government regarded the whole thing as a ploy by ten million French workers, to raise money from tourists while avoiding national taxation roughly two-thirds of the French and their response was swift; a group of four164 carabinieri spacious and rooms, workforce. tax inspectors landed on the “Isola delle Rose”meeting and assumed facilities, The protests reached such a point that President de Gaulle control. The platform’s Council of Government restaurantis said to have and created a military operations headquarters to deal with the sent a telegram, presumably to the Italian Government,café Mademoiselle, to unrest, dissolved the National Assembly and called for new protest the “violation of its sovereignty and saunathe injury with infl whirlpool,icted on parliamentary elections in June 1968. local tourism by the military occupation”, but this was ignored. casino, Basically May of ‘68 became a political failure for the protesters, Soon afterwards the Italian Navy used explosives to destroy the but it had an enormous social impact. In France, it is considered facility - an act later portrayed on postage stampsbeauty issued salon by to be the watershed moment that saw the replacement of Rosa’s Government in Exile. conservative morality with liberal morality. A Space Odyssey Hair, La, la, la, Apple, a White Album and an As Stanley Kubrick’s movie unplugged comeback ‘2001: A Space Odyssey* has world premiere in April, the Regarded as a true child of its time, the US Apollo space program musical Hair opens at Broadway, New is well underway. Apollo th York April 29 1968. missions 6, 7 and 8 are Forty years ago the Eurovision Song launched during 1968, all Contest was mostly a Western European part in the gigantic rehearsal event and this year Massiel won for Spain for the 1969 fi rst man-on- 41 cozy rooms, with the song ‘La, la, la’. the-moon mission. café Mademoiselle, At a mid-May press conference in New York, The Beatles On Christmas Eve 1968 announce the creation of Apple Records. At this time, the Apollo 8 enters orbit around summer terrace, Beatles were contracted to Parlophone in UK and Capitol the moon and the three private functions Records in USA. In the new and complex recording deal, EMI astronauts onboard became and Capitol agreed to distribute Apple Records until 1975. EMI the fi rst humans to see the retained ownership of the Beatles’ records, issuing them on the far side of the moon and planet earth as a whole. Apple label but with Parlophone catalogue numbers. In March 1968, the Soviet cosmonaut Yuri Alexeyevich Gagarin Later on, in November 1968, The Beatles released their ninth was killed in a fl ight crash. On April 12th, 1961, he became the offi cial LP-record, a double album named ‘The Beatles’ and fi rst human in space and the fi rst to orbit the earth. including songs like “Back in the U.S.S.R.”, “Ob-La-Di, Ob-La- OPEN 2009 Da” and “While My Guitar Gently 100.38 Weeps”. As the album had no text On June 4th, 1968, the Standard & Poor’s 500 index came above other than the band’s name on 100 for the fi rst time, closing at 100.38. its plain white sleeve, it became known as the White Album. The S&P 500 is a value weighted index published since 1957 of the prices 301 modern rooms, of 500 large cap common 2 restaurants, stocks actively traded at the café Mademoiselle, New York Stock Exchange confenerce center, Following a long row of years in and NASDAQ. pools and saunas, the movies and Las Vegas show S&P 500 peaked in October wellness spa, productions, Elvis Presley made 2007, closing at 1.557.59 fitness center, a December 3rd US TV show, and is now (beginning of beauty salon commonly referred to as ‘Elvis´68 December 2008) down below Comeback Special’. His informal 900 and still falling. jamming in front of a small TV- studio audience is regarded as the forerunner of todays Unplugged- concept. Toompuiestee 27, Tallinn Tel.+372 66 77 111, [email protected] www.meritonhotels.com Autonomy In Italy, Giorgio Rosa funded the construction of a 400 sqm platform located in the Adriatic Sea, off the coast of Rimini. He furnished it with a number of commercial establishments, including a restaurant, bar, nightclub, souvenir shop and a post offi ce and the artifi cial island declared independence on June 24th, 1968. The new micro-nation got the Esperanto name “Insulo de la Rozoj”, with Rosa as self-declared President. The Italian Government regarded the whole thing as a ploy to raise money from tourists while avoiding national taxation and their response was swift; a group of four carabinieri and tax inspectors landed on the “Isola delle Rose” and assumed control. The platform’s Council of Government is said to have sent a telegram, presumably to the Italian Government, to protest the “violation of its sovereignty and the injury infl icted on local tourism by the military occupation”, but this was ignored. Soon afterwards the Italian Navy used explosives to Auditing destroy the facility - an act later portrayed on postage stamps issued by Rosa’s Government in Exile. Accounting A Space Odyssey As Stanley Kubrick’s movie Tax Consulting ‘2001: A Space Odyssey* has world premiere in April, the Legal Consulting US Apollo space program is well underway. Apollo missions 6, 7 and 8 are launched during 1968, all part in the gigantic rehearsal Global Service for the 1969 fi rst man-on- Rödl & Partner is present where business is present. the-moon mission. You will find us at 80 cities in 38 countries. On Christmas Eve 1968 Some of our local and neighboring Apollo 8 enters orbit around locations are here: the moon and the three astronauts onboard became the fi rst humans to see the far side of the moon and Sweden planet earth as a whole. Humlegårdsgatan 4 In March 1968, the Soviet cosmonaut Yuri Alexeyevich Gagarin 11446 Stockholm Tel: (+46) 8 57 93 09 00 th was killed in a fl ight crash. On April 12 , 1961, he became the Fax: (+46) 8 57 93 09 10 fi rst human in space and the fi rst to orbit the earth. e-mail: [email protected] www.roedl.se

100.38 Russia Moscow On June 4th, 1968, the Standard & Poor’s 500 index came above Estonia Elektrosawodskaja ul. 27 100 for the fi rst time, closing at 100.38. Roosikrantsi 2 Building 2, 5th fl oor 10119 Tallinn 107023 Moscow Tel: (+7) 495 9 33 51 20 The S&P 500 is a value Tel: (+372) 6 805 620 Fax: (+7) 495 9 33 51 21 weighted index published Fax: (+372) 6 805 621 since 1957 of the prices e-mail: [email protected] e-mail: [email protected] www.roedl.ru of 500 large cap common www.roedl.ee stocks actively traded at the Latvia St. Petersburg New York Stock Exchange Linija 14, House 7 K. Valdemara iela 33 and NASDAQ. Vasiljevskij Ostrov 1010 Riga 199034 St. Petersburg S&P 500 peaked in October Tel: (+371) 7 33 42 80 Tel: (+7) 812 3 20 66 93 2007, closing at 1.557.59 Fax: (+371) 7 33 46 20 Fax: (+7) 812 3 20 66 95 and is now (beginning of e-mail: [email protected] e-mail: [email protected] www.roedl.ru December 2008) down below www.roedl.lv 900 and still falling. Lithuania Germany Global Headoffi ce Tilto Str. 1/2 Äußere Sulzbacher Straße 100 01101 Vilnius 90491 Nürnberg Tel: (+370) 5 212 35 90 Tel: (+49) 911 91 93-0 Fax: (+370) 5 279 15 14 Fax: (+49) 911 91 93-19 00 e-mail: [email protected] e-mail: [email protected] www.roedl.lt www.roedl.de Charm meets Passion

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What happened? Future economical history books and future economical lectures The Great Depression of the 1930’s at universities around the world will most certainly pay attention

The 1930’s Great Depression was the to the current global economical crisis. Even though this is still largest economic depression so far in modern history. It originated in the to come in a larger scale, the history of today’s crisis has already United States and historians most often use the stock market crash on started to be at least commented in major media around the world. October 29th, 1929, known as Black Tuesday, as the starting point. has looked at some of the material written and put it International trade was deeply 1993 – 2001 affected, as were personal incomes, down in a timeline summarizing tax revenues, prices, and profi ts. the events, decisions and The US economy was booming after the Gulf War 1990 – Construction was virtually halted in actions contributing to what 1991. Following the Presidencies of Ronald Reagan and many countries. is already named as the worst George H. W. Bush (Senior), President Bill Clinton brought A majority of countries all over the global fi nancial crisis since the new life to Jimmy Carter’s social agenda originating more world set up relief programs, and 1930’s. than ten years earlier. US poverty should be fought and many underwent some political upheaval, pushing them to the left or more Americans with low incomes should right. be given an opportunity to live in a house of their own. Debt

Debt is seen as one of the causes of The regulations, governing two big the Great Depression. Banks began private, and US State controlled fi nance to fail as debtors defaulted on debt and depositors attempted to withdraw institutions were liberalized. their deposits en masse, triggering multiple bank runs. The two fi nancial institutions concerned, Government guarantees and US Freddie Mac and Fannie Mae, bought Federal Reserve banking regulations house-loans from banks and other to prevent such panics were institutions. These loans were converted ineffective or not used. Bank failures led to the loss of billions of dollars to bonds with the loan-fi nanced houses as in assets. Outstanding debts became securities. heavier, because prices and incomes 1977 – 1981 fell by 20 – 50% but the debts remained at the same dollar amount. The bonds became attractive on the fi nancial markets The US President Jimmy since there was an implied State guarantee behind them; Carter’s administration started the State supported these loans and the resulting bonds. to encourage US banks and This meant that the interest rate could be kept low and fi nancial institutions to approve thus benefi cial for the borrower. More capital was added house loans to people that to the market, making it possible to give more loans to normally wouldn’t get any loans. more people. To a large extent these people belonged to some of USA’s many The liberalized regulations minority groups and several made it indeed possible for of them had a somewhat poor Freddie Mac and Fannie Mae payment history. to buy up a signifi cant amount After the panic of 1929, 9,000 US of loans from banks that had approved them to people banks failed during the 1930’s. These President Carter’s main idea that normally wouldn’t have got any loan at all. During failures snowballed as desperate was that people having low Bill Clinton’s administration these loans, now named bankers called in loans which the borrowers couldn’t repay. incomes should get a possibility subprime loans, increased dramatically. A US research to get themselves a private showed that during With future profi ts looking poor, house and hence climb up some 1993 – 98, the volume capital investment and construction slowed or completely ceased. In the steps on the social hierarchy of housing loans almost face of bad loans and worsening ladder. doubled among American future prospects, the surviving banks low income groups, while became even more conservative in their lending. the increase among the 16

American middle class ended up at a more modest 30% his nation being attacked by terrorists. Killing close to increase. 3.000 people the terrorist attacks marked the beginning of a new era in world politics and in the world economy. The risks for Fannie Mae and Freddie Mac increased and towards the end of the 1990’s the fi rst alarms started As the terrorist attacks took place, the fi nancial world had to sound. These two fi nancial institutions were well experienced a slow down following the hyped IT-boom. underway in guaranteeing half of the US house loan And as the World Trade Center’s twin towers collapsed market and the majority of the subprime market. in New York this tragic September day, stock exchanges around the world fell rapidly. Taking big risks also offers opportunities to earn big money. And the big US risks now beginning to be exposed 2002 – 2006 needed a harmonizing – the risks had to be spread. Not only inside USA, but also to the international fi nancial scene. Banks built up their capital reserves and made fewer loans, which There are many ways to spread intensifi ed defl ationary pressures. A vicious cycle developed and the risks, but a common way is downward spiral accelerated. to repack the instruments of debts. Bonds and debt Many economists have argued that the sharp decline in international certifi cates are repacked and trade after 1930 helped to worsen the reissued as new bonds and depression, especially for countries new certifi cates. Towards signifi cantly dependent on foreign trade. the end of the 1990’s these repackings started to be made Franklin D. Roosevelt, elected US over and over again. And President in 1932, primarily blamed the excesses of big business for this happened all over the causing an unstable bubble-like international fi nancial world. economy.

The New Deal It didn’t took too long before nobody, not even the most The majority of the world united in condemning terrorism, sophisticated computer models and 2002 – 2006 became an unusual period in the history used for calculating risks, of world economics. Differing from Estonia the general could get any grip whatsoever global economy grew while infl ation was kept rather low on what the level of the actual (Estonia’s economy defi nitely grew with a record speed risks really were. And this also as well, but so did also Estonia’s infl ation).The American marks the time when a sound Central Bank, Federal Reserve, lowered its policy interest spreading of risks developed to rate and in 2003 it was down at a 1% level. a fi nancial bubble. From his 1933 US Presidential Companies around the world reported record profi ts and Inauguration and onward, Roosevelt September 11th, 2001 the money earned should now be invested. Investments argued that restructuring of the economy would be needed. His New were profi table and it was cheap to borrow money. Deal programs sought to stimulate demand and provide work and These companies as well as investment funds, States, relief for the impoverished through increased government spending and communities and municipalities from all around the world institute fi nancial reforms. went out on the international fi nance markets, all of them looking for a maximized return on their investments. The US securities industry became comprehensively regulated. Federal insurance of bank deposits was Cheap borrowed money also spread around the world. provided. Added Social Security People consumed more and more – with borrowed money. was introduced and a national relief agency, the Works Progress Estonia is by no means alone in the world by fi nancing Administration – WPA, was launched. nice-to-have things and a nice life with borrowed money. Statistics Sweden (SCB) reports that the debt burden of In 1937, Roosevelt embarked on a further antidote to the depression, an average reluctantly abandoning his efforts to Swedish balance the budget and launching a household $5 billion spending program in the spring of 1938, an effort to increase has more than mass purchasing power. doubled the last ten years. US expenditures as a proportion of GDP tripled between 1933 and 1939, accompanied by sizable defi cits but And – it was appear to have contributed to the Almost eight months after during these recovery, as consumer and producer rd behaviour changed. his installation as the 43 years the US President of the United States subprime 1939 of America, Georg W. Bush saw market, now The massive rearmament policies to counter Nazi Germany helped stimulate the economies of Europe in 1937 - 1939. 17 ights

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www.cityairline.com 18 The mobilization of manpower following the outbreak of war in 1939 fi nally ended unemployment. risk-spreaded to more or less every signifi cant fi nancial Lehman Brothers meant that In the United States, the massive war institution and bank all over the world, really hitted the the most valuable assets spending doubled the GDP, either heights of its enormous expansion. for any bank and fi nancial masking the effects of the Great Depression or essentially ending it. institution disappeared – trust Businessmen ignored the mounting Summer 2006 – 2008 and confi dence. national debt and heavy new taxes, redoubling their efforts for greater output to take advantage of generous The number of US home owners no longer being capable The costs for loans taken government contracts. of paying their debts increased and during the summer by banks all over the world of 2006 it became clear that the US house loan and skyrocketed and their will to Productivity soared; most people worked overtime and gave up leisure subprime market experienced rapidly growing problems. take risks in lending out money activities to make money after so to whoever or whatever more many hard years. People accepted The emerging fi nancial crisis became more visible and or less totally disappeared over rationing and price controls for the fi rst time as a way of expressing their following a loss of more than ten billion USD, HSBC – the night. support for the war effort. one of the biggest banks and fi nancial institutions in the world, fi red its US house loan division’s executive offi cer It was at this stage, autumn Cost-plus pricing in munitions contracts guaranteed businesses a in the summer of 2007. 2008, of the fi nancial crisis profi t no matter how many mediocre workers they employed or how Several house loan institutions closed ineffi cient the techniques they used. The demand was for a vast quantity during 2007 and USA saw its bank’s of war supplies as soon as possible, profi ts decline with close to 90% regardless of cost. Businesses hired during the fourth quarter the same every person in sight, even driving sound trucks up and down city streets year. begging people to apply for jobs.

March 2008 saw the fall of Bear As US federal expenditure had tripled between 1933 and 1939, Roosevelt’s Steams, one of the fi ve big Wall Street critics charged that he was turning America into a socialist state. However, Roosevelt’s spending on the New Deal was far smaller than on the war effort. investment banks, and the that Governments all over company was sold to JP the world, including Sweden, Morgan Chase. stepped in and presented differently packed guarantee packages for their banks Banks experienced and fi nancial institutions. sharply raised costs for borrowing money. The As Swedish banks are simple explanation was dominating the Estonian that the repacked subprime market, sighs of relief on the instruments of debts had Swedish guarantee package not only spread to banks were both heard and publicly and fi nancial institutions all expressed by representatives of over the world – they had the Estonian Government. also lost all of their former attractiveness. What now? At this time, everybody agreed that it was indeed a global fi nancial crisis we had at hand – but, it was still possible to manage and control it.

This last hope disappeared September 15th 2008. US based Lehman Brothers fi led for Chapter 11 bankruptcy and the fi nancial world went into chock. – If USA, the world’s biggest economy, is not prepared to fully support one of the biggest investment banks in the Commentators agree that we are in an economic world; who might then be recession that will take much longer than normal to interested in supporting overcome. Unemployment will increase and those having what bank...? The fall of a job will fi nd it diffi cult to get a salary raise – on the 19

contrary, salary decreases are more likely to happen. As lessons learned have been expressed from all over the for Estonia, the take-it-or-leave-it attitude in terms of globe. salary demands will shift from employees to employers. Leftists talk about greediness and a system failure due to The core business of any bank and fi nancial institution; the capitalistic system itself. the will and readiness to take a risk and lend out money, will remain at a very minimalistic level for a long time to Market liberals talk about degenerated offshoots, often come. Jan Lidén, Swedbank’s President and CEO up until caused by political interference. April 23rd, 2009, put it very well as he, in connection with the bank’s third quarter 2008 report, said: “From now on Others focus on the US it is quality and not quantity that counts in our lending subprime collapse and say Das Kapital becomes a business.” that social ambitions (like bestseller giving low income households Bad debts will be unpacked, re-evaluated and handled. a chance to borrow money for Borrowers will bankrupt and the bankruptcies will be a house of their own) should handled. be fi nanced by taxes and not by letting the private sector take Investments will decrease, new jobs will be rare and increased risks. we have to wait for an appearance of any signifi cant economical growth. The repackings Swedes remembering the Swedish economical crisis in of bad or at the beginning of the 1990’s and Estonian’s remembering least risky the ruble-crisis 1998 have a good word for the current debts to

situation; Steel-bath. nice-looking Sales of Karl Marx’s work on economy bonds and and capital, ‘Das Kapital’, have certifi cates skyrocketed as the global fi nancial Lessons learned? have been crisis goes on. heavily Das Kapital (Capital, in the English Most businesses criticized from all over the translation) is an extensive treatise are tuned and on political economy written by Marx political scale. and edited in part by Friedrich Engels. shaped over First published in 1867, the book is a time by lessons critical analysis of capitalism and its learned; like practical economic application.

a Darwinistic- Germany reports sales increases infl uenced Research and text: Megazine, reaching plus 300 percent. ‘Survival of the Tallinn - Marx is trendy again, says Jörn Fittest Business’. Schütrumpf at the German publishing A global fi nancial house Kar-Dietz. We notice a crisis of todays remarkable increase in demand for Das Kapital and we believe it will magnitude continue to increase. has however a somewhat Karl Marx (1818 – 1883) is renowned as the philosopher, political greater impact economist, sociologist, humanist, and political political theorist becoming a comments on revolutionary and a communist icon.

DHL Estonia AS Betooni tn. 6 Tallinn 11415, tel. +372 680 8555, e-mail: [email protected] 20 FICE’s fi rst four

months SCCE’s members are more than welcome to contribute with input, opinions and proposals to the work groups and here follows the necessary contact information to FICE’s work The Foreign Investors’ Council in Estonia (FICE) groups’ leaders: has had four intensive fi rst months. FICE’s initial Tax system letter to the Estonian Government was followed Gustaf Hertsius (The Swedish Chamber of Commerce in Estonia) by a meeting with Prime Minister Andrus Ansip E-mail: [email protected] (see focus 3/08 for a report) and since then the Tel: (+372) 526 6367 lobby work of FICE has intensifi ed. Education & Labour Maren Diale-Schellschmidt (The German-Baltic Chamber of Commerce) E-mail: [email protected] Tel: (+372) 62 76 940 Energy & Environment Peter Karanen (The Finnish-Estonian Chamber of Commerce) E-mail: [email protected] Tel: (+372) 565 4442 The media interest for FICE is impressive.

FICE’s work group on Education & Labour addressed the draft for a new Estonian labour law and in a November 6th letter, worked out by Martin Breuer, Chairman of the Holland Business FICE met with Riigikogu’s Economic Affairs Committee October Club in Estonia, FICE expressed its opinions on the draft to 6th and made a detailed presentation on the proposals put Riigikogu’s Legal Affairs Committee. The next day FICE press forward in the August 17th letter to the Government. information made front page news in Estonia’s important media. At this meeting FICE got an invitation to visit Riigikogu in connection with the Estonian Parliament’s debate session on The Legal Affairs Committee of Riigikogu has now confi rmed the economy, October 23rd. At that occasion we could note that that they will propose the Estonian Parliament to adapt the new basically there is a political consensus on the issues FICE has Labour Contract Act to come into effect July1st 2009. given voice to. There are good reasons to appreciate that FICE’s Friday October 31st, FICE’s Chairman Jens Christiansen proposals on the Tax System, Education & Labour and Energy answered questions from www.bbn.ee readers. Originally & Environment were included in this important debate without planned to last facing any obvious opposition! between 10 am to However, it should be remembered that this was a debate. 12 am, this online Parliament decisions have to be made and, above all, the things Q&A session was have to be made to happen. prolonged with one hour. FICE’s newly formed work groups play an important role in this continued work. They are expected to dive deeper into FICE’s FICE has proposals and work out implementation plans to be presented obviously made to the Estonian Government and Governmental bodies. the difference. Bearing in mind that FICE was the fi rst international interest group in Estonia that went public with input to Estonia’s Action Plan for Growth and Jobs 2008-2011, I am happy that many other organizations as well as political decision makers are sharing FICE’s thoughts and are interested to cooperate with Estonia’s foreign investors. Information on FICE’s activities is found in SCCE NewsLetters, available online on this web address: www.swedishchamber.ee/news

Report: Kristiina Sikk – SCCE Ombudsman and FICE Secretary 21

- Estonia is one important link in the Heavy duty machinery in set up of the chain of transportations needed for getting this machinery to eastbound transit through their customers in the CIS-countries and Mongolia, told Svetlana Shilenok, CIS Route Manager/Rail & Road Estonia transportation at DHL Estonia. From overseas the - Who said that transit transports through Estonia machines are CIS is a dead concept, asked Carl-Eric Lindström, coming by Managing Director at DHL Express Baltics, as Atlantic Ocean The Commonwealth of Independent vessels to the States is a regional organization and met him and members of his team at DHL’s gigantic Port as a confederation it is quite similar Tallinn offi ce. of Antwerp in to the original European Community Belgium. Since there is a scheduled rather than today’s European Union. - Right now we are handling Ro-Ro ship connection from Antwerp to Paldiski, it is a smooth solution to CIS possess coordinating powers transports of heavy duty in the realm of trade, fi nance, machinery coming from USA, reload the machines in Antwerp and lawmaking, and security. As Brazil, Japan, Australia, France, then loading them on freight trains in a regional organization, CIS Belgium, and going through Paldiski. participates in UN peacekeeping Estonia to their fi nal destinations forces. in several CIS-countries. Some - Since we in Estonia have the same of this machinery is actually wide gauge width on our railroads Some of the members of the CIS continuing all the way to as the CIS-countries and Mongolia, have established the Eurasian Mongolia. the machines will remain on the very Economic Community with the aim same wagon, all the way from Paldiski of creating a full-fl edged free trade zone or economic union between - It is indeed heavy duty to their fi nal destinations, added the participating states. However, machinery we are handling in Svetlana Shilenok. other member states have shown this logistical transport chain, greater interest in seeking to join said Mati Kärt, DHL’s Managing Director Freight. - Getting the freight train wagons the European Union. Similarly, some Transporting them on freight trains is the only realistic option we need for this operation requires member states have established due to their size and weight. Looking at the several days long some good contacts, said Mati Kärt. the Collective Security Treaty queue of trucks at the Narva border station you might think We have to consider that the Estonian Organisation to co-operate on that this would apply for these transports as well. Well, it Railroad can not supply the number defence and security issues, while of wagons we need. And, furthermore other members are seeking full doesn’t and I would say that, though we are experiencing some membership of NATO. problems from time to time we have always been able to come we have to maximize the opportunity up with progressive solutions. for the wagons to be loaded with a The CIS is headquartered in Minsk, return cargo as well. One-way payload Belarus, and its member States as From USA, Brazil, Japan, Australia, France and transports are never economical and per November 2008 include Armenia, they don’t represent something we Azerbaijan, Belarus, Georgia (notice Belgium via Antwerp to Paldiski, through Estonia would like to offer our customers. of withdrawal from the CIS made and further on to CIS and Mongolia August 18th, 2008), Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan, Turkmenistan (associate member), Ukraine (has not ratifi ed the CIS Charter) and Uzbekistan. 22

- Consequently we used some contacts in Russia and other CIS- countries for getting the wagon supply we need, continued Mati Kärt. There are some private options available there for renting freight train wagons and through our contact network we have managed to secure the capacity needed.

- These machines represent huge values and in addition to the logistical set up we also provide security along the way to the different destinations, told Mati Kärt. We cooperate with security companies in Russia and the CIS-countries concerned along the transportation routes and this is a set up that has served us and our customers very well.

specifi cations. The total available area will include almost Stockholm-Arlanda Airborne 1.700 sqm and we plan for a 2nd quarter opening 2009. Cargo City From a passengers horizon it is easy to - Right now we have a daily cargo connection with our air cargo More than 250.000 tonnes note that Tallinn Airport has undergone center at Stockholm-Arlanda’s expansive Cargo City, continued of goods is carried via an impressive expansion. This Leho Virma. It is a chartered BAe ATP cargo aircraft arriving Stockholm-Arlanda airport expansion programme also includes the per year. Main transport Tallinn in the morning hours and then returning to Stockholm and logistic actors include airport’s air cargo facilities. towards the evening. DHL and air cargo carriers like Korean Airlines Cargo, - Our express cargo volume has - This gives us the opportunity to sort and deliver incoming Cathay Pacifi c Cargo, China increased and right now a new cargo packages as well as collecting shipments in Estonia for Airlines Cargo, Jade Cargo, terminal is being built at the airport for British Airways Cargo, Atlantic Airlines and West DHL, told Leho Virma, DHL’s Operations Air secure a steady fl ow of Manager cargo fl ights to and from as focus destinations all over the met him at world. DHL’s Tallinn Now under construction air cargo towards the southern parts facilities. We of the airport, Stockholm- will rent the Arlanda Cargo City will comprise 150.000 sqm space needed of freight- and logistic- and the new buildings. This specially terminal is constructed air cargo area built according will also fulfi l the upcoming to DHL international security regulations for being worldwide assigned as a Freight Zone standards and – a zone where all goods handled is screened and controlled from a security point of view. 23

departure as the aircraft returns to Stockholm. Actually, 94% of our shipments here are next-day deliveries and we have currently 23 distribution cars taking care of the deliveries in There are no Estonia.

- Our Tallinn downtown drop-off offi ce for shipments like this borders for a has become popular. It is open 9.30 to 18.00 (lunch 12.30 – 13.00) on weekdays and is located at Rävala 5, just next to Swedbank’s offi ce. fl oating publishing - Stockholm-Arlanda serves us well for our European and world-wide shipments. We have a daily cargo fl ight of our own between Stockholm and our European air cargo center in company Leipzig and this secures both speed and quality in our growing international deliveries. Additionally we also operate a fl ight from Stockholm to East-Midlands, UK, connecting to our intercontinental fl ights to North and South America.

- The transport sector is indeed a mirror of commerce and trade, concluded Leho Virma. Looking at our air express volume at Tallinn airport, 75 percent is inbound to Estonia and consequently 25 percent have outbound export destinations.

A major actor

- Despite the current global fi nancial diffi culties, the Baltic States play an important role in the west to east and east to DHL west transportation fl ow, said Formed in 1969 by Adrian Dalsey, Larry Carl-Eric Lindström. Estonia’s Hillblom and Robert Lynn the company infrastructure towards our name DHL was derived from the founders’ eastern border and our family names. They initially provided a closeness to the St Petersburg courier service between the Continental US and Hawaii and then expanded the area shouldn’t be under business from there. evaluated. Straightforward business has a tendency to overcome political rhetoric and as long as we fi nd feasible solutions to problems that might occur I believe that we will continue to be a major player in this important transportation market.

- On a worldwide basis DHL DHL in Venice currently consists of close Deutsche Post fi nalized its purchase of to half a million persons The thought on ALF publishing company started to sprout by a DHL in 2002 and the company is today and we operate in 220 pure coincidence at a Stockholm bookshop in the middle of the a leading global actor in logistics and Christmas rush 2005. transports. That’s when the idea on Skrivarkalendern [the Writer’s Calendar] was born; an inspirational book containing interviews with authors, articles on writing and writing exercises every week throughout a full year. Ann Ljungberg, on an occasional visit “at home” in Sweden, started to cooperate with Anna-Carin Collin for writing the book.

For the production Ann used a tip from a networking friend in Luxembourg leading to mcm and Göran Brodén in Estonia.

Ann - who also works as a coach for authors, an organizer of courses for writers and as a publishing house editor – traveled countries, concluded Carl-Eric back to her distant working place onboard the sail yacht Olivia, Lindström. Our Estonian team at that time moored at the Turkish coast, and kept the contacts DHL - Offi cial Logistics of Formula 1™ includes some 200 persons with co-authors, graphic designers and production facilities and on a panBaltic level we are through e-mail. Nine months later the book was presented and DHL is a Deutsche Post World Net brand 562 team members. launched at Bok & Bibliotek, the Göteborg Book Fair. and the group generated revenues of more than 63 bn euros in 2007. Text: Megazine - Tallinn By now the small publishing house has published six books, www.dhl.ee E-mail: [email protected] 24

all produced in cooperation with mcm in Estonia. S/Y Olivia has - As a one-person headed on and Ann has found peace for working at places like entrepreneur onboard the Venice lagoon, Seville and right now in London where the a sail yacht I can sail yacht is moored for the winter at St Katharine’s Marina next sometimes miss to the Tower Bridge. not being able to be physically present Göran Brodén and Ann Ljungberg got an opportunity to meet “where everything in Venice – a personal contact is of course always good for happens” and it is deepening the contact constantly a question – but otherwise the of fi nding new ways cooperation has moved on to reach out with smoothly through e-mails my messages. My and phone calls. international network is invaluable, says Ann During last season’s and concludes; winter mooring of S/Y Olivia in Seville, Ann - The beauty with my took the opportunity and business is that I can published two books with do it anywhere! The Spanish themes; Jag dog only need I have is i Barcelona by Claes Grill to be able to connect and Flykt – om så bara to Internet, at least för en stund by Charlotta a couple of times per week. My Rydholm [I died in business can go on as long as there Barcelona and Escape – if are people longing for writing and only for a short moment; reading. both available in Swedish original versions]. By Text: Ann Ljungberg doing that she came in Translation: Megazine -Tallinn contact with Swedes in southern Spain, interested in books and writing. ALF publishing company - It is during the courses and presentations of books that I get in ALF – Ann Ljungberg Förlag – is an personal contact with my customers. independent publishing company It’s inspiring, says Ann. operated from the sail yacht Olivia, this winter moored at St Katharine’s Marina in London. She is planning several courses in As a coach for authors, Ann Ljungberg London this winter is working on scripts together with and not totally the authors and if the conditions are favourable, the work becomes a book surprising, she is also and jointly published. working with new books, this time with Ann is also an organizer of courses for English themes. ALF writers and a publishing house editor. publishing company ALF publishing house and book shop is just concluded open 24hrs year round at: an agreement on www.alfbok.se translating and E-mail: [email protected] publishing Fay Weldon’s latest book mcm – market the coming spring communication management 2009 [among many other novels, Fay mcm is a market communication Weldon is also the partner. The Swedish management has author of the best been operating out of the Baltic States since 1992 and has today key partners in seller The Life and eleven countries. Loves of a She-Devil, which became a A solid team of professional market movie 1989, starring communicators makes it possible for Roseanne Barr mcm to create a special customized blend of specialists for every client and as the “she-devil” every different project. and Meryl Streep as her adversary, www.webmcm.com Mary Fisher]. The translator of this coming Fay Weldon E-mail: [email protected] book, Marianne Alstermark lives in Cairo. An additional ALF publishing company author this coming spring, Bo Wiberg, lives in France. Ann regards the international spread of the business contacts as a benefi t.

26

Eastern European safari

economies of Eastern Europe where the fundamentals are all Crisis in Eastern but strong. With varyingly alarming current account defi cits, Europe: strong dependence on foreign investments (and loans) and relatively modest export sectors, many of these countries are now in dire straights. What One of the worst hit markets in Eastern Europe is Ukraine, where the stock market has dropped almost 80% during the doesn’t last year, the currency is record breaking low and the infl ation high. Ukraine has in essence been -much like Iceland- close to bankruptcy, something which made the IMF react by granting an kill you emergency loan to the country. The political turmoil of Ukraine also couldn’t come at a worse time. Next year Ukraine has to pay back even bigger international loans, while the president makes you and prime minister continue to fi ght, and the near future looks very challenging. stronger? Besides Ukraine, also Hungary has received an emergency intervention by the IMF. With a relatively high public debt (60% While Eastern Europe of GDP), Hungary has been living over its means, and is now has been an exciting experiencing major uncertainty with regards to the country’s display of investment opportunities and high fi nancial future. GDP growth fi gures for the last decade, latest While Hungary and Ukraine have already made explicit statements that their economies are in need of foreign by now it is clear for everyone that the party is assistance, the international markets are turning to see when over. The really interesting questions, however, (if) Bulgaria and Romania will do the same. As written in the are how low the Eastern European countries last Eastern European Safari column, here Bulgaria seems to be worse off. With one of the highest current account defi cits in the will sink and what the future of the region is. region, a big property bubble bursting and a still quite ineffi cient We all know the story by now; The American fi scal policies (i.e. corrupt) system of government, Bulgaria could well need created an over-leveraged economy, which drew the country and signifi cant assistance in coping with the crisis relatively soon. most of the world into an unprecedented recession. One could The Baltic countries have yet not needed any outside say this was ”moderately unfortunate” for many established intervention for controlling or stopping the freefall the EU countries (like e.g. Sweden and Finland), who now have to economies de facto are in today. Especially in the case of take a breath Latvia and Estonia, even the term ”hard landing” seems like a for a couple of premature and positive term, since nobody knows how low they years before they have to go for the current freefall to stop. The links with the are back on the Nordic banking system (which largely enabled the boom in the steadily growing fi rst place) is, however, now a blessing for both countries. While track. The the inevitably accruing banking credit losses may be big on a unemployment Baltic scale, they should will grow a little be totally manageable and banks may on a Nordic scale. As need additional the banking sector stays guarantees, but robust, the result will be a the fundamentals tough economic downturn, of these but not a collapse. The economies are Baltic economies also robust enough have very little public debt to wait out the and relatively stable and storm. effi cient governments. The more So far the international devastating fi nancial media has not effect, however, seemed too worried about is being seen in Russia’s survival in the the emerging global fi nancial crisis. While the Russian stock market has plunged time and again (down by over 75% in a year), the media is often reminding us of the huge Russian currency reserves, that can be used to stabilize the economy if needed. According to these sources, the over 500 billion USD reserves that were built up during the last years, should calm foreign investors who are about to lose their faith in the country as a credible investment target. The fact remains, however, that supporting the ruble, bailing out Russian companies and banks while also investing into renewing military equipment and mega-sized energy projects is very expensive even if you have the world’s third biggest cash reserve. The Russian reserves have lately on an average been falling by approximately 15-20 bn USD per week, peaking at over -30 bn USD per week during October. At this rate, and with the current oil prices adding further negative pressure, we should see a signifi cantly more careful Russia in the coming months, at least on the economic arena, but most probably also to some extent in the political rhetoric. It is clear that all of Eastern Europe is heavily hit by the global fi nancial crisis. For many countries, however, this should be seen as a healing process instead of as a catastrophe. As the growth euphoria withers away, asset prices fall and salary expectations becoming more realistic, the whole region becomes more attractive for foreign investment. After the storm blows over, the fundamental facts will still remain. Eastern Europe offers a nearby, low-cost, culturally similar region to Western Europe, with over 300 million ambitious consumers and markets with high long-term growth potential.

Martin Seppälä Dr Martin Seppälä has a Ph.D. (Econ.) in strategic management and is a partner at Excedea. [email protected]

Source for statistical data: The Economist 2008

Excedea

Excedea is a leading management and investment advisor in the Baltics and Eastern Europe.

Services provided include supporting Nordic companies and investors to succeed in the Baltics and Eastern Europe through market analysis, growth strategy, partner searches and acquisition target analysis. Individual investors and investment funds are supported for their investments in the area and high-growth companies are helped to crystallize their ambition level and strategy, assisting them to internationalize and to fi nance the growth.

Excedea Aia 3-3 Tel: +372 712 0053 10111 Tallinn Fax: +372 627 1221 Estonia [email protected] www.excedea.com 28

The Swedish “Miljon-programmet” ended up with a newsfl ashes suffi cient number of apartments built, but the quality in terms of living environment was indeed doubtful.

- Realizing this pressure there is a risk for a new mass Real estate production of poor housing environments, commented As the real estate a Swedish real estate analyst the upcoming situation. market slows down There will be around 800.000 Swedish youth aged 18 – 24 all over Europe, a looking for a living space in fi ve years time. major Danish broker has taken a grip to The Swedish accommodation problems will be most acute put new life into its in the bigger city areas. That is where the labour market slumbering sales. is most intensive and that is also where the possibilities Their concept includes for a further higher academic education exist. an invitation to potential customers - From a general point of view, youth shouldn’t have to for a weeks test living turn to new production dwellings for their living needs, in an object before concluded the Swedish real estate analyst. That will making their fi nal always be more expensive than living in apartments and decision. fl ats built in the earlier days.

- Basically it’s about - More or less thirty-fi ve years ago I bought a house having the premises a located between Stockholm-Arlanda airport and bit for yourself a while, downtown Stockholm, commented a Swede to focus. instead of having It takes you some 20 minutes to commute to central a broker hanging Stockholm and the current costs of mortgages and over your shoulders, rents are around SEK 1.500.- per month (EEK 2.500.-/ commented a real month). Swedish real estate tax, electricity, insurance, estate broker. water and waste should of course be added but still, the total living costs for this 200 sqm private house and 3.000 And, since the premises are empty anyway, the idea is not sqm of land is survivable compared to what the youth bad at all. of today can expect in terms of Swedish monthly living costs. As Copenhagen reports 18.000 empty downtown fl ats and neighbouring suburban houses, Sweden seems to face quite a different future real estate situation. Sky high traffi c incomes over A record number of babies were born 1988-1992 in Sweden and this means that 50.000 new dwellings have Estonia increases to be built in the next fi ve years. Remembering “Miljon- programmet” (the million-program) towards the end of the 1960’s, concerns have been raised in Sweden on the outcome of this urgent need for new housings.

Estonian Air Navigation Services - EANS has guided 16% more fl ights passing Estonian air space compared to one year ago. This is indeed an impressive growth since the total increase of European fl ights year-to-date ended up at 2.7%.

Estonian air space has become popular among many 29 intercontinental air carriers and the increase is more or less totally connected to long haul fl ights between the Far East and Europe. newsfl ashes EANS themselves sites three main reasons - They are more positive to migration and social behind the increase; minorities Estonia is located on - Working on distance – from home or commuting to the great circle route another city – doesn’t cause any major problems for between the Far East a Stockholmer and the major European - They feel more directly connected to the Swedish airports. EANS has society increased their capacity - They are generally more critical than fellow country in terms of the number side Swedes of fl ights that could be - They regard themselves having bigger opportunities served and the Estonian to infl uence their own life en-route air navigation - They don’t trust their neighbours service fees charged to the over fl ying airlines are - They are more positive to consumption and are more favourable. open for eCommerce

EANS reported a 9% revenue increase year-to-date A comparable study of Tallinners attitudes is not and expects the east-west traffi c to increase more even available, but in a comment the County of Stockholm said though north-south traffi c with Finnair as the biggest that the outcome of this study coincides quite well with single customer still dominates Estonian air space. similar fi ndings in Oslo and Copenhagen.

Urban attitudes World Economic Forum’s Global Competitiveness Rankings Each year World Economic Forum publishes their Global Competitiveness Ranking. The rankings are calculated from publicly available data and the Executive Opinion Survey - a comprehensive annual survey conducted by the World Economic Forum in the countries covered by the report.

This year, over 12,000 business leaders were polled in a record 134 global economies. The survey is designed to capture a broad range of factors affecting an economy’s business climate.

Country Ranking 2008/09 Ranking 2007/08 USA 1 1 With approximately 10% of the Swedish population living Switzerland 2 2 in greater Stockholm (900.000 urban people) the regional Denmark 3 3 planning offi ce of the County of Stockholm found reasons Sweden 4 4 to map their attitudes and compare them with non- Finland 6 6 suburban peoples’. Norway 15 16 The research was performed this autumn and the main Estonia 32 27 attitude differences included: Lithuania 44 38 Latvia 54 45 - Stockholm urban inhabitants are responding faster to technical innovations - In an uncertain global fi nancial environment it is more 30

proposals given might very well be applicable for any State, e.g. Estonia. Here is a very short summary: newsfl ashes - A good entrepreneurial climate is the most important base for growth on the international marketplace. important than Creating good conditions for research, development and ever for countries education create a competitive edge and are necessary to put into place components in the enterprise politics. the fundamentals underpinning - Supporting economic growth companies’ and development, growth on foreign said Klaus Schwab, markets should Founder and be integrated with Executive Chairman of the enterprise the World Economic politics. This Forum, in a comment. support should The World Economic be regarded as Forum has for many the international years played a dimension of facilitating role in this the domestic process by providing enterprise detailed assessments politics. Few long of the productive potential of term political nations worldwide. The Global enterprise goals Competitiveness Report 2008- can be achieved 2009 offers policy-makers and if the ambitions for growth are limited to the domestic business leaders an important tool in the formulation of market. improved economic policies and institutional reforms. - State support should be governed by actual needs The full report, highlights, summary, economy profi les, and concentrated to growing small and medium sized rankings and more is available at: www.weforum.org/gcr. companies with a potential on foreign markets.

The full report (Swedish language) has been distributed Swedish Exports: to all Swedish Chambers of Commerce abroad and is available in .pdf format. Please contact SCCE’s Ombudsman Kristiina Sikk for a personal electronic copy State support is a key issue (E-mail: [email protected] Tel: (+372) 501 for export success 9813) Hotel Telegraaf – on the prestigious international exclusive hotels top lists Tallinn’s Hotel Telegraaf has established itself on the prestigious lists of exclusive hotels published by the major international travel and business media.

Following the appearance of the Swedish export paradox, Condé Nast Traveller’s CNTraveller.com has named the Swedish Government placed a 2007 order for a Tallinn’s Hotel Telegraaf as one of the world’s “65 most comprehensive study and report on Swedish exports. The stylish, most innovative, most luxurious hotels…” export paradox refers to the fact that Swedish exports have developed strongly the last decades but at the same “How refreshing, in this age of e-mail,” reads time Sweden shows a decreasing trend in its export share CNTraveller’s review, “to fi nd a hotel called the Telegraaf, on the global market. housed in a 19th-century post offi ce, with suites dedicated to Samuel Morse and Alexander Graham Bell. But this focus has read the report and found out that the 31 newsfl ashes CNBC’s jury consisted of industry experts and the magazine’s travelling readers and Stockholm’s Grand Hotel was also named among Europe’s best. No other hotels in the Baltic States or Finland placed among the top 25.

The award places the Telegraaf in the company of such legends as the Four Seasons George V in Paris, Claridge’s in London, and Berlin’s Adlon Hotel.

86-room property in the heart of the Old Town is anything but old-fashioned…” Increased support for the - We’re of course very pleased, said Hotel Telegraaf’s Euro in Sweden General Manager, Michael J. J. Stenner. This is not only a great honour for the hotel, but it is recognition for Tallinn as well.

Michael Stenner drew attention to Condé Nast’s specifi c mention of Tallinn in its review: “…like its sibling hotel, The Three Sisters - is a good example of how Tallinn successfully combines a sense of history with 21st- century comforts.”

In addition to Condé Nast Traveller’s CNTraveller. com, CNBC European Business, the monthly business magazine, has named Hotel Telegraaf among its “Top 25 Business Hotels 2008.”

In naming the hotel one of Europe’s fi nest, the magazine called the Telegraaf a “modern, sophisticated hotel with a stunning façade.”

- We are of course extremely pleased with this honour as well, said Michael Stenner, quoting from the magazine that the Telegraaf was ’geared up for business meetings.’ From the very beginning Telegraaf was conceived as a January 1st, 2009 marks the 10 years anniversary of the business hotel and we are pleased that our hard work is introduction of the Euro. visible to both guests and industry experts. At a Swedish 2003 general election the outcome became a clear No!; Swedes wanted to keep the Krona.

A recent poll shows however that the support for the Euro in Sweden has increased quite remarkably. Analysts say that the reason is the weakening value of the Swedish Krona; at the beginning of December 2008 a Euro costed well above 10 SEK.

From a historical perspective Swedes’ opinion to the Euro has varied. A majority was positive to the Euro during a short period 1999 and during 2001 up to mid-2002. But in connection with the political campaigns before the general election on the issue 2003, the pro-Euro share of Swedes decreased substantially.

Most Swedish politicians are today keeping a low profi le 32 Three Sisters keep newsfl ashes its Wine Card on world top The Three Sisters on the issue and commentators say that they most likely Hotel, known for wait for polls showing a clear and absolute majority for providing fi ve- the Euro before any plans for a new general election on star boutique the issue will be proposed. accommodations and service in a design- conscious setting Tchaikovsky named in the Tallinn Old Town, has been awarded amongst the “25 Best two years in a row with the Hotel Restaurants in prestigious Wine Spectator award.

Europe” The Wine Spectator award recognizes restaurants whose wine lists offer breadth, depth of vintages, and appropriate selections for the restaurant’s cuisine. The 2008 awards were announced in the Wine Spectator magazine and on the Wine Spectator website. Both recognized as leading authorities and resources on wine and dining worldwide.

The Three Sisters Restaurant, whose wine list garnered the award, was required to present a wine list that was complete, accurate, balanced and well presented. Additionally, to qualify for the award, a restaurant must offer a minimum of 100 bottle selections and a variety of wines by the glass. The Three Sisters offers over 400 kinds of wines and more than 20 wines by the glass. The elite Russian magazine Elite Life & Travel has named Hotel Telegraaf’s Restaurant Tchaikovsky as one The Three of Europe’s 25 best hotel restaurants. Sisters is pleased to recognize Tchaikovsky is the only restaurant in the Baltics and sommelier and Scandinavia to receive the honour. Food & Beverage Manager Kristjan - To be the only restaurant to win in the entire Nordic is Peäske, who a great honour, said Michael Stenner, Telegraaf Hotel’s has successfully General Manager. It is yet more proof that Estonian hotels continued the can compete with anyone, anywhere. great work started by Jennifer The magazine places Tchaikovsky in the company Mitchell. Three of such greats as Alain Ducasse au Plaza Athenee, Sisters reputation Goya Restaurant in Hotel Ritz Madrid, Le Cinq at as the “wine Four Seasons Hotel George V and Gordon Ramsay at hotel of Eastern Claridge’s. Europe” only continues to grow. The restaurants were judged according to four criteria: environment, taste, atmosphere and nuance. The magazine remarked on Chef Igor Andrejev’s menu and its adherence to Tsarist traditions—taste, health, and progressive cuisine. Volvo Estonia opens a new Truck Center in Tallinn

In today’s internationalized business environment local market expertise in accounting, auditing and tax consulting is not enough. Rödl & Partner opens the doors both to the national and international marketplaces with 2550 experts employed at 80 cities in 38 countries around the world.

Volvo Trucks subsidiary in Estonia has opened a new Volvo Truck Center in Tallinn. The new Center is the biggest in Estonia and together with the additional Volvo Truck Centers in Pärnu Personal Service and Tartu, Volvo Trucks service network in Estonia has been You always cooperate with one signifi cantly developed further. and the same person at Rödl & Partner. - Broadening our range of services and getting closer to the customer is a cornerstone in our strategy, said Tom Jörning, Full service Managing Director of Region Central-East within Volvo Trucks, Being entrepreneurs ourselves, we EUD at the November 27th opening. fully understand our customers The 2.250 sqm Truck Center will be a multifunctional service need to focus on their business station and will offer a full range of Volvo products and services, core values. including workshop services, sales of trucks and genuine Volvo parts. In addition to this, a trucks’ washing bay and an AdBlue station will be available. The new premises will also house the Rödl & Partner is a one-stop head offi ce for Volvo Estonia market organisation. service organization:

- This year, the economic situation has changed for all parties Auditing on the Estonian, European and global market places, said Johannes Kjellgren, Managing Director of Volvo Estonia. Accounting Tax Consulting - Due to this, effi ciency and optimal solutions are new keywords. 2009 will be a tough year for many companies, not only in the Legal Consulting transport business. It is important that we keep a long term strategy and, at the same time try to adjust to a short term situation. Globally and in a long term, there is no doubt that road Global service transport will grow. There are more and more people, who need Rödl & Partner is present more and more goods, and the most fl exible system today is where business is present. road transport with trucks. ce we - With new services and products in hand, we have to make communicate in Estonian, an effort to continue profi table growth with our customers, English, German, Swedish concluded Johannes Kjellgren. and Russian.

The new Volvo Truck Center in Tallinn is conveniently and truck-friendly located in the Rae Technological Park, near the Tallinn-Tartu road at Kurekivi 10, Lehmja, 75306 Rae. The new premises will be open Monday to Friday from 8:00 am to 8:00 pm, Saturdays and Sundays from 8:00 am to 5:00 pm, closed on Rödl & Partner public holidays. 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M?D:7AIKEC;DBE=?IJ??AA7J7BE Contributions to from the members of SCCE, both in terms of editorial content and advertising, are welcomed. If you haven’t already done it - please do put us on the mailing list for pressreleases, As I write this it has become that time of the year when articles as well as your point- boxes are pulled out of the cupboards and decorations for Keeping the Estonian tax system of-view on issues of general Advent, Christmas and New Year simple, stable and transparent is interest for the commerce are put up. the topic for one of FICE’s – the Foreign Investors’ Council in and trade between Estonia Some of the festive season’s items Estonia, work groups. FICE’s work and Sweden. You can reach in my home are of Swedish origin, groups are presented in this is- me at email: kristiina@ like Lucia och Stjärngossen [Lucia sue of focus and hopefully many swedishchamber.ee or by and the Star boy]. They were SCCE’s members are contributing designed by the Swedish ceramist to their work with input, opinions phone: (+372) 501 9813. The Lisa Larson who also, more than and proposals. focus advertising opportunities thirty years ago, made a money-box including sizes, prices and in the shape of the former Swedish Almost fi fty years ago, Lena technical requirements are Minister of Finance, Gunnar Sträng. Larsson - a Swedish furniture- available at our website: www. and interior-designer, initiated an I don’t have that latter piece of intensive debate in Sweden. Back in swedishchamber.ee. ceramics but I think it is very 1960 she published an article in the symbolic for our days as well. Swedish design magazine ‘Form’ Latest news on SCCE events Economical growth is replaced with headlined: “Buy, wear out and recession and economizing is now a throw away”. to come and fresh reports key issue – both in the public and private sectors. on events passed are always The resulting intensive debate found at: Gunnar Sträng was a long time of the early 1960’s was polarized www.swedishchamber.ee. Minister of Finance in Sweden and between those wanting to preserve he kept this post for 21 years, from the old and those who wanted 1955 to 1976. As the Swedish tax something new. system became more and more complicated and as taxes grew Going from something old to higher and higher, I am told that something new was an outcome Gunnar Sträng developed a certain of May of ’68 – the students’ revolution in France. In connection kind of ‘Strängish’ authority within with focus series of articles on this year’s 90th Anniversary his fi eld of Swedish politics. of the Republic of Estonia we have now looked back to 1968, forty years ago, and the May of ’68 events are included in this In the beginning of 1976, Astrid chronicle. Lindgren – the Swedish author of Pippi Longstocking and many Lena Larsson’s 1960 concept is to some extent still up in today’s other beautiful children stories, debate and now as a contrast. As focus met Maud Olofsson, found out that she paid more in tax Sweden’s Minister for Enterprise & Energy and Deputy Prime than what she earned. She wrote a Minister, today’s contrasts to the buy, wear out and throw story about it and it was published in a Swedish daily newspaper away concept were highlighted. Nowadays renewability, as ‘Pomperipossa in Monismanien’. Pomperipossa was Astrid sustainability and recycling are key issues, not only in the Lindgren’s alter ego in the story and she says somewhat upset: energy sector, but in many ways also in our daily work and “So many percent that I pay in tax, so many percent simply don’t private lives. exist”.

Like every other Swede, Gunnar It seems that 2009 will be even more challenging than this Sträng also read the story. He felt year and I look forward to seeing you at the coming seminars, the need of commenting and went meetings, study visits and events arranged by the Swedish up in the Swedish Parliament and Chamber of Commerce in Estonia. Meanwhile I wish you all a said, obviously with some typical Merry Christmas and a Happy New Year - however challenging authority of his: “Mrs Lindgren is an it might become. excellent story teller, but she can’t count.” I hope you enjoy reading this issue of and latest news on SCCE events to come and reports on events passed are always Astrid Lindgren was however totally correct in her calculations and made found at: www.swedishchamber.ee. a comment of her own to Gunnar Sträng: “Gunnar Sträng has always been good in telling stories, but he has never learnt to count. Maybe we Sincerely, should exchange jobs.”

This March 1976 event became to be considered as one of the Kristiina Sikk contributing factors behind Gunnar Sträng’s party, the Social SCCE Ombudsman Democrats, loosing that year’s Swedish elections.