Estonian Review E E S T I R I N G V A A D E VOLUME 17 NO 11 MAR 14- 20, 2007

FOREIGN NEWS President Ilves Underlined Importance of Strong Estonian-Finnish Relations Mar 14 - Speaking during his state visit in the Finnish presidential palace, Estonian President underlined the importance of strong links between the two countries. In his speech at the festive dinner hosted by Finnish President Tarja Halonen Ilves spoke about the strong ties that had united and through history, quoting the example of cooperation between civil societies. He said it was difficult to find a choir, school or congregation that had not visited friends on the other side of the gulf. Finnish President Tarja Halonen and Estonian Ilves said that the countries were closely President Toomas Hendrik Ilves in , 14 connected also in economic terms. He underlined March. that Finnish investments accounted for one fifth of the total investments into Estonia and Estonian companies were getting more and more interested FOREIGN NEWS in expanding to Finland. Halonen, Ilves Agreed that Strength of EU Is He said that in order to preserve the rising in Finland’s and Estonia’s Interest trend of economic development in the Baltic Sea area all innovative efforts would have to be Mar 14 - Estonian President Toomas Hendrik Ilves, united. "A good example in point is the science currently on a state visit to Finland, met with bridge between Tallinn Technical University and Finnish President Tarja Halonen; both share the Helsinki University in the joint acquisition and use view that the strength of the European Union (EU) is of labs and technical equipment," Ilves said. in the interests of small countries such as Estonia He summed up his speech saying that as and Finland. member countries of the EU efforts of Estonia and "We should have more acknowledged cooperation with Finland were directed at widening the area of that purpose, and not take the European Union as peace, welfare and security in the world. something self-evident," the president's office reported Ilves as saying. "We wish to belong to the core of the European Union, consisting of considerable, predictable and effective countries." Ilves added that Finland was an example to Estonia of how to build up coordination with the EU and strive into the midst of effective and predictable member countries. Speaking about the two countries' relations, Ilves said that contacts between Estonia and Finland were closer and more versatile than ever before. To characterize the cooperation the Estonian president used the expression, Estonian-Finnish unprecedented special relationship. "Looking into the future cooperation between us should be promoted in the scientific and innovation spheres in order to jointly contribute to making the Baltic Sea area more science-intensive and competitive," he added. Speaking about energy issues Ilves said that to develop the domestic market additional links should be created between Estonia and Finland in addition to the Estlink sea cable. He added that Estonia was interested in building an Estlink 2 power cable. Referring to the Russian-German gas pipeline the two presidents found that all environmental concerns must be President Ilves and his wife Evelin sailed assessed before its construction could be launched. to Finland aboard the flagship of Estonian Navy, the Admiral Pitka. Continued on page 2

FOREIGN NEWS organizations and journalists have been invited to take part in the conference. Menadbe, who is familiar with the health systems Continued from page 1 of more than 50 countries, commented on the Estonian health system that during the past couple "As it is, the impression has remained that the of years Estonia had taken a number of radical developer's attitude to assessing the environmental decisions pertaining to its health system, and the impact has been like to a formality," the Estonian development of the system was positive as a result. head of state said. In Menadbe's opinion Estonia should formulate its He underlined that until the present there had future plans for the development of its health been no cooperation with Estonia in planning the gas system, entering into an open dialogue also with pipeline, although it should be built in the immediate other spheres. Besides, she said, Estonia should vicinity of the Estonian economic zone. increase the number of workers in the public health Speaking about EU neighbourhood policy the sector, particularly that of nurses. Estonian president said that it was essential to prevent feelings of disappointment and desertion in Foreign Minister Paet: Estonia and countries trying to reform themselves. This requires Schleswig-Holstein Have Many clear devotion as well as visible investment into Opportunities of Cooperation those countries, he said. In case of , Ilves reiterated an earlier idea Mar 15 - Estonian Foreign Minister Urmas Paet that the attitude where Russia saw democratic said at a meeting with Peter Harry Carstensen, developments in its neighbourhood as a threat to its prime minister of the German state of security and as damaging its "legitimate" interests, Schleswig-Holstein, that Estonia had good did not confirm an approach proceeding from cooperation opportunities with that German common values, on which the strategic partnership state in the area of economy, renewable between the European Union and Russia was based. energy and higher education. The Ecology Institute of Tallinn University is Estonia to Host WHO Ministerial interested in cooperation in coastal studies with Conference Next Year Schleswig-Holstein. The Tallinn Technical University Maritime Systems Institute wants to have closer Mar 15 - Representatives of the World Health cooperation with the Kiel Institute of Coastal Organization (WHO) and the Estonian Ministry Research and the GKSS research centre. of Social Affairs signed an agreement on the Speaking about the Constitutional Treaty, Paet organization of the WHO ministerial conference said that Estonia considered it to be very important. in Tallinn next year. "We want endorsement of the Constitutional Nata Menabde, Director, Division of Country Treaty with as small changes as possible. If we were Support, WHO Regional Office for Europe, and to consider the possible alternatives, we would Estonian Minister of Social Affairs Jaak Aab signed at rather see the opportunity of adding to than the Ministry of Foreign Affairs a memorandum of contracting the treaty, because this does not mutual understanding according to which the WHO correspond to expectations of citizens of the European regional conference on health systems will European Union in today's changed world," Paet take place in Estonia next year. added. "The conference will hopefully have strong The foreign minister thanked Carstensen for positive influence both on health systems as well as support by Tallinn's twin town in Schleswig-Holstein, on the socio-economic development of European Kiel, to the Estonian capital's application to become member countries in general," Prime Minister Andrus a European capital of Culture in 2001. Ansip said. Agriculture Minister Ester Tuiksoo, meeting with The conference will be organized by the WHO Carstensen, discussed further cooperation in the bio regional office and the aim of the event is to pay energy sphere, one of the German priorities during more attention to public health in the political its presidency of the European Union. Cooperation in agenda. The conference will give a more accurate the bio energy sphere embraces the training of understanding of the influence of European health officials, organizing seminars, joint research and systems on the people's health and consequently analysis of the effectiveness of different types of also on economic growth. renewable energy. WHO will organize an extensive series of meetings for preparations to the conference. So far Estonia and Russia Signed Memorandum member countries have had two advisory meetings on Fight Against Economic Crime to discuss and find the main issues. Three more meetings of the member countries Mar 19 - The Estonian Tax and Customs Board are planned for the forthcoming months. The first of and the Russian Interior Ministry signed a them will take place on March 29-30 in Brussels and memorandum of understanding in Moscow will focus on the functioning and results of health aimed at intensifying cooperation between the systems. two countries in the fight against economic The ministerial conference will take place on June crimes. 18-20 in Tallinn with about 500 participants The memorandum lays the groundwork for expected to the two and a half day event. cooperation in areas of mutual interest, such as Delegations from all the 53 member countries of the exchanges of information about tax crimes and European region of WHO, experts, observers, other kinds of economic crime, arranging of common representatives of international and public events aimed to help solve, prevent and combat In connection with the accident at the crimes. Ulyanovskaya mine in the Kemerovo region and the The cooperation would be based on valid national fire in the Kamyshevatskaya old people's home in laws. As one of the most important goals, the the Krasnodar area, the president expressed deep document names strengthening of cooperation condolences on his own behalf and on behalf of within the framework of such international Estonia to the Russian people and the victims' organizations as Interpol, Europol, and the Council families and close ones. of the Baltic Sea States. Also the Estonian foreign minister, Urmas Paet, expressed his condolences to his Russian Another Schengen Evaluation Mission counterpart Sergei Lavrov in connection with the Visiting Estonia two tragic accidents. Paet said he was deeply saddened by the news Mar 19 - A group of members of the Schengen and expressed his deepest condolences to the evaluation mission arrived in Estonia to families and colleagues of the victims and to the examine Estonia's ability to effectively protect people of the Russian Federation. personal data as a member of the Schengen area. The experts met with officials from the ministries of justice, interior and foreign affairs, as well as DEFENCE NEWS from the office of the legal chancellor and the Commander of 's Defence Forces parliamentary constitutional committee. Visited Estonia Experts from Schengen evaluation missions Mar 20 - The commander of the Austrian visited Estonia on several occasions last year, defence forces, Gen. Roland Ertl, arrived in evaluating the guarding of the sea and the land Estonia on 20 March for a two-day official visit. border, the work of the consular department of the Ertl met his Estonian counterpart, Maj. Gen. Estonian embassy in Kiev and of the consulate Ants Laaneots. general in St. Petersburg, among other things. During the meeting at the General Staff the Apart from a few remarks, Estonia's readiness to Austrian army commander was offered an overview accede to the Schengen area was generally of the directions of development of the Estonian evaluated positively. To join the Schengen area, a defence forces, their participation in foreign missions country must have passed all the necessary and contribution to NATO forces. Also talked about evaluations and fulfilled all the recommendations set were possible bilateral cooperation in the field of out in the reports. training. Ertl also visited the Estonian National Defence US Senate Supports Bill for Lifting Visa College and the Baltic Defence College in the Regime for Baltic States southern city of Tartu. Mar 14 - The US Senate has supported the bill Before coming to Estonia, Ertl visited , with amendments proposed by the Republicans meeting with the commander of that country's to introduce a visa-free regime with 12 armed forces, Maj. Gen. Valdas Tutkus. countries, including , Lithuania and Austria, which isn't a member of NATO, takes Estonia. part in international operations in Kosovo and US senator George Voinovich has proposed to lift Afghanistan. the visa regime for those countries who support the US in the fight against terrorism. Estonian Foreign Minister Urmas Paet said that ECONOMIC NEWS the US bill draft is a step forward in a favourable direction for us. “At the moment bill drafts have Currency rates in kroons been prepared both in the Senate and the Congress. (Bank of Estonia) The drafts need to be combined yet. We hope the process is fast and the result will be favourable for Media Company Ekspress Grupp is Going us,” Paet said. The US Congress still has to vote on the bill. Public Currently the US has a visa-free regime with 27 Mar 19 – Shares of Ekspress Group are being countries, mainly the old European Union (EU) offered in an initial public offering (IPO), the member states, except . Out of the new EU shares will be listed on the Tallinn stock member states who accessed the bloc in 2004, only exchange. has a visa-free regime with the US. "Ekspress Grupp is moving on to the Baltic The new bill envisages visa-free travel for citizens market where the aim is achieving a similar position of Bulgaria, Cyprus, the Czech Republic, Greece, like in Estonia, hence the decision of listing to Hungary, Estonia, Latvia, Lithuania, Malta, , support further expansion," said Hans H. Luik, the , and South Korea. owner of Ekspress Group. The aggregate net proceeds to the Company are President Ilves Sends Condolences to estimated to amount to approximately EEK 201 Russia's Putin over Mine Blast, Fire million. The first priority of the company is to use Victims the proceeds to finance the business development and expansion of the Group outside Estonia and to Mar 20 - Estonian President Toomas Hendrik maintain and enhance its position in the fast- Ilves sent a message of condolences to growing and new business segments, such as online Russian President in the wake media. of two major accidents in Russia which have There will be 5,321,481 new and existing shares claimed a large number of lives. in the combined offering, of which 2,873,600 shares

3 will be sold by the present shareholder HHL Rühm Over 500 Businesses founded in Estonia and 2,447,991 are new shares issued by Ekspress over Internet in 2007 Grupp. To cover potential over-allotments HHL Rühm has assumed the obligation of selling up to Mar 15 - More than 500 entrepreneurs have 798,222 additional shares. The shares offered make already made use of the possibility available up 32.26 percent of the total stock capital after the since the beginning of this year to set up a offer. business in Estonia over the Internet within During the 12-month lock-up period current two hours. shareholders are not allowed to sell or otherwise Applications for first-time entry into the transfer shares of the company without a written commercial register have been filed via the portal consent of the global coordinator. managed by the Justice Ministry's center for The price range for the subscription to the shares registers and information systems by 509 private will be from 81.35 to 97.00 kroons (EUR 5.20-6.20) limited companies, 23 self-employed persons, four per share. Subscription is open in all Estonian limited partnerships and three general partnerships. central register of securities account management Viljar Peep, who heads the service overseeing banks. Subscription period lasts until March 29. The registers at the Justice Ministry, said the originally offer prices and the allocation of shares will be made established goal had been fulfilled. public on March 30. The first day of trading of "It is possible to establish a business in two Ekspress Grupp shares on the Tallinn stock hours," Peep said. exchange will presumably be on April 5. The The ministry is planning to make a wider range of coordinator of the IPO is Suprema Securities with services executable by sped-up procedures in the Hansapank as joint manager of the retail offering. future and create a version of the portal in a foreign Ekspress Grupp's subsidiaries are Eesti Ekspressi language. Kirjastuse AS, Rahva Raamat, Printall, Ekspress Ideas how to make the online filing of reports for Hotline with its subsidiaries, Ekspress Leidyba and the financial year simpler are also being weighed. Ekspress Internet. Affiliated companies include Eesti Päevalehe AS, SL Õhtuleht, Ajakirjade Kirjastus, Finnair May Add One Flight on Tallinn- Express Post, Netikuulutused, Linnaleht and Helsinki Line Medipresa. Mar 20 - The Finnish carrier Finnair is holding Turnover of the Group in 2006 totalled 929 cooperation talks with the Finncom airline as a million kroons and net profit 94 million kroons. The result of which Finnair may add one daily flight group employs nearly 2,000 people. After the IPO, on the Helsinki-Tallinn route as it adopts the new investors own nearly one third of shares in summer flight schedule on March 25. Ekspress Grupp. Finnair's sales manager for the Baltic region

Kimmo Rautiainen said the objective of the talks is Average Productivity Growth in Industry to increase the frequency of flights between Helsinki Was 15.7 Percent and Tallinn after the summer schedule but Mar 15 - Average productivity in Estonia's depending on the progress of the negotiations one industry was 250,000 kroons (EUR 15,970) in new flight may be added already to the summer the final quarter of 2006, a figure 15.7 percent program. higher than in the same quarter of 2005. Finnair will be responsible for marketing and Even though in the first quarter of last year sales while the service will be operated by Finncom. average productivity in industry declined by 3,000 The Finnish carrier uses the same practice for its kroons from the final quarter of 2005 to stand at existing Helsinki-Tallinn flights which are served by 213,000 kroons, growth in productivity continued in its subsidiary Aero Airlines. the later part of the year. According to Rautiainen, Aero Airlines will Average productivity in industry was 233,000 continue operating flights between the Finnish and kroons in the second quarter and 228,000 kroons in Estonian capitals alongside Finncom but the number the third quarter. of its flights may decrease. In a breakdown by sectors, average productivity "The situation is open right now, clarity should in the fourth quarter was 244,000 kroons in come within a month," he added. At present Finnair manufacturing, 157,000 kroons in mining and has six daily flights on the Helsinki-Tallinn route on 470,000 kroons in electricity, steam and hot water Saturdays and eight flights on other days of the supply. week. The airline will shift to the summer timetable In manufacturing, productivity was highest in the on March 25 and back to the winter schedule on Oct. fourth quarter in the manufacture of office 28. machinery and computers, where it reached 810,000 kroons. Manufacture of garments stood at Garment Retailer Baltika Opens First Ivo the bottom of the table with 64,000 kroons. Nikkolo Store Abroad Average productivity per hour in Estonia's Mar 20 - The Estonian clothing maker and industry was 562 kroons in the final quarter of 2006, retailer Baltika opened an Ivo Nikkolo store in an increase of 16.6 percent over the same period a the largest shopping mall of the Lithuanian year ago. capital Vilnius. In electricity, steam and hot water supply hourly This is the first store outside Estonia selling the productivity was 1,023 kroons and in mining it was Ivo Nikkolo brand. The shop in Lithuania is the first 391 kroons. step towards making the Ivo Nikkolo brand known in The highest figure was reported also by the the Baltic states, brand manager Kaja Milder said. sector manufacturing office machinery and "Our aim is for Ivo Nikkolo to be represented in all computers, where hourly productivity reached 1,696 Baltic states by the end of the year," she said. kroons.

4 The next store will according to Milder open in Lithuania in April and the brand will reach Latvia in ESTONIAN REVIEW the second half of this year. (ISSN 1023-1951) "The next five years' plan is to develop Ivo Is issued by the Nikkolo into a renown fashion brand in its segment Press and Information Department, Ministry of Foreign Affairs ISLANDI VÄLJAK 1, TALLINN, ESTONIA 15049 in whole central and Eastern Europe," Milder said. TEL +372 637 7600 The Tallinn-based Baltika Grupp is a garment FAX +372 637 7617 retail group doing business on the Baltic and East Estonian Review is also available over the European markets. The group operates Monton, Internet at http://www.vm.ee Mosaic, Baltman and Ivo Nikkolo retail chains in six To subscribe, please contact: [email protected] countries -- Estonia, Latvia, Lithuania, , Ukraine and Russia. The company has 118 stores on the six markets.

Number of Mobile Calls in Estonia up by More Than Fifth in 2006 Mar 20 - Last year a total of 1.57 billion calls was made in Estonian mobile telephone networks, which is nearly 22 percent more compared with 1.3 billion calls in 2005. People made 1.22 billion kroons in domestic mobile networks of which calls within one network made up 727.2 million and calls into other domestic networks, 493.5 million. Calls into other countries numbered 16.8 million, calls from other countries into Estonia, 14.1 million and calls made abroad, 23.6 million. The aggregate call time, at 1.74 billion minutes, was nearly 34 percent up from the previous year. The number of SMS messages grew by nearly half year-on-year, from 144.8 million to 216.3 million. Some 1.8 million messages sent last year were multimedia messages.

Tallink Reports Faster Growth in Passenger Traffic for February Mar 15 - Vessels of the Estonian shipping group Tallink carried 455,727 passengers in February, 137 percent more than in the same month in 2006. In December and January the monthly numbers of passengers were 123 percent higher than in the respective months a year ago, Tallink said. In the second quarter of the financial year starting December Tallink carried 1,361,946 passengers, an annual increase of almost 128 percent. Passengers of Tallink travelling between Estonia and Finland numbered 161,419 in February, a year- on-year increase of 3.5 percent. The number of passengers between Estonia and declined 4.8 percent to 34,333 people. On the routes between Finland and Sweden Tallink's vessels carried 244,641 people in February. On the Latvia-Sweden route the number was 9,061 and on the Finland- route it was 6,273. Cargo units carried during February numbered 28,844, an annual increase of 182 percent. The number of passenger vehicles carried by Tallink grew 102 percent to 30,037. Capacities in the low season are usually affected by scheduled dry-dockings of vessels, Tallink observed. It said some differences in the volumes handled by different routes result from the fact that the number of vessels and of days in dry-docking differ from year to year.

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