CER | Estonia shows strong economic growth in Q3

Tallinn's English water

Britain's International Water United Utilities won a bid to purchase 50.4 per cent of utility Tallinna Vesi (Tallinn Water) from the city by paying EEK (Estonian kroons) 1.338 billion for the profit-making utility. The new owners pledged to keep prices steady for several years and to invest heavily into the rebuilding of the city's sewerage system.

Final bids for Tallinna Vesi were submitted on 1 December by International Water and France's Générale de Eaux, as Northumbrian Water Group dropped out at the end. International Water is a consortium of International Water and United Utilities, both from Britain. The original minimum tender price was EEK 580 million.

Prisoners with empty bellies

Prisoners from five prisons around the country began a hunger strike last week protesting new rules increasing the workload of prisoners, as well as mandatory payment of damages to their victims from their personal bank accounts. The protest began the morning of 1 December when over a thousand prisoners refused to eat their breakfast.

In response, prison authorities have been donating plenty of surplus food to charities and homeless shelters. By early this past week, over two thousand prisoners were refusing food, but that ended soon after, as the protest petered out. Only a few hundred remained on the strike at the time of writing.

The new rules stipulate that convicted criminals would have half of their bank accounts seized to pay damages to their victims—a change from the current law that allows only the garnishing of new wages (usually the token prison wage). Justice Minister Märt Rask refused to compromise on the rule changes, suggesting convicts were not willing to pay for their crimes. The rule changes also put more prisoners to work.

Strong Q3 growth

The Statistics Department announced this past week that preliminary figures show that GDP in the third quarter grew by 6.9 per cent, year-on-year. Analysts earlier in the week predicted between 6 and 7.2 per cent growth, just above the average calculated from the country's main analysts. This follows the strong second quarter growth of 7.4 per cent. However, analysts are forecasting a slightly lower growth rate in the fourth quarter.

Milestone end for voucher privatisation

Estonia's voucher privatisation programme reached a milestone, as 1 December was the final day to use the vouchers to purchase national or municipal property. The vouchers will remain in effect until 1 July 2002 for the privatisation of land or to help satisfy loans.

There is an estimated EEK 1.8 billion worth of vouchers still outstanding, with over EEK 11 billion worth of them used in the seven years of the programme. The last significant usage of the vouchers came with the purchase of the Tallinn Broadcasting Centre by Télédiffusion de France in November, where half of the purchase price was concluded by vouchers.

End of ferry to Sweden?

There remains confusion over the fate of the Tallinn-Stockholm ferry line operated by Estline, as the company signed a contract selling its two largest ferries to Hansatee, which operates one of the many Tallinn-Helsinki ferry routes. The transfer of the Regina Baltica and the Baltic Kristina is causing confusion to travellers, as Estline announced their withdrawal from service despite having sold tickets for later trips.

Speculation loomed for weeks about the fate of the only ferry line to link Tallinn and Stockholm since Estline stopped booking tickets for trips in 2001 several weeks ago. Estline, owned by the Estonian Shipping Company, decided earlier to strip itself of the unprofitable passenger ferry line.

Another confrontation?

There could be another confrontation between President Lennart Meri and the Parliament over the post of legal chancellor, the highest legal review post in the country. Meri has proposed two names: King's College (London) law Professor Rein Müllerson and attorney Kaido Pihlakas. Both are facing opposition.

Members of the ruling coalition have spoken out against Müllerson, who is seen as Meri's top choice, due to various factors. They argue that Müllerson, as an international law and human rights specialist, has less expereince dealing with domestic legal issues—vital for the job. Also, Müllerson's past role as international legal advisor to Soviet President Mikhail Gorbachev, couple with accusations of being against Estonia's restoration of independence and citizenship law, has angered some lawmakers.

And in other news...

Defence Ministry Chancellor Tarmo Mänd resigned, becoming the seventh ministerial chancellor to leave the post in the 20 months of this government. Though no comments are being made, many believe Defence Minister Jüri Luik and Mänd fell out over the past year over various controversies. No replacement candidates have been officially named .
Defence Minister Luik and Defence Forces commander Rear Admiral Tarmo Kõuts laid the cornerstone of the new military base in Tapa.
Centre Party member Imre Liiv was elected as Narva's mayor this past week. He replaced another Centrist, Eldar Efendijev, who was ousted by an opposition-sponsored no confidence vote weeks ago.
An estimated four to five thousand pensioners protested in front of the Riigikogu, calling for a significant increase in pensions. Finance Minister Siim Kallas has all but ruled out increasing the pension for the 2001 budget. To add injury to insult, the Riigikogu rammed amendments through to extend their own tax-exempt pensions.
The new 25-storey SAS Radisson, due to open in February 2001, has apparently received over 50,000 reservations already.
Privatisation of the TOP Olympic Yachting Centre failed, as no bids came in at the mandatory minimum EEK 250 million level. What's next for the yachting, entertainment, hotel and shopping complex that hosted the yachting events of the 1980 Moscow Olympics?
November inflation rose by an alarming 0.6 per cent, fuelling more concerns that high GDP growth is being coupled by increasingly high CPI rise.
The Estonian Journalists Association voted MP Ivar Tallo as most press-friendly, followed by Nelli Kalikova, head of the AIDS Prevention Centre. Transport Minister Toivo Jürgenson was voted least press-friendly.
The EU temporarily closed the negotiations chapter on the free movement of goods and confirmed the temporary closure of chapters on social/labour policy and cultural/audio-visual policies. Foreign Minister Toomas Hendrik Ilves praised the closures but criticised the EU for its sluggishness.
The Riigikogu passed a law allowing financially troubled public television ETV to borrow more than its original threshold of ten per cent of its annual budget, which could save it from going bust.
Italy's Saviola purchased a controlling stake in Estonia's Võru Juust (Võru Cheese). The Bozzolo-based cheese maker, founded in 1897, now controls 57.8 per cent of the large Estonian cheese maker.
The office of the United Nations Development Programme (UNDP) will close its doors on 1 January 2001, as it feels its mission is complete. The UNDP office noted that, over the eight years of operations, it saw Estonia turn from a recipient of foreign aid to a net donor.

Exchange Rates As of 7 December 2000
Currency	Estonian kroons (EEK)
1 US dollar	17.65
1 British pound	25.61
1 German mark	8
1 euro	15.65

[Up-to-date exchange rates]

Mel Huang, 7 December 2000

Moving on:

Sources:

Baltic News Service (BNS)
Eesti Päevaleht
ETA
Postimees
SL Õhtuleht