Eesti in brief - 2009-06-03

  • 2009-06-03
Estonia is in discussions on how to strengthen its military partnership with American forces in Afghanistan. Postimees reported chief of the General Staff of the Defense Forces, Colonel Neeme Vali, who is currently on a visit to the troubled region, recently met with deputy chief of ISAF, Lieutenant General James Dutton in Kabul, to discuss future plans of the NATO allies. Vali said Estonia has made a political decision to continue military co-operation with the American forces, which will see Estonia send an extra company to safeguard security during presidential elections in the Helmand province. Estonia is also considering its involvement in the formation of an OMLT (Operational Mentor and Liaison Team) 's a common training unit for the Afghanistan army.

Estonian businesses have spoken out against a planned hike in Value Added Tax (VAT), saying it doesn't bring more money to the budget and has negative impact on entrepreneurship, which is already suffering from the fall in demand. Enn Veskimagi, the head of Estonian Employers Confederation told Aripaev that he is against increasing VAT. "In the current situation of the crisis, increasing VAT doesn't bring more money to the state budget. From the examples of Latvia and Lithuania we may see that in this case tax collection is decreasing," Veskimagu said. The government is considering a plan to collect 800 million kroons (51.13 million euros) in extra revenues in 2009 by increasing the VAT rate from 18 percent to 20 percent.

Many Estonian companies that have operations in Latvia say it is the best time for expansion, said Aripaev. Although Latvia's economy is down 18 percent year on year and its retail sector is nose-diving, companies such as NS King, Euronics, Merks, E. Energy say there is still plenty of business available. CEO of Estonian footwear retailer NS King CEO Tiit Magi is satisfied the company is profitable. As part of a series of cost cutting measures, the company has closed two poorly performing stores and now plans to open three new ones. "We see an opportunity since some retailers are leaving shopping centers and we can snatch up good locations," said Magi. NS King currently has nine stores in Latvia.

Latvian airline airBaltic has announced plans to launch nonstop flights between Riga and Tartu, Estonia's second largest city from July 3. The airline will offer the flights four times a week 's on Mondays, Wednesdays, Fridays and Sundays. Flights will be offered on Fokker 50 aircraft and will last 50 minutes. One-way ticket prices start at 646 kroons (41 euros), including airport and transaction fees.