Officials from the three Baltic states' energy regulatory bodies signed a protocol on the common Baltic energy market in Vilnius, detailing an agreement reached in 1998 on energy cooperation. The protocol specifies the resolution signed by the prime ministers of Estonia, Latvia, and Lithuania on June 26, 2002, and stresses the importance of an open electric energy market for promoting competition and raising supply security.
The principles under the protocol provide for equal operations of transmission systems, the necessity to promote cross-border deals, pursuing non-discriminatory spread of costs between power producers and consumers, as well as promoting investment and avoiding trade barriers.
Setting up a common Baltic energy market will promote better integration of the Baltic states in the common EU energy market. (Baltic News Service)
EBRD eyes Lithuanian refinery
The European Bank for Reconstruction and Development plans to invest in the Lithuanian Mazeikiu Nafta oil complex, a senior EBRD official reported. "Interest was expressed, and we will be involved in this project," Salvatore Candido, EBRD director for the Baltic states, said after meeting with Lithuanian President Valdas Adamkus.
Candido refused to comment on how big a share in Mazeikiu Nafta the EBRD is planning to obtain. "This question is being considered," Candido said.
The Mazeikiu Nafta oil complex includes the Mazeikiu oil refinery, Butinge off-shore oil terminal and an oil pipeline. The second biggest Russian oil company Yukos owns 53.7 percent of shares in the complex, 40.66 percent are controlled by the Lithuanian government, and the rest are held by private investors. In the last two years, Mazeikiu Nafta has posted more than 100 million dollars (102 million euros) in losses because it could not obtain sufficient supplies of crude oil. (Agence France-Presse)
Airlines reach tentative agreement
Latvia's national airline AirBaltic has reached an agreement with Czech Airlines on the company's winter flight schedule between Riga and Prague, though it has yet to be approved by the two countries' respective transportation ministries. Both sides declined to provide details of the agreement, adding only that technical approval remains.
Though the winter flight schedule began on Oct. 27, both AirBaltic and Czech Airlines had been unable to draft a schedule that would suit both sides. In the interim it was agreed that Czech Airlines would continue its summer schedule - fly nine times per week - while AirBaltic was allowed to launch its three-flight-per-week schedule until Nov. 10. (The Baltic Times)
Hansapank recommends state bond sale
Erkki Raasuke, deputy board chairman of Hansapank, suggested the Estonian government should consider issuing kroon-denominated bonds as a means to cover the budget deficit that will result from pension reform. Raasuke told a press conference on Nov. 4 that Estonia, which has so far issued 100 million euros in bonds, should borrow more money on the domestic market to finance the deficit.
"If bonds were issued in kroons with a margin just above the Euribor, the issue would sell," said Raasuke. "The state could achieve if not a negative, then zero-level, real interest next year." The Estonian government made a 100 million euro issuance this summer, which ended up being 2.7 times oversubscribed.
According to Hansapank's calculations, the state's deficit will balloon to 650 million kroons as a result of mandatory pension insurance. Finance Minister Harri Ounapu said earlier that he would prefer either investment or a proportional cut in all ministries' budgets to cover the deficit. (BNS)
Adamkus visits Klaipeda port
President Valdas Adamkus toured the stevedoring companies Klasco, Bega, and Klaipedos Smelte and had a meeting with the port's authority. The Lithuanian president said he believes that further negotiations for stevedoring Russian freight at the ports of Klaipeda and Kaliningrad are highly needed. In addition, he said he backed the project of deepening the ports, saying it would be useful not only for Klaipeda, but also for the entire country. The port's increased berthing capability, said Adamkus, will pave the way for expanded trade and new markets in Europe. (Baltic Business News)
Blessing from Russian central bank
Russia's Central Bank canceled an order banning the acceptance of applications by Russian banks to open branches in Latvia and of applications by Latvian banks to open subsidiaries in Russia. The order, dating from May 29, 1998, also banned the acquisition of shares by Latvian residents in Russian financial institutions.
The bank's decision to cancel the old order lifts the last remaining restrictions for cooperation with Latvia's banks. Still, Russia has yet to remove Latvia from its list of off-shore zones, which is still the main hindrance for Latvia's banks that want to conduct operations in Russia.
According to a statement, the Russian Central Bank decided to lift restrictions for transactions with Latvia's residents in order "to further develop cooperation between Russia and Latvia in the sphere of finance and banking as well as considering constructive results of recent contacts with Latvia's politicians and political leaders." (BNS)