Weekly Newsletter – Swiss Baltic Net- Calendar week 14, ending 2 April 2017
Please find below the most recent week’s news about the Baltics. This newsletter has been compiled in cooperation with the Consulate General of Switzerland in Vilnius and the Swiss Chambers of Commerce in Lithuania and Latvia.
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Lithuania – Business and Economy
Lithuania Retail Sales Growth Eases in February
Western Union to shift part of jobs from Peterborough to Vilnius
Lithuania – Politics
Foreign Minister asks his German counterpart to hand 1918 independence act over to Lithuania
Lithuania – Other Topics
Consumer confidence indicator remained unchanged in Lithuania
Kaunas selected as European Capital of Culture 2022
Latvia – Business and Economy
Retail trade turnover in Latvia grew by 1.2 %
Development of monetary indicators stable in February
Latvia – Politics
Latvian MEP Kalniete calls on Latvia to work hard to get into core of EU
EU funds planning period 2007-2013 comes to a close in Latvia
Latvian ambassador to NATO: No reasons to doubt United States' commitment to NATO
Latvia – Other Topics
How Russian Propaganda Becomes Even Nastier in Baltic News
Number of foreigners working in Latvia grows steadily
Estonia – Business and Economy
Estonia Feb Industrial Production Growth Quickens
ABB's shared service center in Tallinn to hire 100 people this year
Switzerland’s Ringier Axel Springer Media buys Baltic recruitment portal CV Keskus
Estonian unit of ABB boosts FY sales 18 %
Starship Technologies launches pilot in collaboration with Domino's Pizza
Estonia – Politics
‘I’m not afraid’: The president of tiny Estonia gives a giant lesson in leadership
Estonian government okays time based road user tax for trucks
Estonia – Other Topics
Corporate and household deposits in Estonia up 10% year-on-year in February
State burdened by junk real estate
Baltics – Business and Economy
Revenue of Estonian logistics co Omniva grows 27 % in 2016
Baltics – Politics
Russia to Connect Belarus with the Sea and "Cut off" the Baltic States
THE BALTIC: GREY-ZONE THREATS ON NATO’S NORTHERN FLANK
Baltics – Other Topics
DEBUNKED: THE MYTH OF THE GOLDEN AGE OF THE BALTICS IN THE SOVIET UNION
28 Mar 2017 - Lithuania's retail sales eased in February after accelerating in the previous month, figures from the Department of Statistics showed Tuesday.
Retail sales, excluding VAT, climbed a working-day-adjusted 7.6 percent year-over-year in February, slower than January's 8.8 percent surge.
On an unadjusted basis, retail sales advanced 5.5 percent in February from a year ago.
Excluding automotive fuel, retail trade rose 5.0 percent. Sales of food, alcoholic drinks and tobacco went up 3.5 percent and those of textiles, clothing and footwear grew by 7.3 percent.
Month-on-month, retail sales dropped a seasonally and working-day-adjusted 0.4 percent in February.
1.04.2017 - Western Union, a global leader in money transfer services, intends to move part of the jobs to Vilnius from Peterborough, a city in the United Kingdom with a large population of Lithuanian emigrants, informs LETA/BNS.
"This is true, this is part of the unit's expansion in Lithuania," Ilona Zibikiene, spokeswoman for Western Union Processing Lithuania, confirmed.
The plan is to shift up to 50 jobs from England, and they will be first of all offered to the people currently working in the Peterborough bureau.
Peterborough media has reported that Western Union, one of the biggest employer in the city, announced its decision of moving the jobs after UK Prime Minister Theresa May launched Brexit procedures.
The Western Union bureau in Peterborough has staff of about 270 people, while the payroll of the Vilnius bureau is about 1,700.
31 Mar 2017 - Germany's Foreign Ministry on Thursday confirmed discovery of the Feb. 16 1918 resolution of the Council of Lithuania on reestablishment of statehood, congratulating Lithuanians on the find.
"What a wonderful discovery! It is great news to our friends in Lithuania. We are happy together with them," the German Foreign Ministry said in a comment forwarded to BNS by officials of the ministry and the German Embassy in Vilnius. Lithuanian Foreign Minister Linas Linkevicius on Thursday asked his German counterpart, Sigmar Gabriel, to hand an original copy of Lithuania's Act of Independence of Feb. 16, 1918 that has been found in Berlin's diplomatic archives over to Vilnius.
"I told him that it is one of the most important historical documents for us and that we would like it to have it in Lithuania," Linkevicius told BNS on Thursday evening.
The Lithuanian minister said that he had had a telephone conversation with Gabriel, adding that the two ministers planned to continue their discussion on this issue on the sidelines of a NATO meeting in Brussels on Friday
Linkevicius said that the German minister had promised to bring a facsimile of the document to Brussels and to provide more information about the legal situation.
He said that Gabriel had also promised to help Lithuanian researchers to get access to documents related to the restoration of independence.
Liudas Mazylis, a political science professor at Vytautas Magnus University, found the copy of the Council of Lithuania's resolution on the restoration of an independent state of Lithuania in the German Foreign Ministry's archives on Wednesday.
Historians believe that Jurgis Saulys, one of the 20 signatories, handed the copy to German diplomats 99 years ago. It is thought that several original copies of the resolution were signed, but the whereabouts of the others are unknown.
President Dalia Grybauskaite said earlier on Thursday that her team had contacted German Chancellor Angela Merkel's office and were looking at how and when the document could be returned to Lithuania.
Source: The Baltic Times
31.03.2017 - Statistics Lithuania informs that in March 2017 the consumer confidence indicator stood at minus 10; against February, it remained unchanged. More pessimistic expectations for the changes in unemployment figures in the coming 12 months were counterbalanced by more optimistic expectations for making at least some savings.
Changes in the consumer confidence indicator and its components
|March 2017||February 2017||March 2016||May 2001–March 2017 average||Largest since May 2001||Smallest since May 2001|
|Consumer confidence indicator||–10||−10||–7||−15,1||9 (2007-03)||−56 (2009-01)|
|Changes in the household's financial situation in the coming 12 months||0||0||0||−4,3||13 (2007-03)||−38 (2009-01)|
|Changes in the country's economic situation in the coming 12 months||–5||–5||1||−5,7||19 (2007-06)||−57 (2008-12)|
|Changes in the number of the unemployed in the coming 12 months||10||7||4||11,7||82 (2009-02)||−33 (2007-06)|
|Probability of making savings in the coming 12 months||−26||–28||–24||−38,7||−16 (2015-03)||−54 (2001-05)|
In March, against February, the percentage of residents expecting improvement in financial situation in the coming 12 months increased from 19 to 21%. 18% of residents expected the situation to deteriorate (in February, 19%).
As in the previous month, 29% of residents expected the country's economic situation to deteriorate in the coming 12 months, 24% – to improve (in February, 23%).
In March, against February, the percentage of residents expecting the number of the unemployed to increase in the coming 12 months grew from 34 to 38%. 21% of residents expected the number of the unemployed to decrease.
34% of residents expected to make at least some savings in the coming 12 months, while 27% of residents stated that they did not expect to make at least some savings at all (in February, 33 and 26% respectively).
Consumer confidence indicator in urban rural areas
Consumer confidence indicators in urban and rural areas differed by 3 percentage points (ppt): in urban areas, it stood at minus 9, in rural areas – at minus 12. Against the previous month, the consumer confidence indicator in urban areas increased by 1 ppt in rural areas – decreased by 1ppt.
Expectations of urban population for household financial situation were more optimistic than a month ago: the percentage of those expecting an improvement in household financial situation in the coming 12 months increased from 19 to 23 %, the percentage of those expecting to make at least some savings – from 34 to 36%. Against February, the percentage of those expecting an improvement in the country's economic situation decreased from 24 to 22%.
Expectations of rural population for changes in unemployment figures and household's financial situation were a bit more pessimistic. Against February, percentage of rural population expecting an increase in the number of the unemployed in the coming 12 months increased from 35 to 45%, an improvement in household's financial situation – decreased from 20 to 17%.
The percentage of rural population expecting an improvement in the country's economic situation in the coming 12 months grew from 21 to 27%.
Consumer confidence indicator, against the same period of the previous year
Over the year (March 2017, against March 2016), the consumer confidence indicator decreased by 3 ppt . Opinion of residents about the expected changes in the country's economic situation considerably changed. The percentage of population expecting the country's economic situation to deteriorate in the coming 12 months increased from 23 to 29%, the number of the unemployed to increase – from 30 to 38%. The resident's expectations in terms of making at least some savings slightly deteriorated: the percentage of those expecting to make at least some savings in the coming 12 months decreased from 36 to 34%.
Assessment of changes in the last 12 months and the current situation
In March, as in February, 12% of the population stated that their household's financial situation in the last 12 months improved. The percentage of those stating that their household's financial situation deteriorated increased by 3 ppt (from 38 to 41%).
Assessment of changes in the country's economic situation in the last 12 months given by the residents was slightly worse than in February: 15% of the population stated that in the last 12 months the situation improved, 48% – that it deteriorated (in February, 4 %).
As regards the current financial situation of their family, each third resident (33%) indicated that made some savings (in February, 34%), 13% – indicated living on savings or borrowings (in February, 10%).
In March, 27% of the population planned in the coming 12 months to increase their expenditure on such purchases as furniture or household appliances, while each fifth resident expected to spend less than in the last 12 months (in February, 25 and 23% respectively).
The annex to the news release contains information on changes in the consumer confidence indicator and its components (answers to questions used to compile the indicator). Respective information on other EU countries is available on the European Commission's website .
The consumer opinion survey is conducted on the 1 st –15 th days of each month by interviewing 1 200 individuals randomly sampled from the Residents' Register of the Republic of Lithuania. The consumer confidence indicator refers to the simple arithmetic mean of the balances of positive and negative answers to four questions (about changes in the financial situation of the household, the economic situation in the country, the number of the unemployed (with an opposite sign), and the probability of making savings in the coming 12 months).
The survey is partially funded by the EU.
Consumer confidence indicator, 2009–2017
Table 1. Consumer confidence indicator %
Table 2. Opinion of the population about changes in the household's financial situation in the coming 12 months %
|Household's financial situation in the coming 12 months will:|
Table 3. Opinion of the population about changes in the country's economic situation in the coming 12 months %
|Country's economic situation in the coming 12 months will:|
Table 4. Opinion of the population about changes in the number of the unemployed in the coming 12 months %
|Number of the unemployed in the coming 12 months will:|
Table 5. Opinion of the population about the probability of making savings in the coming 12 months %
|Probability of making savings in the coming 12 months:|
Source: Statistics Lithuania
29.03.2017 - Lithuania's second-biggest city of Kaunas was named the winner of the contest for the European Capital of Culture 2022 title during a ceremony at the Ministry of Culture on Wednesday.
Kaunas bid under the slogan "ConTEMPOrary Capital", an allusion to the city's identity as Lithuania's temporary capital during the interwar period.
Its main competitor, the port city of Klaipeda, which teamed up with the resorts of Neringa and Palanga for the project, presented itself as a meeting place and a changing and vibrant city.
Kaunas and Klaipeda were short-listed from among six Lithuanian cities and towns that had submitted their bids.
One city in two EU countries each are designated as the European Capital of Culture every year. Lithuania and Luxembourg will be the host countries in 2022.
30.03.2017 - Calendar adjusted data (at constant prices) compiled by the Central Statistical Bureau (CSB) show that, compared to February 2016, in February 2017 the total retail trade turnover rose by 1.2%. Turnover of retail trade in food products declined by 1.3%, whereas turnover of retail trade in non-food products grew by 4.4%.
The most significant turnover growth in the non-food product group was recorded in retail sale via mail order houses or via Internet (of 29.8%), retail sale of automotive fuel (of 13.0%), retail sale in non-specialised stores with non-food products predominating (of 7.2%), retail sale of hardware, paints and glass (of 6.7%) and retail sale of clothing and footwear (of 5.4%). The largest turnover drop, in turn, was observed in retail sale via stalls and markets (of 14.0%), retail sale of medical and orthopaedic goods (of 4.0%) and retail sale of information and communication equipment (of 2.5%).
The total retail trade turnover at current prices increased by 5.5% (not taking into account the calendar influence).
Retail trade turnover indices (as % compared to the average monthly turnover of 2010, at constant prices)
Compared to January, in February 2017 retail trade turnover declined by 0.7% (according to seasonally adjusted data at constant prices). The turnover of retail trade in food products grew by 0.2%, while turnover of retail trade in non-food products fell by 0.7%.
Turnover decline was recorded in retail sale of information and communication equipment (of 7.9%), retail sale of clothing, footwear and leather goods (of 3.4%), retail sale of medical and orthopaedic goods (of 2.1 %), as well as retail sale of automotive fuel (of 0.4%).
Turnover growth, in turn, was registered in retail sale via mail order houses or via Internet (of 6.2%), retail sale in non-specialised stores with non-food products predominating (of 3.3%), retail sale via stalls and markets (of 2.2%), and retail sale of hardware, paints and glass (of 1.4%).
Compared to January, in February 2017 the total retail trade turnover at current prices (not taking into account seasonality) decreased by 5.9%. A year before – in February 2016, compared to January 2016 – the turnover reduced by 3.3%.
Turnover indices of retail trade enterprises by main kind of economic activity (at constant prices)
|January–February 2017 as %, compared to January–February 2016 (calendar adjusted)||February 2017 (%) compared to|
|January 2017 (seasonally adjusted)||February 2016 (calendar adjusted)|
|Retail trade – total||102.5||99.3||101.2|
|retail sale of food products, total||99.3||100.2||98.7|
|retail sale of non-food products, total||105.2||99.3||104.4|
|retail sale in non-specialised stores with non-food products predominating||101.9||103.3||107.2|
|retail sale of information and communication equipment in specialised stores||104.0||92.1||97.5|
|retail sale of hardware, paints and glass||107.3||101.4||106.7|
|retail sale of cultural and recreation goods||100.8||99.9||97.0|
|retail sale of clothing, footwear and leather goods||107.9||96.6||105.4|
|retail sale of medical and orthopaedic goods||97.1||97.9||96.0|
|retail sale of automotive fuel||110.7||99.6||113.0|
Source: Statistics Latvia
29.03.2017 - The dynamic of monetary indicators did not change in February. The amount of deposits attracted by banks and the balance of loans granted to enterprises underwent respectively moderate and slight growth. As a result, the indicators of the year-on-year rate of change for the main monetary indicators still remain in the positive sector.
The balance of loans granted to domestic nonfinancial enterprises increased by 0.1% in February and the balance of those granted to households dropped by 0.2%, whereas the total amount of domestic loans remained practically unchanged. The year-on-year rate of growth of domestic loans also remained unchanged (3.8%), although it improved both for loans granted to nonfinancial enterprises (to 2.8%) and for loans granted to households (to –1.3%). The amount of newly granted loans (with the exception of reviewed ones) grew by 14.6% year-on-year in February (incl. loans granted to households by 10.3%).
The domestic deposits attracted by banks increased by 1.5% in February, but the rate of their year-on-year growth was at 4.7%. The deposits by nonfinancial enterprises grew by 1.9% (y-y growth rate at 7.5%) and household deposits by 0.6% (y-y growth rate at 8.5%). After decreasing for several months, the deposits of nonbank financial institutions were on the rise again.
As deposits rose in February, so did Latvia's contribution to the euro area money supply indicator M3 (by 1.4%; y-y growth rate at 4.9%). The overnight deposits by euro area residents with Latvian credit institutions increased by 2.8% and deposits redeemable at notice by 0.9%, whereas deposits with a set maturity of up to two years dropped by 5.9%.
The year-on-year changes of some money indicators (%)
Source: Latvijas Banka
The positive trends in the global economy are continuing and both the private and public consumption foster the consolidation of growth of the Latvian economy, therefore a moderate increase in deposits is likely to continue. This year once again, the economy will be supported by lending growth. The readiness of banks to lend is combined with the positive future expectations of entrepreneurs and households alike and the desire and need to borrow based on the necessity of investments.
Source: Latvijas banka
27 Mar 2017 - In the coming years new European architecture will be developed and Latvia will have to work hard to get into the core of the EU during this process, said Latvian MEP Sandra Kalniete (Unity) in an interview with the Latvian public television on Monday.
Another Latvian MEP Roberts Zile (National Alliance), meanwhile, said in an interview with commercial LNT television that Latvia’s chances to get into the core of the EU are unlikely as our country just cannot afford to pay for it.
Kalniete is sure that a multi-speed Europe is inevitable, and there will be a tough fight for getting into its core. Latvian politicians should be aware that the coming years are as important as those years before Latvia joined the EU.
"We must be in the core," said Kalniete, adding that the core will form around several "poles", one of them is the euro, while others might be cooperation in security and defense.
According to Kalniete, changes in Europe will bring along several unpleasant decisions, but Latvia will have to cope with them. For example, there are signs showing that money from the EU funds will decrease. Decisions can be expected on harmonization of taxes, social policies. Kalniete underscored that these will be complicated processes and tough negotiations, and decisions will come slowly.
She said that Latvia during these processes will have a little say in decisions will be made by the countries who pay the bulk into the EU budget. Still, the geopolitical processes in the world suggest that Latvia should not stay aside and alone.
MEP Zile underscored that Latvia would not favor from multi-speed Europe, therefore he hopes that the Latvian prime minister and foreign minister will find allies in order to stop these processes.
Speaking about eurozone as one of the "poles" of the future core of the EU, Zile explained that there is a problem that Latvia’s neighbors in the Baltic Sea region – Denmark, Sweden, Poland – are not and will not join the eurozone, therefore there will be no cooperation in this sense.
Speaking about EU funds, Zile said that Latvia should not put up with possible reductions because Latvia’s GDP level is way behind the rest of Europe, therefore Latvia should insist on what has been written in the agreements, meaning that the funds have been meant for balancing the development level. Giving in would be an incorrect and dangerous policy, said Zile.
In his words, European Commission President Jean-Claude Junker sees just the six foundation countries as the EU core, and Latvia will not be able to join it "because we are just not able to pay for that". Zile also said that the earlier experience demonstrates that multi-speed Europe is just not functioning because decisions made in a narrow range of countries cannot be put into life.
Source: The Baltic Times
1.04.2017 - The 2007-2013 planning period for European Union funds has officially closed in Latvia, as the Finance Ministry informed LETA.
In total, EUR 4.5 billion from the European Social Fund, European Regional Development Fund and Cohesion Fund were invested in the national economy of Latvia. Investments from the European Agricultural Guarantee Fund, European Agricultural Fund for Rural Development and European Fisheries Fund amounted to EUR 2.9 billion.
With the help of the EU funds, 991 kilometers of roads and highways were built or reconstructed in Latvia, as well as 52 kilometers of railroads. 382,848 residents were hooked up to water supply lines, 1,291 companies received support at business incubators, 72,876 young people were paid scholarships, and over 0.5 million residents received support to find new jobs.
The number of active entrepreneurs in 2006-2015 increased from 22 to 48 per 1,000 residents. The EU funds were also used to improve energy efficiency of 741 apartment buildings, development of multifunctional centers in Liepaja, Cesis and Rezekne, and development of general practices.
The Finance Ministry points out that EU funds have been one of the key sources of investment in the national economy to mitigate economic downturn during the crisis and stimulate employment and financial activity in the post-crisis period.
The Finance Ministry will continue to supervise projects that received EU funding in 2007-2013 and are to be completed by March 31, 2019. Some of these projects are the second round of construction of Pauls Stradins Hospital's A wing, moving Riga Port operations to Krievu Island, and liquidation of acid waste ponds at Incukalns also has to be completed during the 2014-2020 planning period.
31 Mar 2017 - Although after Donald Trump’s election as U.S. President concerns were raised about the United States’ possible defense policy change, there are no longer reasons to worry that the U.S. might refuse its assistance within NATO, Latvian Ambassador to NATO Indulis Berzins said on Latvian Radio this morning.
The ambassador noted that the U.S. defense secretary and vice-president have both reaffirmed commitment to NATO and that President Trump’s statements on that matter have also been very responsible.
Notwithstanding these reassuring messages, Ambassador Berzins said he would still like to hear at the upcoming NATO summit in May statements about continued support to boosting the Baltic region’s security, especially from the U.S. president.
Berzins said he had no doubts at all about Latvia’s commitment to raising its defense budget to 2 percent of GDP next year and that the money will not be wasted but will be spent in a meaningful way.
NATO and Russia are maintaining dialogue because “talking increases our security”, Berzins said. “Bad talks are better than the best war,” the diplomat said.
The Latvian ambassador to NATO also believes that Latvia cannot achieve anything more in bilateral negotiations with Russia.
Source: The Baltic Times
29 Mar 2017 - Fake names and miserable wages: what it’s like to work in the Kremlin-friendly local Russian language newspaper.
Published in Latvia, Segodnya newspaper claims to be the only Russian-language daily in the European Union. I met one of the newspaper’s journalists Yelena Slyusareva three years ago on a trip to Sweden, sponsored by the Swedish embassy. As part of the trip the group of journalists went to interview the Swedish royal couple. Yelena’s English was poor, so interpreted for her from English to Russian. We got on alright.
While we were in Sweden, a controversial referendum on joining Russia was held in Crimea. Much like many issues involving Russia and Russians in the Baltic state of Latvia, the news coverage of this event in the Latvian-language press was vastly different from their local Russian-language counterparts. Latvians worried about the Russian aggression and did not hide their concerns that the Baltics may be the next in line Putin’s Russia may wish to “liberate”. For Segodnya, the annexation of Crimea was a happy reunification.
Yelena defended her newspaper: her colleagues really believed in what they wrote, she’d say. There was a plurality of opinions because her boss allowed her to pen an op-ed condemning Russia’s aggression in Ukraine. Yelena also criticized Latvia’s Russian population, who refused thinking with “their own heads,” surrendered “their power to the Russian television” and “closed their eyes as though they didn’t understand what was happening.”
Her op-ed was published, but half year later, in October 2014. Yelena says the article caused an uproar among her colleagues and readers: “Why did you have to offer your opinion when no one asked for it?”
About the same time as the article went to press, Yelena was on a Russian embassy sponsored trip to Crimea. She insists the embassy did not issue any guidelines on the coverage.
From Crimea, Yelena brought back a series of articles. The first article stated that the trip had been paid for by the Russian embassy. The following articles didn’t.
Yelena said that the articles were not censored and she tried to show all sides of the complex story. One of them featured an interview with the editor of a newspaper in Yalta, who thanked Putin for the support. Another focused on the Crimean Tatars, who demanded the return of their homeland. However, she didn’t say anything when next to the article about the Tatars, an editor published an op-ed piece mocking their desire to become part of Europe, inviting them to visit Latvia to see how bad Europe really was.
A few months later, Yelena was laid off. The official reason was the staff downsizing, but “unofficially I have already been told: you need to understand that you cannot work in the Russian press with your viewpoints,” Yelena said. She asked to work at the newspaper for another month because she was preparing a residency permit for her mother and brother, who were fleeing to Riga from the war-torn eastern Ukraine.
“I was the only bread winner,” she says. She tried to argue with her editor, saying that the newspaper has been defending the residents of the eastern Ukraine, which was why it needed to help her, too. The editor responded, “It’s only business.” He allowed her to work until the end of the month.
Sergey Storchevoy, who worked as a publishing company manager at that time, questioned her side of the story to Re:Baltica. He said Yelena’s dismissal had nothing to do with her political views, but with the staff cuts and an opportunity to hire better journalists to replace her.
I contacted Yelena again as part of the investigation into owners of internet sites that cover events in the Baltics in a same vein as the Kremlin-controlled news media.
Journalists run to Moscow
“Putin’s women will break noses of the NATO soldiers ,” screamed a headline on website vesti.lv, sister-publication to the newspaper Segondya, on Feb 21, 2017.
Under the click-bait headline was a recycled article by the Russian state-run news agency RIA Novosti , which quoted The Times (UK) report on possible use of local women to stage provocations against the NATO soldiers. The original headline of article in RIA Novosti is softer: “People in Estonia fear that Moscow will provoke NATO troops for a brawl.” The article was also reprinted by the Sputnik web site, which together with RIA Novosti makes up part of the state-run media conglomerate Rossiya Segondya.
It is a standard practice for vesti.lv to republish articles produced in Russia, slapping on more provocative headlines.
In another example rubaltic.ru, a Kaliningrad-based news site, writes that The Baltic States will close the door to guest workers . Vesti.lv re-publishes the same text under the headline Latvia is dying out . There’s no one left to work.
The article about Putin’s women was signed by Anatoly Tarasov. It was a busy day for him. It started at 6:50 a.m. with the news item about the EU preparing “a new russophobic plan”, moving on to story about a new music video by an American singer Lana del Rey. Then he filed a piece informing the audience how Latvia’s non-citizens — mostly Russian-speakers — can obtain citizenship of a Moscow-backed, internationally unrecognized Donetsk People’s Republic in eastern Ukraine. It was followed by an article about refugees fleeing Lithuania. The day concluded with a review of a Hollywood movie at 4:29 p.m. On that day, Tarasov wrote more than 20 articles.
You won’t find this prolific journalist on social networks or in local journalist organizations. Anatoly is a work of fiction. Journalists at vesti.lv can select one of several aliases, so to create an illusion of a team work, even though it is only one person who copies and pastes news articles from various news sources on the internet, according to several former vesti.lv journalists who requested anonymity to Re:Baltica.
Andrey Shvedov, the newspaper’s editor-in-chief, couldn’t find the time to give us an interview. That’s why I started talking to his journalists.
At least two of them have moved permanently to Russia.
One is Vladimir Veretennikov, who often writes for the Russian news site lenta.ru.
Lenta.ru used to be a very popular and influential Russian news website. After the editor-in-chief was fired over the coverage of the conflict in Ukraine back in 2014, part of their old team quit in protest and moved from Moscow to Riga to build up their new news project called meduza.io.
Attempts to contact Veretennikov were unsuccessful. However, a contact with another recent Moscow transplant of Segodnya, Dmitry Mart, turned into a lengthy email exchange. He said he was tired of “reading every day about the integration and the state language inspection. When the fascist Germany existed, many moved away to live somewhere else. In Moscow, I live in harmony and free.” The salary of the Russian-language journalist in Latvia, which is almost never publicly discussed in Latvia, is smaller than the salaries of their Latvian-speaking colleagues. The journalists interviewed by Re:Baltica say they would get between 300 to 500 euros a month after taxes. Mart says life in Moscow doesn’t have to be that expensive. An apartment and potatoes are even cheaper than in Riga, he wrote.
Another Segodnya journalist, Andrey Tatarchuk, agreed to meet in person. The vigorous, smiling man of about 50 years old, Tatarchuk said that Segodnya publishes negative articles about Latvia because its audience demands it. A similar argument was put forward by other former journalists, however none of them was able to say who its target audience was. The common line was that it’s pensioners or disillusioned men of the pre-pension age, whose media diet includes Russia’s TV channels which have been available through cable TV providers in Baltics.
“At some point, the local Russian-language media got this impression that the Russian readers have this point of view,” said Slyusareva. “Readers, whenever I meet them, no longer necessary hold to these views. Yet the newspaper continues to peddle them and, as a result, continues to lose readership.”
Segodnya newspaper is not profitable. According to the Latvia’s business registry, the official ownership of the newspaper has changed three times since 2012. What is suspicious is that while the company names have changed, the people who owned those companies remained the same. It likely is done to avoid paying back taxes, which as of February 2017, were more than 300,000 euros.
The last ownership swap took place in the summer 2016 when a 23-year-old graduate of the Ukraine State Aviation University, Ivan Khreskin, became the new owner. He got not only the newspaper, but more than 200,000 euros debt in unpaid taxes. When Re:Baltica’s colleagues tracked him down in Ukraine, Khreskin admitted that he knew that he was the owner of some media outlet in Latvia, but that was all.
It’s much harder to collect tax debt from foreigners. It’s probably why one of the previous owners of the publishers was a Belarusian citizen who ended up with a bill of 100 000 EUR.
As of right now, the newspaper Segodnya is published by Media Nams Vesti, on paper owned by a 46-year-old Ludmila Kalashnik. It’s an open secret among the Russian-language journalists in Latvia that a true owner is her partner, former member of the Russian Duma and a millionaire Eduard Yanakov.
It was first reported in 2012, when two local Russian-language newspapers, Chas and Vesti Segodnya, merged. Later, the more liberal-leaning daily newspaper Telegraf was added to them. The owners hid behind offshores, however, the media mentioned the names of the Russian billionaire Andrey Molchanov, Yanakov and Latvian businessman Artur Yeresko.
A newspaper, a business, a football club
Eduard Yanakov, former member of the Russian parliament, integrated in Latvia. Art by Mārtiņš Upītis.
Yanakov in Latvia has an oligarch’s mini-set: a business, a newspaper and until recently a football club.
To obtain the “golden visa” or EU residency permit issued by Latvia, he purchased a 400-square-meter flat in a prestigious art nouveau district in Riga for almost 1.5 million euros. His partner Kalashnik bought a house for almost 1.5 million euros in a prestigious area in the nearby seaside resource Jurmala, popular among the wealthy in the former Soviet Union.
People who worked in management positions at the time of the newspaper mergers say that Yanakov considered the newspapers as a business. With time, he became the sole owner and attempted to pour some life into his failing media empire, but failed. Some workers were not paid on time. Others have been laid off. It turned out running a newspaper was not the same as mining coal.
Wearing a T-shirt, Yanakov regularly showed up in his office, located near the newsroom. He didn’t get involved with the newspaper’s content, but it was not necessary. “Segodnya totally reflected the official position of the Russian embassy here — intentionally or not, but that’s a fact,” says Slyusareva.
For example, shortly before the European parliament elections in May 2014 the newspaper suddenly started to publish a lengthy op-eds by one of the candidates, openly pro-Kremlin MEP Tatjana Zdanoka, in which she criticised the Latvian government and EU policies.
A representative of the Member of the European Parliament from Latvia Tatjana Zdanoka says that they did not pay to publish long op-ed pieces by Zdanoka ahead of the elections to the European parliament. The press releases were so interesting that Segodnya decided to publish them for free.
None of the articles mentioned that it was paid content. Zdanoka denies it. In her words, the newspaper republished her press releases as they were seen important. Tatarchuk, when asked about whether the timing of these articles with the upcoming elections was a coincidence, heartily laughed. “Perhaps,” he said.
Conversation with Yanakov himself was short. “I don’t speak with the media. Ask the newspaper management,” he said.
Nowadays Yanakov is rarely seen in newspaper offices. The last time was at a New Year’s party. He brought the red caviar.
But there is someone who sees him almost every two weeks: Alexander Pronin, manager of the Riga Football Club. In February, I met with him in a stadium cafeteria as the club is in training. The team had just returned from the boot-camp in Dubai, paid for by Yanakov and other sponsors. Pronin is a man of the athletic build, taciturn. He wants to know the goal of the article.
Pronin says that he and Yanakov founded the football club two years ago because they wanted to raise the prestige of the sport. They have also been looking for a place in Riga to build a stadium.
According to Pronin, the club’s last year budget was around 550,000 euros, largely coming from Yanakov. Smaller donors will be seen at the annual report at the end of the year. The long-term goal is to make money by competing in the UEFA championships.
There was no indication that few weeks later Yanakov will disappear from the list of club’s owners, as the listings from Latvian business register show.
A new package, an old product
Meanwhile, Slyusareva now writes for a Russian-language news site press.lv. Among the Russian-speakers, the site previously used to be known as ves.lv: web outlet for Vesti Segodnya newspaper. The domain press.lv has been registered by the son of a Riga city council member Andrey Kozlov from the Harmony party (a political force in Latvia often accused of sympathising with the Kremlin), also named Andrey Kozlov. Harmony party draws its support mostly from the Russian speakers. Kozlov is also one of the original owners of the newspaper Segodnya, but he left that business.
Slyusareva says that the news site is producing real journalism. As an example, she mentions an article uncovering a piece of fake news published by her former employer as though the Latvian state will start confiscating illegal satellite dishes to prevent people from watching Russian TV. The article’s author is a former member of Latvian parliament Nikolai Kabanov.
If it hadn’t been for press.lv, Slyusareva would have left journalism. “There are too few Russian publications. Those that exist are small and similar to one another. It’s hard to uphold your principles because you cannot make enough money for yourself,” she says. She manages to earn about 400 euros a month and says it’s no wonder that Russians who grew up in independent Latvia do not absorb the local Russian press or want to work there. Instead, the Russian-speakers would rather switch on the bling on Russian TV.
Source: Re Baltica
30 Mar 2017 - In the last few years the number of work permits issued to foreign workers has been growing steadily, according to data by the Citizenship and Migration Affairs Office (PMLP). Despite unemployment at close to 10%, more and more businesses attract guest workers, mostly from neighboring countries. The majority of guest workers come from Ukraine, Lithuania, Russia, Bulgaria and Belarus.
Number of guest workers in Latvia by country, 01/01/2017 Create your own infographics
However, PMLP data say people from more exotic countries such as India, the Philippines and China have also received work permits.
By 2014 a total 5,502 work permits had been issued to foreign nationals. The figure grew to 6,165 in 2015 and 7,590 in 2016. By January 1, 2017 a total 8,625 permits were active with 3,875 issued to non-EU nationals.
The number of issued work permits has grown by 56% within four years.
However only 15% of foreigners working in Latvia are doing highly-skilled work. Most guest workers are employed in railway, transit, construction and other industries.
According to a survey by the Latvian Employers Confederation conducted last fall, 70% of employers have significant trouble finding employees. Often or somewhat often they specifically lack highly-skilled employees.
Meanwhile 85% have trouble finding 'good' employees.
Latvia only allows hiring guest workers after the job has been offered to Latvian residents for at least a month.
Some entrepreneurs want the government to loosen requirements for hiring guest workers due to industry-specific labor shortages, however their proposals have been halted by the National Alliance party .
Currently, if a company hires a foreigner they have to pay them least the average monthly wage, which was €916 before taxes late last year in the private sector.
31 Mar 2017 - Estonia's industrial production growth accelerated in February after easing in the previous month, figures from Statistics Estonia showed Friday.
Industrial production expanded a working-day-adjusted 9.0 percent year-over-year in February, faster than the 6.9 percent spike in January. The measure has been rising since July 2016.
Among main sectors, mining production surged the most by 34.6 percent annually in February, followed by energy output with 23.4 percent growth. Manufacturing production registered a moderate increase of 5.8 percent.
On a monthly basis, industrial production rose 2.3 percent from February, when it increased by 0.5 percent.
In a separate report, the statistical office revealed that retail sales growth eased to 1.0 percent in February from 2.0 percent in the prior month. Sales have been rising since July 2013.
Month-on-month, retail sales fell 9.0 percent in February, following a 18.0 percent plunge in the prior month. According to the seasonally and working-day adjusted data, turnover stayed at the same level compared to the previous month.
31.03.2017 - The regional shared service center the global industrial group ABB opened in Tallinn's tech hub Ulemiste City last October will take on up to 100 new staff in 2017, reports LETA/BNS.
"We'll hire approximately 100 people for the service center this year. The final number will depend on other countries' plans for the relocation of their financial, supply chain and personnel operations to Estonia," told ABB Estonia's communications specialist Sven Sommer.
Finding staff for the service center was not very difficult and there were enough candidates, head of ABB Baltics Bo Henriksson told in January.
The center currently employs around 200 people.
ABB announced in October 2016 the Tallinn center would give work to more than 400 people within two years.
The Tallinn regional shared service center is one of six such centers that ABB has established or is in the process of establishing globally to bring together and streamline support services that previously were provided separately in 68 countries. The center provides support to the financial, personnel and supply chain operations of the group.
29.03.2017 - Switzerland’s Ringier Axel Springer Media AG on Wednesday acquired 100 percent of the shares in CV Keskus OU, operator of the job classifieds sites cvkeskus.ee in Estonia, cvmarket.lv in Latvia and cvmarket.lt in Lithuania, reports LETA/BNS.
Established in Estonia in 2000, CV Keskus OU expanded to Latvia and Lithuania in 2004. CV Keskus OU has been owned by HeadHunter Group since 2007, Ringier Axel Springer said in a press release.
Povilas Kytra, who works for the group for the past ten years, will remain CEO.
According to Google Analytics data for February 2017, the job classifieds group reaches a total of over 1.8 million monthly visitors. It publishes over 6,000 job ads monthly and currently provides access to a live database of close to a million active CVs, figures provided by CV Keskus show.
The company made a profit of 249,000 euros on sales of 2.5 million euros in 2015.
"With the expansion of our job classifieds business into the Baltics, we are strategically entering this high growth region. The Baltic countries are among the most digitized economies in the EU. Strong GDP growth will also drive the growth of the HR services industry. This will increase the demand for recruitment services and have a positive effect on the job classifieds segment. We will build on the strong expertise in classifieds that lies in our Group and with our shareholders," Mark Dekan, CEO of Ringier Axel Springer Media AG, said.
"I am very much looking forward to combining the strength of our group with the experience and know-how of Ringier Axel Springer and to further developing our offer in the Baltic region," Povilas Kytra, CEO of CV Keskus OU, said.
Ringier Axel Springer Media AG was established on July 1, 2010 as a joint venture between Swiss Ringier AG and German Axel Springer SE in order to combine their international operations in Central and Eastern Europe. Today, Ringier Axel Springer Media AG manages a portfolio of more than 160 digital and print products in the markets of Poland, Hungary, Slovakia and Serbia.
The company is based in Zurich and has approximately 3,000 employees.
28.03.2017 - Sales revenue of the power management and automated systems manufacturer ABB AS, Estonian unit of the international ABB group, increased 18 % last year to 183 million euros, LETA/BNS informed.
Total orders surged 21% to 180 million euros and operating profit amounted to approximately 14 million euros, ABBannounced on Tuesday.
ABB AS boosted export by 27% year-on-year. The share of export in sales revenue increased by 8%, to 89% of the total.
"Growth last year was driven mainly by exports. It was a good year for the motor and power generator plant, where we received large orders mainly in the wind generator segment. It was also a successful year for the compact secondary substations plant, mainly thanks to exports to Finland," head of ABB Baltics Bo Henriksson said.
He said sales in Estonia produced a modest result.
Investments by ABB AS grew 53% year over year to 7.5 million euros and the number of employees in Estonia increased 19% to 1,362.
ABB AS posted sales of 155 million euros for 2015, 149.6 million euros for 2014 and 187 million euros for 2013.
ABB Group operates in more than a hundred countries globally, employing a workforce of approximately 132,000. ABB has been active in Estonia since 1992.
29.03.2017 - The Estonia-based developer of delivery robots Starship Technologies and the global pizza chain Domino's announced on Wednesday their partnership to begin delivering pizza in selected cities in Germany and the Netherlands this year, informed LETA/BNS.
Domino's is running the project under the framework of DRU (Domino's Robotic Unit), an initiative using robot and drone technologies for delivery. Starship robots will start delivering pizzas within a one mile radius around Domino's stores in selected German and Dutch cities, Starship Technologies said in a press release.
The companies expect robot deliveries to start in the next two months.
"We're shared in our vision with Domino's to constantly improve convenience for the customer," said Ahti Heinla, CEO of Starship Technologies. "Not only is Domino's pizza delicious, but the perfect topping is giving back the luxury of time and control to the customer, and our robots are best placed to offer this."
Don Meij, Domino's Group CEO and managing director, said the partnership between the company and Starship Technologies was an important next step in bringing robot pizza deliveries to reality.
"We are a global company and we are eager to progress innovative technology in all of the countries in which we operate – we are very excited to be partnering with Starship as it brings regular deliveries by robot one step closer to commercial operations," he said.
Meji said that robotic delivery units will complement their existing delivery methods, including cars, scooters and e-bikes.
"With our growth plans over the next five to 10 years, we simply won't have enough delivery drivers if we do not look to add to our fleet through initiatives such as this," he said.
Starship recently announced 17.2 million U.S. dollars (EUR 16.5 million) in seed funding, led by Mercedes-Benz Vans. The funding accelerates the development of pilot programs in Europe and the U.S. This announcement follows the launch of more partnerships in the United States, United Kingdom, Germany, Switzerland and Estonia with Postmates, DoorDash, Just Eat, Hermes Parcel Delivery, Swiss Post and Wolt.
Starship Technologies is building a fleet of autonomous robots designed to deliver goods locally in 15-30 minutes within a two mile radius. The robots drive autonomously but are monitored by humans who can take over control at any time.
Domino's Pizza Enterprises is the master franchisor for the Domino's Pizza brand in Australia, New Zealand, France, Belgium, the Netherlands, Japan and Germany. Across these seven markets, DPE and its franchisees operate over 2,000 stores.
28 March 2017 - The President of Finland Sauli Niinisto and the President of Estonia Kersti Kaljulaid beginning her two-day state visit in Helsinki on March 7. (Reuters/Jussi Nukari)
“No, I’m not afraid. … I trust NATO.”
When you are president of a Baltic republic that shares a border with Vladimir Putin’s Russia, there really is no other response. But when it comes from Estonian President Kersti Kaljulaid, you are left with the distinct impression that she means exactly what she says.
“NATO’s deterrence has always been adequate and I’m not worried about the physical security of my country. Not at all,” Kaljulaid told me during an interview for the latest episode of “Cape Up,” recorded at the Brussels Forum hosted by the German Marshall Fund in the Belgian capital last week. “NATO deterrence has always held … all through NATO’s history.”
Buttressing that confidence is the first of 800 British troops who arrived earlier this month in Estonia, a member of NATO since 2004. According to the Guardian, other nations are sending troops to the other Baltic republics and Poland in an unmistakable bit of NATO message-sending to Moscow.
Kaljulaid is the first woman and youngest person to ever be elected president of Estonia. What makes her ascension even more remarkable is that she is in a job she did not initially seek. Kaljulaid was in her 12th year on the European Court of Auditors when the Estonian Parliament, which elects the head of state, turned to her as a compromise candidate in October. Kaljulaid is her nation’s fifth president since independence in 1918 and the fourth since the end of Soviet occupation. You have to hear what happened when I said “Soviet domination” during the interview. A no-no.
And during the Brussels Forum, the president of the young, free country rose up to deride the consumerism that defines democracy today. “Too many people in the world associate democracy with their ability to go and buy more and more every year,” Kaljulaid said . “I come from a country where it’s much more popular to remind people that democracy is available at every income level and this is something which you need to protect … The freedom of speech. The freedom of thinking. The freedom of coming and going.”
Source: The Washington Post
30.03.2017 - The Estonian government on Thursday decided to send to the parliament a bill that would introduce a time based road user fee for trucks with a maximum mass of more than 3.5 tons on public roads, reports LETA/BNS.
In accordance with the bill, the rate of the fee would depend on the sum of the maximum mass of the truck and the trailer and the number of axles, as well as the vehicle's emissions class, which means that the legislation would be conducive to the use of less polluting vehicles, spokespeople for the government said.
Where initially the Ministry of Economic Affairs and Communications planned to impose the tax on vehicles with a maximum mass of more than 12 tons, this was not supported by the European Commission. Also several interest groups spoke up in favor of levying the tax from 3.5 tons onwards to avoid distorting competition.
The rate of the fee would be 500 euros per year on the average for trucks with a maximum mass of 3.5-12 tons and 1,000 euros for trucks with a maximum mass in excess of 12 tons. The daily rate would range from 9-12 euros. It would be possible to pay the charge also per week, per month and per quarter.
The estimated positive revenue impact of the tax is about 17 million euros per year.
The measure would take effect from Jan. 1, 2018 and the money thus raised would be used for the maintenance of transport infrastructure.
30.03.2017- New loans to companies dropped somewhat in early 2017 compared to a year earlier. New housing loans grew by 10% in February year-on-year. Deposits grew faster than the banks’ loans and lease portfolio.
The growth in corporate loans and leases taken from banks and leasing companies operating in Estonia slowed somewhat in early 2017 but nevertheless remained solid. Corporate loan and leasing portfolio gained 6.8% in February compared to year ago. As corporate borrowing from abroad and from sources other than banks and leasing companies has decreased, the overall level of corporate debt has remained more or less the same. During the first two months of 2017, the volume of new loans to companies has dropped from a year ago.
The housing loan portfolio grew at a pace similar to January, gaining 5.6% year-on-year as at the end of the month. 76 million euros worth of new housing loans were issued in February, up around 10% year-on-year. Lending increased in terms of the number of contracts as well as the average value of contracts. Albeit slowing down somewhat during the first months of 2017, car leasing continues to grow at a fast pace (up 14% in February year-on-year). Overdraft and credit card loans rose 1.2% in February compared to a year earlier.
The volume of loans overdue over 60 days grew slightly, continuing the trend from January, but remained low. Although the volume of loans overdue over 60 days increased to 188 million euros in February, it accounts for only a small share of the loan portfolio (1.2%).
Corporate and household deposits grew strongly, up to almost 10% from a year earlier, which shows that deposits have grown faster than the banks’ loan portfolio. Household deposits increased by around 116 million euros in February, up 8% year-on-year. Corporate deposits showed a 11% gain on the year earlier.
Source: Eesti Pank
28 Mar 2017 - The year started with bad news for the finance ministry: a Finnish developer gave the state two apartment buildings in Lääne County, while the town of Kohtla-Järve contributed another 30 apartments. While owning real estate is usually a good thing, the state is left with property that is worth little and the expenses of which previous owners no longer want to shoulder.
“People die, successors renounce apartments that go to local governments, said aid to Kohtla-Järve mayor, Tiit Lillemets.
Apartments handed over to the state are individual properties scattered between different boroughs (Sompa, Oru, Ahtme, Kohtla-Järve). Their upkeep was costing the city more than €45,000 annually. “That is money the city could use to get something done,” the aid said.
The city solved its junk real estate problem by giving it to the state. “It is not a clever plan; it is a possibility offered by the law. Why not, if the law allows it,” Lillemets said. He added that in the past unwanted real estate has been given to the state by individuals. “No local government has thought of it.”
Lillemets could not say how many other worthless apartments, and when, the emptying mining town plans to hand over to the central government. That is up to the city council.
The official said the state can do nothing to refuse worthless real estate. “We'll see what they can come up with if they want to amend the law of property act,” the city official said. He added that the simplest solution for the government would be to saddle its local counterparts with the problem of junk property.
A simple notarial transaction
Adviser at the state property department of the Ministry of Finance Veronika Ilsjan said that transfer of junk real estate is simple. The transferor of the apartment formalizes the transaction with a notary without having to ask the state's permission, a corresponding entry will be added to the land register, and the government becomes the owner and is obligated to pay the property's bills. “The ministry has no legal basis for contesting transfers,” Ilsjan said.
If until recently the ministry handed individual pieces of real estate over to state manager RKAS, the practice has been abandoned by now as the problem has turned out to be more serious than anticipated.
“Giving apartment to RKAS comes with additional expenses, like expert assessments, auditors' and notarial fees etc. The cost of the transfer often exceeds the value of apartments. A lot of apartments have been transferred with a value of €1 because they were in serious disrepair,” Ilsjan said.
Head of the ministry's planning department Tiit Oidjärv said that there is reason to believe the problem will become worse as Statistics Estonia forecasts continued population decrease, with some counties set to lose a fifth of residents in the next few decades. “Even if Estonia's migration balance becomes permanently positive, urbanization will very likely continue in Estonia, just as it will elsewhere in Europe, which means residential space in rural areas will increasingly be left empty,” the official said.
The ministry believes that local governments are most capable when it comes to tackling the problem of junk property, with help from the government.
Amending the law of property act so that private property would be transferred to local governments instead of the state is currently being considered. Local governments have been opposed to the change so far.
The ministry also wants to amend the immovables expropriation act by allowing the process only in cases where apartments are located in habitable buildings and it proves impossible to contact owners.
The state wants to demolish
The ministry asks local governments not to follow Kohtla-Järve's example in transferring real estate to the state. “Transfer [of apartments] will not solve the problem, while it makes it costlier for the state to manage property,” Oidjärv said. The ministry suggests local governments emulate the town of Valga that is tearing down empty buildings and moving remaining residents into a single one.
Lillemets said that the ministry's recommendation to demolish empty buildings is not suitable for the city. “It is something that could be considered in a situation where the building is empty, or where you have people living in two or three apartments. However, what to do if you have two empty flats in a building that has a total of 30 apartments?”
Lillemets added that people do not want to leave apartments they've privatized. “It would be necessary to compensate people were we to do it (move people – ed.) forcibly,” the official said.
The empty apartments problem is not going anywhere for Kohtla-Järve as the town's population is aging and young people are moving away.
The problem will only become worse for the state as apartment associations have also discovered it is possible to get rid of bothersome apartments easily. Põhjarannik wrote that an apartment association in Kohtla-Järve transferred an apartment in very poor condition to the state on March 2. The same association is planning to hand over another flat before the month is out.
1.04.2017 - The revenue of Estonia's state-owned logistics company Eesti Post AS operating under the Omniva brand increased 27% to 95.8 million euros last year while its profit shrank 20 % to 1.2 million euros.
"In spite of the decline in the use of traditional postal services and profitability challenges, Omniva has succeeded in growing its business from year to year by keeping pace with its customers' changed needs and introducing new business models," chairman of the supervisory board Merike Saks said LETA/BNS.
The revenue of the group's parcel business in the Baltic region grew 17% over the year. The increase in parcel business was especially notable in Latvia, where revenues from parcel services grew by 90% compared to the previous year. In Lithuania, Omniva's revenues from parcel business increased by 30% year over year.
The parcel machine service continued to show rapid growth in all three Baltic states, increasing by 42%. The service grew by 25% in Estonia, 92% in Latvia and 90% in Lithuania. Altogether, Omniva delivered 40% more parcels to its customers via parcel machines in 2016 than it did in 2015.
Owing to the popularity of parcel machines as well as to the rapid growth of e-commerce, Omniva expanded its parcel machine network by a total of 35% in the Baltic region, including an increase of 54% in Latvia and 49% in Lithuania. It is the most extensive parcel machine network which covers the entire Baltic area, the company said.
Omniva's fastest growing business area is international business whose revenue increased by 107% in 2016. "Although the twofold growth is a remarkable result, I am confident that the growth in international e-commerce will not slow down. Instead, the upward trend will continue," Eesti Post CEO Aavo Karmas said.
Omniva delivered close to 40 million shipments to around 100 destination countries and created 50 new jobs in its distribution center in Tallinn last year in connection with the rapid increase in this business area.
Revenues from the information logistics business increased by 35% compared to 2015. The expansion of Omniva's operations in Latvia and Lithuania as well as the increase in the volumes in Estonia were important steps in this area of business. An important step in cross-border cooperation was the conclusion of a strategic partnership with Pagero, the leading operator of e-invoices in Europe, which enables Omniva to provide a broad international reach in e-invoicing to its Baltic customers.
Revenue from postal services which Omniva only provides in Estonia continued to decline, decreasing by 3% over the year. The reason for the decline is the continued decrease in the volume of letter services. The volume of letter services shrinks by 10-15% each year, Karmas observed. Last year the volume of domestic letters fell by 12% and deliveries of advertisements and periodicals by 2% and 3%, respectively.
The group's investments increased by 20%, amounting to 7.7 million euros.
The group employed an average of 2,244 people in the Baltic states in 2016.
30 Mar 2017 - In the event of an attack on the Suwalki corridor, Russia in one swoop will provide land communication with the Kaliningrad region and cut off the Baltic States from the main territory of NATO, the Polish edition of ONET cautions. However, while there is still no such danger, “this 70-kilometer stretch of territory of Poland must be urgently strengthened,” advises the author, Polish journalist Przemyslaw Henzel.
Experts fear that this strategically important region is a potential place for a Russian land invasion, the result of which may be the emergence of a "bridge" between Kaliningrad and Belarus, as well as the separation of the Baltic States from the rest of NATO territory. In the context of this theoretical scenario, the issue of the so-called Fulda Corridor of the Cold War times reappears.
"The Suwalk isthmus is the biggest breakdown of NATO in recent weeks," the author notes. “Having a length of 70 kilometers along the Polish-Lithuanian border near the city of Suwalki, and located between the Kaliningrad region and Belarus, it is of great importance for the eastern flank,” the author says. This region provides a ground connection with the Baltic countries. And, using this very road, if necessary, other states of the alliance would be able to support Lithuania, Latvia and Estonia.
General Frederick Hodges, Commander of the US Armed Forces in Europe, does not hide his fears. In early October he drew attention to the potential risk associated with this part of NATO territory. This question was written not only by Western media, but also by the Daily Times in Pakistan.
The worry of the US military is the result of fears that a possible seizure of this region by Russians would not only lead to the creation of a land bridge connecting Kaliningrad and Belarus, but would also separate the Baltic States from the rest of the alliance's territory. “In such a scenario, rendering assistance to Lithuania, Latvia and Estonia by other NATO states by land would be impossible,” Henzel says. “While the debate on this topic is still theoretical, it should be related to two practical issues - the military strengthening the eastern flank of NATO, as well as the possible plans of Poland for its north-eastern border”.
The military alliances are concerned about the exercises being organized by Russia in the vicinity of the Baltic States. General Hodges, during a visit to the Pentagon last week, stressed that they had not been warned and there were no observers from the West.
"We learn about them only when they are conducted. This is a threat and a cause for concern," the Commander acknowledged.
There are already serious concerns about whether NATO is able to react so quickly to prevent a possible seizure of the Suwalki corridor by Russian military forces, for example, those who participated in the exercises.
Source: Georgia Today
29 Mar 2017 - The governments and peoples of the Baltic States recognize that, following Russia’s takeover of Crimea and intervention in eastern Ukraine, they are once again in the Kremlin’s sights facing the prospect of Russian destabilization and even outright invasion.
NATO’s leadership termed Russian strategy “hybrid warfare,” defining it as warfare in which “a wide range of overt and covert military, paramilitary, and civilian measures are employed in a highly integrated design.” 1 Questions were raised immediately about the suitability of the designation, as the label NATO adopted fails to adequately capture the reality of what Russia inflicted on Ukraine—and may inflict on states in the Baltic Sea Region (BSR) in the near future.
Russian successes in Crimea reinvigorated two longstanding instruments of its power: its armed forces and its capacity for intensive information warfare. 2 “Grey-zone” perhaps captures the orchestrated multidimensional nature of Russian actions calibrated to gain specified strategic objectives without crossing the threshold of overt conflict and exploit Western concepts of war and peace as two distinct conditions. 3 Any conflict between NATO and Russia will likely occur at the Article 4 rather than the Article 5 level, complicating any Western response.4
Hybrid War in the BSR: Political and Information Warfare Dimensions
It is possible to count all the fighters, bombers, troops and ships in the Baltic and arrive at a correlation of forces. But the BSR is a peripheral region, and only three things matter when it comes to its security:
Russia is interested less in territory than in effect. NATO’s focus on military measures to defend the Baltic States may overlook the challenge posed by all arms of Russian power to identify and exploit political, social, economic, and military vulnerabilities in its target states and the Western alliance.
These dimensions have been underplayed in NATO thinking, a tendency reinforced by the military nature of its Charter and institutional culture. Questions remain as to whether NATO’s own legal framework and traditional instruments are sufficient to deal with these non-military challenges, and certainly whether they can respond to a fast-changing situation. The means Russia is prepared to use in order to deceive and confuse NATO are based on the same tools it used during the Cold War, but it has adapted them to the mores of the social media age, which lacks the experience to judge the import of Russian messaging or actions.
Applying the Hybrid Model to Warfare at Sea
Russia’s high-end forces would not constitute the first movers in a hybrid conflict. They should be regarded as deterrents to local resistance and intervention by NATO and other Nordic states. It would rather pursue more ambiguous methods.
Broadly speaking, two scenarios for a Russian campaign in the BSR appear possible:
1. A low-key, possibly opportunistic, campaign that exploits real or manufactured discontent among Russian compatriots to destabilize one or more of the Baltic States, creating a “frozen conflict” that undermines NATO’s credibility; or
2. A more structured, high-tempo campaign to achieve the same objectives against NATO power in the BSR and also render Nordic defense cooperation redundant.
It is reasonable to assume that the Baltic Sea Fleet and other organs of Russian maritime power will play supporting rather than leading roles in any such conflict.
Aside from Moscow’s ability to manipulate the loyalty of Russian expatriate communities in the Baltic states, many of the points where it can apply pressure lie on or under the Baltic Sea itself. These include:
Geographically Isolated Islands and Disputed Borders
The Bornholm, Gotland and the Aland group are respectably Danish, Swedish, and Finnish islands that have considerable strategic significance in the BSR. Many are ideal as bases, supply points, staging areas, and jumping off points for SOF operations and ambushes, while bays, fjords, and peninsulas provide hiding places and launch points for fast raiders.
Map indicating large islands within the Baltic Sea. (Heritage Foundation)
Modern economies depend upon a remarkably vulnerable information and communications infrastructure. Roughly 95 percent of intercontinental communications traffic—e-mails, phone calls, money transfers, and so on—pass through fiber-optic cables that “lack even basic defenses, both on the seabed and at a small number of poorly guarded landing points.” 5
When it comes to the Baltic Sea particularly, Poland, Lithuania, and Latvia have only a few nodes that need be severed, while Estonia, the Nordic countries, and Germany have much more redundancy in their connections. Still, the economic disruption caused by severing these undersea cables would be considerable in time and cost and be difficult to mitigate, even for those countries with multiple nodes. They would therefore be a prime target in a hybrid warfare campaign.
It has long been recognized that Estonia, Latvia, Lithuania, and Poland depend upon Russian energy. This exposes them to the possibility of economic coercion. These states have reduced their dependence on Russian supplies, but diversification has been difficult given the cost of replacing existing infrastructure and vulnerabilities remain.
Port and Supply Chain
Ports and ships could be subject to sabotage and strikes using SOF as part of a hybrid offensive. Yet the most serious threat could come from cyberattacks, a concern that already animates much of the landward resilience debate. Modern ports could not operate absent sophisticated computer systems, while modern ships are increasingly automated to cut crew costs. Any prolonged interference with the region’s maritime trade could severely impact industrial production flows and economic security.
Why Would Russia Disrupt the BSR?
Russia is a revisionist power. Internationally, it wants to revise the existing regional order at the least possible political and military cost to itself, diminish U.S. power, and further a multipolar world. Domestically, Putin’s government requires an enemy to divert attention from internal troubles. The Baltic States lie at the point where American power is most extended and Russian power can be concentrated most easily. As Russia is under no illusion it can fight the U.S. directly, or a coalition of America’s core allies, its challenges will stay below the level of direct confrontation.
The Soviet Union invested around fifty percent of its shipbuilding capacity in the St. Petersburg area. A second vital facility is located in the Kaliningrad Oblast. The Baltic Sea has also become a vital conduit for Russian trade. Prolonged interruptions in flows of energy and goods would inflict considerable damage on Russia’s poorly diversified economy. During 2015, 52 percent of Russian container traffic passed through St. Petersburg. Europe remains a major customer for Russian crude oil shipped by tanker from ports near St. Petersburg. On the seabed is the Nord Stream gas pipeline. A second pipeline–Nord Stream 2–has been proposed that would double the capacity. This connection reinforces the dependency and mutual interest that already exists between the EU and Russia and risks compromising Western European responses to possible Russian aggression in CEE.
The Baltic Sea Region has plentiful points of vulnerability where Russia can test Western resolve. While these are not confined to the Baltic States, the most obvious point of leverage is the Russian minorities who reside in each one with concentrations in port cities and other maritime areas. 6 Nor are the Baltics removed from Russia’s deeply ingrained sense of insecurity arising out of its loss of strategic depth. Advancing the Russian right flank to the Baltic Sea would right a perceived wrong, prevent the encirclement of Kaliningrad, the main base of the Russian Baltic Sea Fleet, and provide a platform from where Russia could threaten the entire Baltic Sea littoral.
Sweden and Finland are clearly concerned about this possibility. Sweden has returned its army garrison to the strategically important island of Gotland, while towns and cities across Sweden have been told to make preparations against a possible military attack. 7 Conscription has also been reintroduced. 8 However, any move by either to join NATO could “provoke Russia to launch a pre-emptive provocation in order to demonstrate the alliance’s weakness” and deter either country from proceeding with its application. 9
Russian Military Capability
Despite the importance of the Baltic Sea routes, the Russian Baltic Sea Fleet is the weakest of Russia’s four fleets (Baltic, Black Sea, Pacific, and Northern). It continues to have the lowest priority for new units.
That does not mean modernization has not taken place. Since 2007, the fleet has been upgraded with two new classes of corvette equipped with land-attack missiles, a capability that is new to the Baltic Sea fleet. 10 However, the fleet’s submarines have not been modernized and remain inferior to German and Swedish boats. Lacking AIP propulsion, which Russian industry is having problems mastering, they are also likely to be noisier. The fleet’s anti-submarine warfare (ASW) and mine counter-measures (MCM) capabilities are also limited.
That said, the Baltic Sea is relatively small with an average width of only 193km (120 mi). The sea and surrounding littoral can–and almost certainly would–be dominated by air power and air-deployable ground forces in any high intensity conflict. In particular, Russia is able to effectively dominate large areas of the Baltic Sea and air space using missile forces based in the Kaliningrad and Leningrad oblasts. 11 TheIskander-M mobile ballistic missile is capable of hitting targets in much of Sweden and from southern Poland to central Finland, whether fixed or mobile.
NATO movement would be affected in all environments: air transports bringing reinforcements into theater would be at risk from manned interceptors and a layered, air-and-missile defensive system equipped with the S-300 and the highly-capable S-400 systems. Movements by sea would be threatened by the Bastion-P coastal defense system based on the supersonic 300km-range P-800 Yakhont anti-ship missile, which Russia has announced will shortly be deployed to the Kaliningrad Oblast. 12
NATO ground forces, meanwhile, would need to travel further than Russian units to reach the capitals of the Baltic states and throughout the transit could be subjected to long-range air and ground-based bombardment.
Naval “Hybrid Warfare”
Hybrid warfare as deployed by Russia in Crimea and Eastern Ukraine has received considerable analytical coverage; hybrid warfare at sea less so. 13 The geography of the Crimea and Ukrainian theaters, and the circumstances of the incursions, meant the naval role was limited in both. However, Russia appears to have taken note of the success China has achieved with hybrid warfare tactics in the South China Sea, including its harassing behavior as multiple incidents have taken place on and over the Baltic and Black Seas. 14 At the same time, Russia has resumed Soviet-style probing missions against NATO countries, while the Baltic states, Sweden, and Finland have all had their territorial waters and airspace compromised. 15
The Chinese have made extensive use of their maritime paramilitary forces to assert maritime claims and to deny neighboring states access to waters for fishing and resource extraction purposes. The opportunities for the disruptive use of coast guard and border forces appear to be less in the BSR yet Russian behavior–for instance withholding ratification of the Narva Bay and Gulf of Finland Treaty–demonstrates that they are maintaining the potential for disruption inherent in the handful of disputes that remain. 16
Given the essentially political nature of hybrid war, mitigation measures should focus on political, economic, and information outcomes. Still, Russia needs to be convinced that all BSR states are committed to challenging Russian aggression at sea. The maritime component of NATO’s 2014 Readiness Action Plan includes intensified naval patrols in the Baltic built around the Standing NATO Maritime and Mine Countermeasures Groups, increased sorties by maritime patrol aircraft, and an expansion of the annual BALTOPS naval and amphibious exercise. 17 However, BALTOPS in large measure still reflects the Alliance’s focus on high-end military operations. Changes have been made that broaden its focus and these need to be maintained and expanded in order to continuing raising maritime readiness and interoperability standards at all stages along the deterrence-to-conflict continuum. In addition, both Baltic and NATO navies need to exercise lower-end maritime security, VBSS, fishery protection, and SAR missions, while regional navies need to demonstrate they can act seamlessly with regional coast guards and border forces, port authorities and other maritime agencies, police forces and intelligence services. Furthermore, cooperation in intelligence sharing and analysis through a BSR Hybrid Threats Fusion Cell coupled with a strategic communications response capability to provide swift and consistent factual responses to false narratives would contribute to building societal resilience.
Societal resilience also requires less dependence on Russian energy supplies. A new facility for the import and regasification of liquefied natural gas (LNG) has been built at Klaipeda in Lithuania. Ensuring its security is vital. Further diversification could be achieved if additional terminals were to be built in Estonia and Latvia with reversible-flow pipelines linking all three. Ideally, a trans-Baltic pipeline should be built to link the Baltic States with the Swedish system. 18 These pipelines would supplement the “NordBalt” power cable laid between Sweden and Lithuania. Notably, this link was interfered with by Russian warships on three occasions during the course of its construction. Finally, BSR states need to place a strong emphasis on port and supply chain security. This must include defenses against cyber-attacks. Protecting this largely maritime infrastructure would place a premium on effective Baltic Sea maritime domain awareness (MDA).
Russia considers itself to be a maritime power. It has always sought to control the seas that give it access to the world ocean. The Baltic Sea is vital in this regard. Despite this perception, Russian power, when compared to its Soviet predecessor, is sadly diminished. It is therefore understandable that it should continue to augment its remaining military power with the measures of influence, deception, and covert action that were so characteristic of the Soviet approach to inter-state relations.
Any repetition of the Crimean model is likely to be a whole-of-government effort of political subversion and destabilization in which the conventional military—as opposed to SOF and proxy militia—will play a largely passive role until the last minute, or unless the political campaign fails and can only be redeemed using conventional military force. Whole-of-government aggression demands a whole-of-government response.
In this sense, there is no such thing as maritime hybrid warfare, certainly in Russian political or military doctrine or practice. What states in the BSR may be confronting even now, however, is a long-term campaign of politically motivated societal disruption, aspects of which may occur in, through, or from the maritime domain. The seaborne aspects of the campaign will be maritime rather than exclusively naval in that what takes place could involve any of the ways people use the sea, the seabed, and the airspace over the sea. It will involve warships, submarines, and military aircraft but also include fisheries, shipping and ports, coast guards, and border forces along the way. Conventional naval forces are likely to play an analogous background role in any disruptive campaign at sea in the Baltic, as they did during the Crimea invasion and Ukraine intervention.
Martin N. Murphy, PhD is a Visiting Fellow at Corbett Centre for Maritime Studies at King’s College London. He has held similar positions with CSBA and the Atlantic Council in the U.S. He is the author of three books and numerous book chapters and articles on maritime security and unconventional warfare at sea. His next book, On Maritime Power, is due for publication in 2018.
Gary Schaub, Jr., PhD, is a Senior Researcher at the Centre for Military Studies, Department of Political Science, University of Copenhagen. Before that he held a number of academic positions in the U.S. including Assistant Professor of Strategy at the U.S. Air War College.
1. NATO. ‘Wales Summit Declaration’. Issued by the Heads of State and Government participating in the meeting of the North Atlantic Council in Wales, 5 th September 2014.
2. Kier Giles, et al. ‘The Russian Challenge’, Chatham House Report, June 2015, p. 46. NATO Article 4 states that “The Parties will consult together whenever, in the opinion of any of them, the territorial integrity, political independence or security of any of the Parties is threatened.” NATO, ‘The North Atlantic Treaty’, last updated 21 st March 2016.
3. For clear definitions of “hybrid” and “grey-zone” conflicts, and comparisons between the two, see Frank Hoffman. ‘The Evolution of Hybrid Warfare and Key Challenges’. Statement before the House Armed Services Committee, 22nd March 2017.
4. Stephen F. Larrabee, et al. Russia and the West after the Ukrainian Crisis: European Vulnerabilities to Russian Pressures. Santa Monica: RAND, 2017, pp. 10-11.
5. Robert Martinage. “Under the Sea: The Vulnerability of the Commons,” Foreign Affairs, Vol. 94, No. 1, January/February 2015, p. 117.
6. Martin N. Murphy, Frank G. Hoffman and Gary Schaub, Jr. ‘Hybrid Maritime Warfare and the Baltic Sea Region’. Copenhagen: Centre for Military Studies, University of Copenhagen, November 2016, pp. 11-14.
7. Richard Orange. ‘Swedish towns told to “make preparations regarding the threat of war and conflict” with Russia’. Daily Telegraph, 15 th December 2016.
8. Daniel Dickson; and Bjorn Rundstrom. ‘Sweden returns draft amid security worries and soldier shortage’. Reuters, 2 nd March 2017.
9. Edward Lucas. ‘The Coming Storm: Baltic Sea Security Report’. Washington, DC: Center for European Policy Analysis, June 2015, p. 4.
10. ‘Russia reinforces Baltic Fleet with ships armed with long-range cruise missiles in ‘worrying’ response to Nato build-up’. Daily Telegraph, 26 th October 2016.
11. Kaas. ‘Russian Armed Forces in the Baltic Sea Region’.
12. ‘Russia deploys “Bastion” coastal missile complex to the Kaliningrad region’. UAWire, 22 nd November 2016.
13. Charles K. Bartles and Roger N. McDermott. ‘Russia’s Military Operation in Crimea: Road-Testing Rapid Reaction Capabilities’. Problems of Post-Communism, Vol. 61, No. 6, November–December 2014, pp. 46–63; Admiral James Stavridis, USN (rtd.). ‘Maritime Hybrid Warfare is Coming’. U.S. Naval Institute Proceedings, Vol. 142, No. 12, December 2016, pp. 30-33.
14. For example, Julian E. Barnes and Gordon Lubold. ‘Russian Warplanes Buzz U.S. Navy Destroyer, Polish Helicopter’. Wall Street Journal, 13th April 2016.
15. Thomas Frear, Łukasz Kulesa and Ian Kearns. ‘Dangerous Brinkmanship: Close Military Encounters between Russia and the West in 2014’. European Leadership Network Policy Brief, November 2014.
16. ‘Russian envoy: Ratification of border treaty with Estonia obstructed by bad relations’. The Baltic Times, 9 th July 2016.
17. NATO. ‘NATO’s Readiness Action Plan’. NATO Fact Sheet, May 2015; Megan Eckstein. ‘U.S. Led BALTOPS 2015 begins with heftier presence than last year’s exercise,” USNI News, 5 th June 2015; Megan Eckstein.‘Foggo: BALTOPS 2016 includes more anti-sub, more challenging amphibious operations’. USNI News, 15 th June 2016.
18. Milda Seputyte. ‘Lithuania grabs LNG in effort to curb Russian dominance’. Bloomberg, 27 th October 2014; ‘Sweden gets new LNG terminal’. World Maritime News, 20 th October 2014.
Source: Center for International Maritime Security
30 Mar 2017 - During the occupation of the Baltic Countries by the Soviet Union, Estonians, Latvians and Lithuanians were told that investments in people, social needs and construction were priorities. After the collapse of the Soviet Union, this myth was twisted and the “ungrateful Baltic countries” were reminded that the Soviet Union “tore a piece of itself off and gave it to them” and that “Estonians, who produced nothing, were fed by the Soviet Union”, or, as we heard on a talk show on Russian State TV: “We should submit a bill to Latvia for constructing ports, industry & economy” (see the video below for these claims). We also reported last month in the Disinformation Review the claims that “people in the Baltic states were better off in the Soviet Union compared to nowadays” (see the table )
Now there is further solid proof that these claims are not true. Gatis Krumins, a Latvian historian, has discovered detailed accounting reports of the State Bank of the USSR from 1946 to 1991. After studying about 45,000 pages, Krumins found that during the period in question, the main investments in the Baltic countries went into Soviet military spending and that the Baltic countries were rather subsidising other regions of the Soviet Union. In the case of Latvia, Krumins calculated that a total of 24,684 billion rubles was spent from the USSR budget in Latvia, while 40,645 billion went to the state budget of the USSR. The situation was similar in Estonia and Lithuania.
The author concludes: “Spending of all the profit generated in the economy outside the territory of the Baltic countries and the simultaneous disproportionate military expenditures from the revenue generated in the Baltics largely explains the year-to-year increase in the socio-economic underdevelopment in comparison with other developed Western countries; the inhabitants of the Baltic States were able to match these countries in terms of quality of life prior to the Soviet occupation”.