Estonia is suffering the worst inflation in the euro area, with consumer prices rising at an annual rate of nearly 22 percent, the Washington Post reported. This tiny Baltic nation, and its neighbors, Latvia and Lithuania, represent extreme examples of the price pressures sweeping Europe and confronting policymakers, executives and consumers with a challenge unseen for 40 years. Some Estonian employers must raise salaries several times each year. Others are retooling their operations to use less energy.
Estonia’s president on Thursday tasked the leader of the main opposition party to form a new government, a day after Prime Minister Juri Ratas and his Cabinet stepped down in the wake of a corruption scandal in Ratas’ ruling Center Party, the Associated Press reported. Kaja Kallas, chairwoman of the center-right Reform Party that emerged as the winner of the 2019 general election, will have 14 days to put together a new Cabinet, President Kersti Kaljulaid said.
However bad a spiralling money laundering scandal has been to the three Baltic countries, it could get even worse. Financial regulators in Estonia and Latvia told the Financial Times they were afraid Swedish banks — which dominate both headlines on money laundering and their banking systems — could withdraw from the region, just as Danske Bank and Nordea have already done amid dirty money allegations, the Financial Times reported. “Sure, we are very worried,” said Peters Putnins, head of the Latvian regulator.
Danske Bank has been forced to close all operations in the Baltics and Russia in response to the largest money-laundering scandal, which has prompted EU authorities to launch an investigation of Danish and Estonian regulators. The bank was given eight months to return customer deposits and transfer its loan contracts to another provider in Estonia, after a report released last autumn revealed the extent of the failures at the bank, the Financial Times reported.