Estonia

Furniture manufacturer Thulema filed itself for bankruptcy in Harju County Court today, saying that liquidity problems and difficult market situation makes it impossible for the company to meet its restructuring plan that was approved last October, reported aripaev.ee. The shareholders of Thulema are Finland's Puustelli Group with 29% of shares, BenSov OÜ (18%), Triomentor (35%) and Revalbonus (18%). The three last-named shareholders acquired a holding in Thulema in December 2009. As of April 30, Thulema's liabilities were 40.2 million kroon while assets were valued at 38.9 million kroons.
Read more
As Greece resists European demands for wider austerity measures, the contrast with the Baltic states couldn't be starker, The Wall Street Journal reported. Faced with similar market worries about their fiscal positions a year ago, Estonia, Lithuania and Latvia bit the bullet. Now there is light on the horizon: Standard & Poor's has lifted its rating outlook on all three to stable from negative, citing the successes achieved in fiscal consolidation. Greece should take note. All three have retained effective currency pegs rather than take the option of devaluation.
Read more
The tiny Baltic states have pursued closer integration with Europe with enormous zeal. But the price of monetary union may be giving them pause, The New York Times reported. Economists and ordinary citizens alike are watching the protests rumbling through the streets of Athens and the slow response to Greece’s problems coming out of Brussels. “Countries like Estonia and Latvia were once desperate to get in,” said Alf Vanags, director of the Baltic International Center for Economic Policy Studies in Riga.
Read more
Swedish banking group SEB said on Tuesday it would inject more capital into its operations in Lithuania and Latvia due to rising bad loan provisions. SEB spokeswoman Viveka Hirdman-Ryrberg said the bank made 5.95 billion Swedish crowns ($847 million) of loan loss provisions in the first half of the year due to the global financial crisis. Lithuania's economy nosedived into its worst recession since early 1990s with gross domestic product falling 20.2 percent in the second quarter.
Read more
Estonia's recession deepened in the second quarter, but the quarterly rate of decline eased, suggesting the country's economic fall may be bottoming out, The Wall Street Journal reported. The Baltic country's gross domestic product was 16.6% lower in the second quarter compared with the same quarter of 2008, Statistics Estonia said Wednesday. In the first quarter, economic output was down 15.1% from a year earlier. The national statistics agency said lower manufacturing and construction, due to reduced domestic and external demand, weighed on second-quarter output.
Read more
Housing markets across Europe suffered steep declines in both prices and activity during 2008 and the situation isn't likely to improve much in 2009, according to an annual report published Thursday by the U.K.-based Royal Institution of Chartered Surveyors. A continued lack of mortgage-credit availability will keep European housing markets in the doldrums, the survey said. The report shows that while U.K.
Read more
Businessman Urmas Sõõrumaa and his partner Gunnar Kool’s plan to establish one of the leading luxury clothing and accessories chains in Eastern Europe has failed. Last week the court started bankruptcy proceedings for Versus Invest, Eesti Ekspress reported. Franchiser Versus Invest operated ten stores that sold clothing and accessories by Hugo Boss, Joop, Calvin Klein and Zegna. Six of them were in Estonia, one in Latvia and three in Belorussia. According to the plan, Versus Invest was supposed to open ten new stores during 2009.
Read more
Moody's Investors Service placed the bond ratings of Estonia and Lithuania on review for possible downgrade Tuesday, citing severe deterioration in the regional macroeconomic environment. Analysts said a downgrade was likely. The three Baltic Sea-hugging neighbors Latvia, Lithuania and Estonia face an uphill struggle to resuscitate their economies, mired in recession or headed there, rein in their current-account deficits and maintain their currency pegs, MarketWatch reported. Within the emerging-markets universe, Eastern Europe is the region most vulnerable to economic and financial risk.
Read more