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Ericsson Eesti board chairman Veiko Sepp told BNS that network equipment of the newest, fourth mobile communication generation would be produced at the Tallinn facility. For that purpose Ericsson will renew lines and will launch two new ones.

"The new lines will add components more closely and faster on printed circuit boards, it is the last word in technology," Sepp said. He added that Ericsson had filed an application to Enterprise Estonia for a subsidy from the technology investments program.

Sepp added that broadband network installations would be produced at the facility as the result of the renewal. Last week, EMT opened such a fourth generation (4G) data communication test network. Ericsson's Tallinn factory will also start producing 3G mobile communication installations and will continue producing equipment necessary to bring fixed broadband internet to home and office.

Sepp said that big growth in demand could be currently foreseen in terms of broadband networks. Sepp quoted the example of the Australian telecommunication company Telstra, which will cover the whole Australia with 3G high-speed data communication. "Besides, there is busy building underway in America."

Ericsson Eesti has a total of 1,400 employees, of these 35 percent with higher education.

It is the Finance Ministry's assessment of the government sector deficit in 2009, which is based on preliminary data of the state accounts. On March 26 Statistics Estonia will publish the final data on the basis of which official meeting of the Maastricht criteria will be calculated.

Finance Minister Jurgen Ligi told reporters at a goverment press conference that the shortfall of 3.7 billion kroons (EUR 236 mln) means that more was economized than there was hope for by the measures taken for the purpose. Among other things, the fact that the figure is smaller than earlier assessments is partly because the public sector is not used to assess its deficit very precisely.

Prime Minister Andrus Ansip added that the shortfall, expressed as the final percentage, depended on the updated indication of the gross domestic product by the statistical office.

Ansip added that he couldn't be satisfied with the local governments shortfall of 1.4 billion kroons, of which one billion was generated by two local governments, Tallinn and Parnu. "Although 1.7 percent of GDP is one of the best indicators in the European Union it is still a deficit. Public sector expenditures still stand higher than revenues and such a situation cannot continue long," Ligi said. "The budget surplus must be restored in the next few years."

(EUR 1 = EEK 15.65)

The Lithuanian company is planning to open a paints store in Vilnius.

Last November Varvikeskuste Grupp established its Latvian subsidiary Krasu Grupa. It operates a paints store and warehouse in Riga.

"We have become the biggest company specializing in the sale of paints in Estonia and opportunities of growth are limited in our own country," said Olle Saare, CEO and owner of Varvikeskuste Grupp.

"At present it is extremely difficult to earn a profit from these markets but we will do our best to avoid a major loss. If the market becomes normal at least a little, we are already in the picture or have won a certain position," Saare commented on the situation on the Latvian and Lithuanian markets.

The turnover of Varvikeskuste Grupp in 2009 was 90 million kroons (EUR 5.7 mln).

(EUR = EEK 15.65)

The head of new markets at Enterprise Estonia's globalization division, Meelis Kuusberg, told BNS that Sheikh Saied Nasser Al-Badawi is one of the owners of Saudi Arabia's Badawi Group which has interests in construction and development and production of building materials.

Operations of Badawi Group stretch from Russia to Kyrgyzstan and from Yemen to Saudi Arabia, Kuusberg said. "Hopefully a couple of Estonian businesses too will soon see cooperation sprout to develop Saudi sales channels."

Enterprise Estonia at whose invitation the Saudi sheikh visited this country "sought to give an integrated picture of Estonia's advantages which could provide points of contact between the two countries," Kuusberg said.

Saudi Arabia may be interested in the Estonian wood sector, food sector, and IT and communications sector, said Ulari Alamets, board chairman of Enterprise Estonia.

Alamets said that the head of the Saudi delegation, who is active in construction, has good relations with his country's business elite and is charting business opportunities in Estonia.

Erki Peegel, chief of communication at Enterprise Estonia, told BNS that the delegation also is interested in logistical opportunities and oil shale energy in Estonia.

The Saudi delegation has met with the Estonian prime minister and minister of economy and communications and visited the Port of Tallinn.

According to Eurostat the GDP per inhabitant in Latvia was 55.7 percent of the EU average in 2007. The corresponding figure for Lithuania was 59.3 and for Estonia 68.8 percent.

The survey looks at countries' per capita GDP on the basis of purchasing power parity for 2007, showing the Estonian figure as 17,100 euros per resident.

In 2006, Estonia's standard of living made up 65.3 percent of EU average.

On the basis of these figures the Baltic countries are among the 66 poorest regions in the European Union where GDP per inhabitant is below 75 percent of the EU average.

The richest region in the European Union is central London and the poorest Severozapaden in Bulgaria, with the living standards between these areas differing by more than sevenfold.

The twenty poorest regions in the European Union lie in Bulgaria, Romania, Poland and Hungary. The richest regions are in Western Europe -- in Germany, Great Britain, the Netherlands and Denmark.

In central London the gross domestic product per inhabitant is 334 percent higher than the EU average, totaling 49,100 euros per inhabitant a year.

In the poorest area in Bulgaria the GDP is 26 percent of the EU average, an average of 6,400 eruos a year. Other rich areas are Luxembourg, Brussels and Hamburg. In Eastern Europe only Prague was listed among the 20 richest areas.

OECD Secretary General Angel Gurria, who signed the agreement with Estonian Foreign Minister Urmas Paet, said that the decision of Estonia's membership in OECD would be made this spring, spokespeople for the Estonian Foreign Ministry said.

The agreement on privileges and immunities signed in Paris is based on the OECD tradition that ensures the independence of OECD analyses. Estonia will have to ratify the agreement in parliament.

Paet said that OECD had already drawn up several analyses about Estonia and they had been of a very high level and useful. "For example, the first Estonian economic overview published in 2009 raised a lot of attention and triggered discussions about Estonia's economic policy," Paet said.

OECD is a forum of developed industrial countries with a permanent seat in Paris. The organization was established in 1961 and its forerunner was the Organization for European Economic Cooperation that was called into existence for the administration of US and Canadian aid to Europe after World War II, or the so-called Marshall plan.

OECD currently has 30 member countries: Australia, Austria, Belgium, Canada, the Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, the Netherlands, Iceland, Ireland Italy, Japan, Korea, Luxembourg, Mexico, the Netherlands, New Zealand, Norway, Poland, Portugal, Sweden, Slovakia, Spain, Switzerland, the United Kingdom and the United States of America.

The OECD Convention is complemented by Supplementary Protocol No. 1, which concerns participation by the European Community in the work of the organization, while Supplementary Protocol No. 2 sets out the privileges and immunities enjoyed by the organization.

These protocols cover the founding countries of the OECD.

Since 1960 separate privileges and immunities agreements have been concluded with all new member countries and with a number of non-members.

At its May 2007 Council Meeting at ministerial level, the OECD decided to open accession negotiations with Chile, Estonia, Israel, Russia and Slovenia.

Chile and the OECD signed an accession agreement on Jan. 11, 2010.

Parts said in his remarks to BNS that mid-May is a tentative deadline by which the government should decide either in favor of an IPO or increasing the company's stock capital by means of a cash payment by the state.

The government is at one over the need to carry out the investment program of Eesti Energia, and the way financing will be arranged must be decided during 2010, the minister said.

According to earlier information Eesti Energia would sell newly issued shares and the float would make up one-third of the total number of shares. The money thus raised would amount to 450 million euros.

Eesti Energia needs additional money mainly to build new oil shale burning generating units and increase its capacities for refining shale oil.

The government discussed options for financing Eesti Energia last fall and put off the decision until spring 2010.

"If Estonia joins the eurozone, the economy will grow 5 percent next year," SEB analyst Hardo Pajula said when presenting the fresh forecast.

He added that if Estonia fails to adopt the euro, the economy will remain on a downward path.

As the main reason that could prevent the arrival of the euro, Pajula named the ongoing developments with regard to Greece.

Pajula said that right now, accession to the eurozone is rather a matter of political choice.

Pajula observed that the upgrade in Estonia's economic growth forecast was made at the initiative of Sweden.

"The bank has raised the growth forecasts of all countries of the Baltic Sea region and this holds true also for the forecast concerning Estonia," the analyst explained.

SEB Group on Tuesday published Nordic Outlook, its regular economic survey.

In the survey, it says that even though wages will keep declining, inflation in Estonia is estimated to speed up this year. The annual rate of inflation in Estonia will be 2 percent in 2010 and 4 percent in 2011.

Estonia's unemployment rate is seen to climb to 16.4 percent in 2010 and decline to 12.5 percent in 2011.

Latvia's GDP is forecast to drop 3 percent this year and rise 4 percent in 2011. The economy of Lithuania is seen to grow one percent in 2010 and 4 percent in 2011.

SEB raised the GDP forecasts for all the Baltic countries on improved export outlooks.

"The worst seems to be over in the Baltic countries. Bottoming-out trends that we pointed out in our autumn reports strengthened during the winter. Export prospects have improved further, and Estonian membership of the eurozone in 2011 looks increasingly likely, which is boosting investments," said Mikael Johansson, Baltic and eastern European analyst at SEB Economic Research.

"Meanwhile there is some lingering uncertainty as to whether the three governments will have the stamina to fully implement their painful belt-tightening policies. This risk applies especially to Latvia, which is holding an election this coming autumn," Johansson said.

The restart of operation is due to recovery in demand for galvanized products in this area, a commentary obtained by BNS from Arcelormittal Group says.

"The overall market environment remains fragile and this restart will secure a correct customer service. Arcelormittal Tallinn production is targeting the Scandinavian, Baltic and Russian markets, with over 90 percent of the production going for export," Arcelormittal said.

Arcelormittal Tallinn is the only supplier of hot dip galvanized products of Arcelormittal Group in these markets.

The estimate concerning output for 2010 is dependent on market recovery but is to be lower than 2008, it said.

The standstill period was mainly used to perform improvements to the production line and warehouse area.

The plant at Muuga currently employs a work force of 80.

Production at the plant was halted in last spring and more than 100 people were left without work at the time.

(EUR 1 = EEK 15.65)