Estonia, Export, Financial Services, Markets and Companies

Higher prices of state-owned Eesti Energia and Estonian Railways (Eesti Raudtee) make all saving plans pointless and prompt the question of devaluation, exporters said.

"We try to solve the situation by decreasing prices and salaries, but cutting the state budget and salaries seems pointless when the prices that have impact on the whole economy increase. If such infrastructure monopolies like Estonian Railways, Eesti Energia and Tallinna Vesi don't lower their prices to the 2006-2007 level, devaluating kroon will be inevitable by autumn," Tiit Vähi, the head of the Association of Large Businesses, said.

"We can't get our export on feet while our currency is more expensive than that of our neighbours. Estonian kroon must be untied from national flag, the national anthem and the coat of arms, and it should be viewed as a financial instrument – or we will end with bankruptcy," Fjodor Berman, the head of Balti Laevaremonditehas, pointed out.

The company started to lose orders in Norway after the krona of Norway devalued. Estonian production cost too much.

"Kroon should be devalued by 25-45%," Priit Maran, the member of Woodex' management board, said.

According to Maran, Estonian exports do not suffer from lack of demand, but the Estonian products are too expensive.