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The Riigikogu heard the report of the President of Eesti Pank Vahur Kraft concerning the Annual Report of 2004 of Eesti Pank.

Mr. Kraft highlighted the economic growth of the previous year that was 6.2 per cent. Unlike feared or predicted, the accession to the European Union did not bring along a general increase in prices, the average price increase was 3 per cent, which is still higher than in 2003, but lower than the average of the last five years. The further price increase has been declining and the following years will bring an increase in consumer prices approximately by 2.7 per cent. The average gross salary increased by 7.8 per cent and real wages by 4.6 per cent. Adding the increase in the productivity of labour of 5.8 per cent during the same period, it may be said that unlike the year 2003, the increase in incomes and productivity was more balanced, Mr. Kraft stated. Last year a dynamic increase in loans continued in Estonia, regarding, first of all, households. ?The increase in loans needs still a constructive attitude of banks and loan debtors. Loan market is in the centre of the analysis of the Central Bank and in cooperation with the Financial Supervision Authority, our objective is to ensure that the risks would be equally estimated, ? the President of the Eesti Pank stressed. From the point of view of financial stability it is important that the conditions for loaning would not be relaxed in intense competitive activity. ?Or the appropriate self-financing rate and sufficient conservatism in estimating the future solvency of clients should be preserved, ? Mr. Kraft explained. In case of enterprises and households it is dangerous that in concurrence of the increase in the growth rate of incomes and the environment of low interests the possibilities of the increase in incomes in coming years will be overestimated in the present consumption decisions. ?Though there are no essential price pressures at the moment, it is more essential that in 2005 less-grounded increases in prices should be avoided, as concerns regulated prices,? Mr. Kraft gave a warning. The critical links of the further economic growth of Estonia are continuously the increase in productivity and the development of labour market. In shorter perspective the balanced budget is still essential and a possibly the most decisive role over regulated prices, the President of the Eesti Pank explained.

Chairman of the Management Board of the Financial Supervision Authority Andres Trink made a report concerning the Annual Report of 2004 of the Financial Supervision Authority.

The Riigikogu passed with 51 votes in favour the Act on the Accession to the United Nations Convention on the Law of the Sea of 10 December 1982 and its Agreement Relating to the Implementation of Part XI (618 SE), initiated by the Government of the Republic. In acceding to the Convention, Estonia will also become a member of the International Deep Sea Conservation Coalition. In acceding to the Convention, Estonia shows its belonging to the recognized sea states. A majority of the states all over the world and a greater part of our close neighbours (the Russian Federation, Latvia, Lithuania, Finland, Sweden, Denmark, Norway) have also acceded to the Convention. Estonia?s accession to the Convention gives an opportunity to solve the possible differences in opinions concerning the sea with other countries on the basis of the Convention. The convention is a very important international legal act.

The Riigikogu suspended the second reading of the Bill on Amendments to the Copyright Act (637 SE), initiated by Member of the Riigikogu Katrin Saks. The motion for suspension of deliberation was made by the Estonian Reform Party Faction. The result of voting: 36 votes in favour, 26 against.

The Riigikogu concluded the first reading of three Bills:

The Draft Resolution of the Riigikogu On Amendments to the Resolution of the Riigikogu On the Formation of the State Budget Control Committee of the Riigikogu (644 OE), presented by the Union for the Republic ? Res Publica Faction;

The Bill on Amendments to § 23 of the Surplus Stocks Charges Act (622 SE), initiated by Members of the Riigikogu Koit Prants, Janno Reiljan and Jüri Saar;

The Bill on Amendments to § 61 of the State Pension Insurance Act (651 SE), initiated by the Estonian Centre Party Faction, Estonian Reform Party Faction and Estonian People’s Union Faction.

The first reading of the Bill on Amendments to § 61 of the Parental Benefits Act (650 SE), initiated by the Estonian Centre Party Faction, Estonian Reform Party Faction and Estonian People’s Union Faction, was not concluded due to the end of the working hours of the sitting. The reading is resumed at tomorrow?s sitting.

The verbatim record of the Riigikogu sitting (in Estonian) can be found at: http://web.riigikogu.ee/ems/plsql/stenograms.form

The Riigikogu Press Service

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