In the Baltic region, people save rather than spend
The discussion ‘Who is richest? The financial portrait of the Baltics’ focused on the ways that Estonians, Latvians and Lithuanians bank, and the nations’ view of money. The panel felt, anecdotally, that Baltic people as a whole were more likely to save for a long period of time than were, for example, Swedes, and the reason is partly due to the difference in the financial circumstances of the average working person in the Baltic and Nordic regions. Some people, panel members said, have even commented that Estonians deposit too much in the bank without using it.

“If you lose a job in Estonia, the social security system is not overly generous, so people need a big deposit for that reason. It’s the opposite in Sweden, where social security is more generous,” explained Kristjan Taimla, Director, Investment Funds at Swedbank. Perhaps another contributor to this is the relatively laissez-faire approach to employment law in Estonia, with job security lower than in Sweden, and protections so much less.

In any case, added Taimla, “the issue is not too much deposit, it’s that people start to save too late.” Pointing again to Sweden, he said that in his opinion it was normal for Swedish citizens to begin saving money for the future, in a deposit account, in their thirties. In Estonia, he said, “it’s more like [aged] 50 when they start doing that.” This, he continued, was because of the far lower average salary in Estonia.

Lack of capital might be stunting companies’ growth
On the topic of whether Baltic companies will ever have the wherewithal to expand and take over companies based in other countries, Vaidotas Sumskis, of the Bank of Lithuania, pointed out that the Lithuanian-owned Maxima group had already taken over a Swedish company. Taimla contended that the largest company on the Baltic Stock Exchange was Tallink, the Estonian ferry, taxi, and hotel company, but said more generally that the relative lack of equity capital available to Baltic companies meant that “in Estonia we’re pretty good at doing the opposite – selling our companies to foreigners!”

Questions over Estonian immigration laws
Riigikogu member Rainer Vakra took part in a debate with Latvian politician Juris Vilums, and three panellists who are active in youth politics in the Baltic region, ‘Baltic Countries: A disappearing nation?’ They were mulling over the hot-button issue of why people born in the Baltic region were choosing to leave for other countries such as Australia, the United States, and (at least until Brexit) the United Kingdom, while also taking advantage of their free movement rights within the European Union.

The debate, in some ways, was a contrast with the earlier one, in which budding entrepreneurs were being encouraged to think and act globally. Here, the onus was more on making sure the Baltics can develop and keep its own home-grown talent in the future. One of the other difficulties facing businesses, as articulated by Vakra, was the immigration quota set by the Estonian government, which some business leaders view as draconian.

“The migration quota was filled at the start of March [fact-check – according to ERR News it was April when the quota was filled]. What’s changed? Nothing, except now the workers in the construction industry are working here illegally. We’re lucky that, at least, the startup visa programme is happening,” Vakra said, referring to the programme that enables tech companies to recruit specialists from outside the EU for areas with an identified need.

Foreign investment not as easy as it could be
Vakra also pointed to what he felt was an unfriendly Estonian government attitude towards foreign investment when it came to small businesses started by non-EU citizens, which had led to a climate of what he felt was suspicion and conservatism in the banking sector. “Some people are now blaming e-Residents for the banks being too conservative,” he said.

This feeling has grown of late because banks are purportedly apprehensive about granting accounts to some users of the Estonian e-Residency programme, amid some account closures for entrepreneurs who fail to prove their link with Estonia to the liking of the bank. This thorny issue is explained further by ERR News, and the response from the e-Residency team was published in March.

Nor is returning to Estonia
Vakra linked this issue back to the core topic of the discussion. “Why should those people who have left come back if nobody’s welcome? It’s the mentality [that is the issue]. They [emigrants] went to those countries because they were welcome there.”

Mikk Tarros, Vice-Chairman of the Estonian National Youth Council, added a personal perspective, about his own family. “My mother lives in Switzerland. Perhaps we should try to entice her back to Estonia? She actually tried to come back a few years ago, but she couldn’t get any interviews because it was assumed that her salary expectations would be too high, even before she could state them.”