Ladies and gentlemen,

I am glad to be at the Estonian-Czech business seminar.

This seminar aims at creating new mutually profitable business relations. They may be in the traditional branches of business - or in completely new ones. You have heard three presentations: one about the economic situation in Estonia, one about the business climate and tax system, especially about the new business-friendly changes, and one about the recent developments and future plans in our telecommunications and IT sector.

The governments of our two countries have created a business environment, which can only be described as favourable. We have had an agreement in trade and economic co-operation since 1994 already. The agreement in the promotion and mutual protection of investments and the convention on avoidance of double taxation of income and capital and on the prevention of tax evasion were also signed in the same year. The bilateral free trade agreement exists since 1998. Both governments have shown their interest in deepening the relations between our countries also through the increase of personnel in our diplomatic representation in Prague and by opening the Embassy of the Czech Republic in Estonia some weeks ago. All this should create the opportunities necessary for the business sector.

Let me remind you some basic facts about the economic reforms in Estonia:

First. Our constitution requires the Parliament to pass a balanced budget.

Second. Our monetary system is based on a currency board with 8:1 peg to Deutsche Mark.

Third. Estonia has one of the most liberal trade regimes in the world. Estonia has free trade agreements with the European Union, EFTA, and most of the former Soviet bloc. Estonia is a member of the World Trade Organisation. The free market for Estonian goods encompasses 600 million consumers.

Fourth. Estonia has a universal valued added tax, and a flat rate corporate and personal income tax at 26%.

Fifth. There are no restrictions set on foreign ownership of business, repatriation of profits or ownership of land. Over two-thirds of Estonian GDP comes from the private sector.

Both the Czech Republic and Estonia are moving towards the membership in the European Union. We are already there through foreign trade and investments: 75% of Estonia's foreign trade is related to the European Union, over 80% from all direct foreign investments into Estonia originate from European Union member states. The proportions in your foreign economic relations are exactly the same.

After the Russian crisis in 1998 our enterprises started to look for new markets in Central Europe, including, of course, the Czech Republic. During 1998 and 1999, Estonian export to the Czech Republic increased over 70% in both years. But we are still importing more from your country than we are able to export.

There are very few things in this world, which cannot be improved. The share of the Czech Republic in our foreign trade is unfortunately less than 1% and the volume of direct foreign investments in both directions is less than 1 million Deutsche Marks.

I hope you have found today's presentations informative and that during lunch time and the bilateral discussions this afternoon you will deepen the contacts even more. Hopefully new mutually profitable business will result from this meeting.

Thank you, ladies and gentlemen.

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