ANNUAL REPORT 2010 - Konkurentsiamet

FOREWORD
Dear Reader,
The year 2010 was the third year of activity for the new Competition Authority. The general
economic development in 2010 can be characterised by the preparation for adopting the
euro, the end of the economic depression and the first signs of economic recovery, but also
continually high unemployment and accelerating inflation.
Adopting the European single currency undoubtedly has a significant meaning. Besides being
the means of payment, the Estonian kroon was the symbol of our independence, freedom and
cultural self-awareness. It is a little sad that we can no longer keep banknotes with pictures of
our luminaries – Jakobson, Koidula, Tobias, Tammsaare, Hurt, Keres, Baer, Raud - in our
wallets. Nevertheless, I am still convinced that our cultural memory is strong enough and
important people from our history will not become less significant.
At the same time, adopting the euro and becoming a full member of the OECD are essential
for integration. Now we are in a position to state that the more than a century-old dream of
Mr Gustav Suits: “Let us remain Estonians, but let us also become Europeans!” has been
fulfilled. I am convinced that our national security is also more stable today than ever before.
Being a member of NATO, the EU as well as the OECD and having a global currency as the
means of payment raises the question as to what is next. It seems that we have accomplished
all and one may doubt if we have any destinations remaining. There is an answer to the last
question. We do have many high goals to follow – economic welfare, wealth, and higher
Human Development Index, just to name a few. Estonia is not among the wealthiest countries
in the EU, GDP per capita is remarkably lower than the EU´s average, and thus it is important
not to rest on your laurels, but keep on moving forward.
The Estonian Competition Authority plays a certain role in order to achieve previously
mentioned goals and to promote economic development and a better business environment.
Here we can review some critical subjects in 2010. Let us take the price increase of foodstuff as
an example. Estonia is a country with a small and open economy and the price increase on
world markets shortly carries over to our prices. That instantly raises a question if the state and
government have specific means for repressing price increases, and there are not very many
direct options. The turnover tax could be lowered, but that would only provide a short-term
effect, because it is not possible to cut it to zero and below that it would already be direct
subsidising. What the state can do is creating a better business environment. It means that
equal rules apply to all market participants, market barriers for possible new entrants have
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