Tallinn - The Estonian economy contracted by nearly one- tenth in the final quarter of 2008, according to a provisional estimate released Friday by the small Baltic state's official statistics bureau, Eesti Statistika.

"Gross domestic product (GDP) decreased by 9.4 per cent in Estonia in the 4th quarter of 2008 compared to the same quarter in the previous year," Eesti Statistika said.

The news confirmed that the Estonian economy shrank for three consecutive quarters after the former "Baltic Tiger" became the European Union's first member state to slip into recession in 2008.

Tallinn - The ruling coalition in Estonia is set for a make-or-break vote in parliament after it reached agreement on a money-saving amended budget in the early hours of Thursday morning.

The plan includes cost-cutting measures that would slash 8 billion kroons (685 million dollars) from state expenses.

Controversial measures include an across-the-board reduction of 10 per cent in public sector wages which would save an estimated 2 billion kroons (171 million dollars) and a provision to raise pensions by 5 per cent from April.

Tallinn - The Estonian central bank denied press reports Friday that it had despatched a senior figure abroad to damp down rumours about the devaluation of the national currency, the kroon.

Daily newspaper Postimees reported that Jaan Mannik, chairman of the central bank's supervisory board, had gone to Sweden in a bid to calm jittery foreign investors.

Tallinn - The prime ministers of Estonia and Lithuania met Tuesday in the Estonian capital, Tallinn, to wrestle with the Baltic states' "energy island" status within the European Union.

The electricity systems bequeathed to the Baltics by the 50 years of Soviet occupation which ended in 1991 have hindered attempts at full energy integration.

Currently, a cable from Estonia to Finland called Estlink is the only major connection joining the Baltics to the Nordic grid, with a further link, Estlink 2, in the advanced planning stage.

Riga- The medium-term prospects for the economies of Latvia, Lithuania and Estonia are the worst in the European Union, according to a European Commission report released Monday.

Formerly known as the "Baltic Tigers" for their dynamic rates of GDP growth and ability to attract investment, all three countries are now little more than mewling pussycats if the downbeat EC economic survey is to be believed.

Latvia looks in the worst shape of the 27 EU member states with GDP set to contract 6.9 per cent in 2009 and a further 2.4 per cent in 2010.

Tallinn - Herman Simm, a senior Estonian intelligence official awaiting trial on treason charges for allegedly spying for Russia, may have started selling his secrets in the mid-1990s, according to media reports Thursday.

Speaking in daily newspaper Eesti Paevaleht, the former commander of the Estonian defence forces, Johannes Kert, said he suspected Simm had set out to discredit him at that time.

"A rumour was leaked to Finland that I, as the then-commander of the Estonian defence forces, could not be trusted," Kert claimed.