Estonia average wage drops for first time since 1993

Estonia average wage drops for first time since 1993Tallinn - The extent of the economic problems in the Baltic state of Estonia was made even clearer Monday when official data recorded the first drop in wages since 1993.

According to Statistics Estonia, in the first quarter of 2009, the average monthly gross wage dipped by 1.5 per cent to 12,147 kroons (1,085 dollars), compared to the first quarter of 2008.

The last time a quarterly wage drop was recorded was 1993, when the tiny nation of 1.3 million was still fighting to rebuild itself after winning its independence from the Soviet Union in 1991.

Adjusted for inflation, the figures were even worse.

"In the 1st quarter of 2009 real wages decreased by 4.5 per cent," said Statistics Estonia.

After a decade-long boom, Estonia became the first country in the European Union to slip into recession in 2008. In the first quarter of 2009, the economy contracted by 15 per cent year-on-year.

The International Monetary Fund warned recently that the state budget required "fundamental rebalancing."

A supplementary budget drawn up by the government of Prime Minister Andrus Ansip aims to save around 3.4 billion kroons (300 million dollars) of state money, with further cuts promised.

Disagreements over how best to slash expenditure led to the collapse of the three-party ruling coalition on May 21, leaving Ansip in charge of a minority administration but refusing to resign.

The opposition People's Union party was due to meet Monday to discuss whether it would be willing to join Ansip's Reform Party and its coalition partner Pro Patria/Res Publica Union in government.(dpa)