Comments concerning Estonia and Latvia

The big number of co-operative banks – the number of MUTURAL INSURERS, closely related bodies – in the small Estonian nation proves its former OMNI-PRESENCE and their STRONG REGIONAL or regional ROOTS.

The, comparatively, bigger number of Estonian co-op banks than those in Latvia might have the following explanations:
– The concentration process, due to the big economic crisis of the 30s of past century, was in Latvia more advanced than in Estonia.
– The Estonian co-op banks became general agents for official subsidies to steer the crisis. This kept also small bodies alive.

When comparing the existing in Estonia and in Latvia, resp., the following shows up:

It is surprising to observe the proximity with that, what in Germany existed and still exists. In both Baltic countries, there were agrarian, different trades and specific middle class groupings (e.g. house owners; textiles producers) serving mutal credit institutes, apart from muncipality banks.

This write-up demonstrates, convincingly, the still existing GAP inb the economic structure of the country which IMPEDES, not only a healthy DEVELOPMENT of the country but, at the same time, the EU PROGRESS.

An attempt to build co-operative or similar structures would NOT be a START FROM THE SCRATCH. Documentations which can be found in the national archives are useful tools. The old matierial is NOT OUT-DATED, as a comparison of that what is available in the region, with similarities in the West of the EU (especially in Germany), where that what got lost in the Baltic region, is still successfully practiced.

A fundamental quesition emerges which is crucial for a possible re-activation of co-op banks of the traditional type and which concerns their capitalisation (and, thus, their licensing under the banking rules):

Which is the legal status and fate of the REAL ESTATE VALUES left behind by the co-op banks which were closed at the beginning of WWII?

The question and a possible answer, in detail:

The institutions, when they were closed and when their representatives – where simply removed – or killed, or deported or when they fled, became unable to act.

But this does not mean that they were abolished. This would have required a legal (in the sense of the former and the actual legal environment) act.

That has never taken place. Therefore, the closed (legal) bodies continue to exist (formally). They could be re-activated with the help of appropriate legal instruments.

It seems that NO CONFISCATION took place, in combination with the closure of the institutions.

The occupation forces – erroneously – assumed that the respective real estate values had become ownerless.

This opinion was also sustained by those who followed them (after the political change) in the State powers.

During the war times and later, only new users could be installed but the property of the (old) owners was not touched.

Consequently, restitution demands brought forward (by newly elected representatives of those bodies) would have success before the courts.

Arrangements between them and the actual users or those who transferred use rights are of secondary importance.

Legal periods to present a restitution demand would not have been missed because no confiscation of real estate property had taken place.

It would be in the interest of a sound development of the national societies and the economies if the restitutions would happen in a joint and co-ordinated way.

That would not only favour success of the demands. At the same time, public interest could be supported.

It would be wise to channel the real estate property of the “old” co-op banks to a community development institution, e.g. (an autonomous and cittizens self-governed) trust.

The State organs should back this solution.

The KNOW-HOW in the hands of like-minded Western bodies can be made available without considerable financial sacrifice.

But it CANNOT be expected that Western “natural” partners will DO the RECONSTRUCTION TASK. (The hope for financial contributions is an illusion.) This is the JOB of the BALTIC CITIZENS.

The author tried to involve the two German lead institutions of the municipal (Sparkassen) and the “Landesbanks” (Deutscher Sparkassen- und Giroverband e.V., DSGV and the cooperative (Deutscher Genossenschafts- und Raiffeisenverband e.V, DGRV) groupings.

DSGV replied that the author should address DGRV as suitable partners. DGRV had not reacted, at all, what was, rightfully, interpreted as refusal.

This experience laeads to the assumption that both institutions are afraid to meet their past, i.e. their deep involvement in the Nazi regime and its rule over the Baltic countries and Poland, during WWII.


The NATIONAL FINANCIAL MARKETS OF THE BALTIC COUNTRIES will remain INCOMPLETE AND UNBALANCED, their civic societies will suffer, as much as also the whole of the EU and its citizens if not the traditional COUNTERWEIGHT to RESTRICT the dominance of the MERELY PROFIT SEEKING FINANCIAL BUSINESSES re-appears. This can only become effective with the help of WESTERN ‚NATURAL’ PARTNERS, i.e. German Savings Banks and financial services co-operatives.

Togetherness of the Baltic Countries

For more than one reason, he above identified task requires – ESSENTIALLY – CLOSE CO-OPERATION BETWEEN the Baltic countries, especially by the HEIRS OF LIVONIA, Latvia and Estonia. The inclusion of LITHUANIA IS DESIRABLE. Each of them is too small and too weakt to be attractive.

German Savings Banks Group

The (majority of the) German SAVINGS BANKS are PUBLIC LAW INSTITUTIONS WITH PUBLIC SERVICE COMMITMENT. This has to be EFFECTIVE FOR the WHOLE EU region. In spite of this, the members of this group (local or district Savings Banks and the LANDESBANKEN of the German States) operate as PROFIT MAXIMIZING BUSINESSES, beyond the German borders. This must not continue. On the contrary, they are BOUND TO BE HELPFUL to reach the aims of the matter. here under consideration.

German Co-operative Finance Institutions

The co-operation of the German CO-OPERATIVE GROUPINGS could be essential and, therefore, it would be highly WELCOME. But they are NOT OBLIGED to join. Participation would be in the INTEREST OF THEIR TARGET GROUPS because their customers could be attended, in the future, by like-minded financial services institutions.

After having tried, reiteratedly but in vain, to win the big German Cooperatives Association (Deutscher Genossenschafts- und Raiffeisenverband e.V. – DGRV) and the Federal Association of People´s and Raiffeisen Banks (Bundesverband der Volks- und Raiffeisenbanken e.V. – BVR which is a part of DGRV) and the German Federation of (territorial corporations linked) Savings Banks as partners for the task of reconstruction like-minded structures in the Baltic region, a smaller European organisation (and German members of the grouping) of ethically and environmentally oriented European web (GLS-Bank; Triodos Bank; Global Alliance for Banking on Values – GABV; Institute for Social Banking) has been addressed which reacted reluctantly.

Points which merit to be highlighted when comparing the developments of civic society self-help in Germany with that in the Baltic region:

When WWII started, at a time when in Germany, since long time, the National Socialists had adjusted the traditional bodies of autonomous economic self-help to their aims and objectives (especially the personnel of their bodies corporate and the members), the enterprises of this type continued to operate in the traditional spirit.

(A convincing example which demonstrates the difference to Germany, at that time: In Estonia co-operative banks of Jewish citizens an such of the German speaking, continued to offer their services.)

The war events have led to “deep-freezingh” of these bodies corporate. Now they can be “de-frosted” and re-activated – if courageous and forward looking citizens seize the opportunity.

Such rehabilitated institutions would – different from comparable bodies in Germany – not be infected by the perversions of the Nazi period – perversions which, at least partly, continue to remain effective, until our days.

A new beginning in the Baltic region would come closer to the original ideas, another difference to that what can be observed at presence in Germany.

This situation could lead to a welcome feed-back in Germany, aiming at re-orienting towards the basic ideas of this kind of institutions.

Perhaps, the fear of the German economic self-help bodies that this might happen, motivates their reluctance to assist the reconstruction of attitudes and structures of self-help economy in the Eastern EU countries.