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Friday 23.03.2018 | Name days: Mirdza, Žanete, Žanna

BNN summary of the week: oligarch mafia, dangerous products in EU, and what to expect from 2018

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUBNN offers a summary of this week’s topical news in a variety of categories: Change, Defence, Future, Business, Decline, Growth and Opinion.

CHANGE: Swedbank details five hottest economic trends this in 2017 and 2018

This year for the world and Latvia’s economy has been a year of unexpectedly rapid growth with positive influence on state budget, as well as wallets of businesses and residents alike. Latvia’s growth rate in Q3 2017 (5.8%) was more rapid than expected. Although growth will become slower with time, Latvia will experience a rather rapid economic growth next year. Chief economist of Swedbank Latvia Mārtiņš Kazāks mentions five of the most topical economic trends in 2017 and 2018.

2017 passed in Latvia under a sign of massive tax reforms. Changes have helped reduce the tax burden, especially for recipients of low income. In addition, all income will be applied with a single basic tax rate, Kazāks said.

«Changes to corporate income tax have to parts: cancellation of advance payments and no more application of corporate income tax on undivided profits. The first will assist businesses during times of crisis and the second will hopefully motivate people to legalize their actual financial flow. In general, the tax reform promises to go in the right direction. Risks, however, are associated with proper application and the amount of bureaucracy involved. The government should learn to speak more clearly – one of the biggest problems is controversial and ambiguous communication,» the economist said.

Full article here

DEFENCE: Estonia’s territory cannot by occupied in matter of days, notes army chief of staff

Estonia’s territory cannot be captured by a foreign power in the matter of days, although certain areas of the country could be occupied in such a short time, evaluated the chief of staff of the Estonian Defence Forces.

In an interview with the Estonian public broadcaster ERR on Wednesday, January 3, Brigadier General Martin Herem explained that the EDF is able to send 21,000 troops into battle describing this as the so-called responsible number, namely such amount of soldiers could be given the necessary weapons and ammunition to push back a military attack.

«If we can arm these 21,000 men, we can manage against quite a few things by ourselves. Estonia can’t be occupied within days. It’s possible that some areas may be taken, but the question then is, whether the enemy really wants to go ahead if they face 21,000 men,» Herem continued.

Full article here

FUTURE: FinTech outlook for 2018 – mobile payments will become an everyday occurrence

It is likely that we will pay for coffee or theatre ticket using our mobile phones, and everyday purchases will be made using near-field communication (NFC) cards, Ferratum Bank explains about the close future of finance technologies.

Payments covered using mobile phones

Tap and go service is already well-known around the world. This is why it is expected that more and more people will start using it in Latvia next year, Ferratum Bank representatives say.

The company explains that this applies to payments with a value between 10 to 20 euros. All that is needed is a mobile app that allows transferring money with a simple text message. Mobile payments allow users to pay a restaurant bill, purchase a theatre ticket and shop in Riga and elsewhere in the world with one tap on the screen of their phone.

Small purchases without PIN code

The company also predicts that there will be an increase with the number of people that appreciate the advantages provided by NFC cards. Representatives say that such cards allow for a quick and simple transaction process – merely by bringing the card close to the terminal, without the two even touching. The main advantage is that it is possible to make purchases under EUR 10 without having to input the PIN code.

Full article here

BUSINESS: KVV Liepājas metalurgs’ potential investor given two weeks to consider purchase

The potential investor of insolvent KVV Liepājas metalurgs is given two weeks to consider purchasing the company, says Latvian Economy Minister Arvils Ašeradens.

He admits that talks with the potential investor are not over; the investor wants to secure the most beneficial conditions in business negotiations. Latvian government is also highly interested in getting back the money it has invested in saving the company, even though it is clear that it will be impossible to recover the entire amount.

«The government won’t get all of its money back. A specific amount will be voiced once an agreement has been reached,» said the minister.

According to him, the government will wait for the potential investor’s decision for two more weeks. During this time the investor will have to submit guarantees and transfer finances to accounts of KVV Liepājas metalurgs’ creditors. If this is not done in two weeks, the government will consider selling the company in separate parts.

The minister also said that several potential investors have expressed an interest in purchasing KVV Liepājas metalurgs. «The investor in question is the only one with whom active talks are underway. Still, other investors have expressed an interest in KVV Liepājas metalurgs as well. However, we have yet to commence active talks with them,» added Ašeradens.

Full article here

DECLINE: 156 products dangerous to human health were noted on the EU market last year

According to data compiled by the Health Inspectorate, 156 types of products dangerous to human health were found on the European Union market in 2016.

As explained by the inspectorate, the Rapid Information Exchange System regularly receives information regarding potentially dangerous products. Actions are taken to prevent those products from entering Latvia’s market.

For example, there were reports of ten such products in December. Following a report from Germany, an Austrian skin care product was called off. France reported about a German-made cosmetics removal product. After a report from Slovakia, a Chinese-made glue and Greek spray paint were pulled from store shelves.

Estonia had also reported on another dangerous product in December – an Italian hand cream.

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GROWTH: Minimum wage in Latvia reaches EUR 430 in 2018

Starting with 1 January 2018, the minimal wage in Latvia will be EUR 430, which is EUR 50 higher than it was the year before. This is provided by amendments approved by the Cabinet of Ministers in regards to minimum monthly wage amount for standard work time and calculation of the minimal hourly rate.

Previously, Welfare Ministry noted that raising minimal monthly wages will increase employers’ costs. This includes the increase of tax payments from employees’ wages at EUR 430 to social insurance fees of EUR 13.95 and additional labour costs – by EUR 50.

Labour force costs will only increase for employees whose previous minimal wage or wage was below the minimum detailed in the tax reform. Employees whose wage will grow from EUR 380 to EUR 430 will gain an additional amount of EUR 57.83.

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OPINION: Inguna Sudraba’s «dirty tricks» prove our voters are not gullible

«When then the President of Latvia Valdis Zatlers dissolved the 10th Saeima, which was infested with oligarchs, it was a chance to get away from a state administration controlled by a handful of influential people. In 2014, Inguna Sudraba, who served as State Auditor at the time, had a very good rating in Saeima elections to form the government. However, thanks to the timely leak of information regarding her trip to Moscow, which she denies to this day, and her ties with people close to the Kremlin, voters had enough to make their conclusions. And although Sudraba’s party made it to the Saeima, it does not have any serious representation. This proves that our voters are not gullible,» said chairperson of Saeima’s European Affairs Committee and member of ‘Kustība Par!’ Lolita Čigāne in an interview to BNN.

Oligarch talks swept under the rug or «mumblings of old men»

Čigāne says that attempts to sweep Oligarch talks under the rug and declare them as nothing more than ‘mumblings of old men’ continue in Latvia. According to her, people like Andris Ameriks, Jānis Dūklavs and Aivars Lembergs must not be allowed to work in politics anymore. «They have to carry responsibility for those talks.»

The politician says that Oligarch talks mentioned ways of buying the media in the country. «Lembergs, for example, has an entire network of media that attack everyone who criticizes his actions. They also take the time to praise him and his associates.»

One of the most major problems, according to Čigāne, is that people continue voting for those politicians. According to her, there is a lot of information to take in, and it is difficult for residents to focus and form their opinions. «The goal for oligarchs is to muddy the water and say they aren’t clean, but neither is anyone else; we aren’t honest, but neither is anyone else».

About judicial power, Čigāne said that Lembergs has been involved in different court processes a long time and has become very good at stalling. «We have to be insistent enough to make sure the truth is revealed. We should become more intolerant of such situations – when a person robs the country and hatefully declares his intention to sell it. On top of it all, he dresses in extravagant clothes bough, possibly, using part of the stolen money. Now he sits and sneers at us.»

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Harmony believes education only in Latvian language is discrimination

Members of Harmony’s Saeima faction have turned to President of Latvia Raimonds Vējonis with a request to halt the parliament’s newly approved amendments to the General Education Law and Education Law regarding education only in Latvian language.

Opinion: UFG and For Latvia and Ventspils were in favour of Vejonis congratulating Putin

Latvia’s President Raimonds Vējonis sent his congratulation to the newly-elected President of Russia Vladimir Putin in order to secure political capital for himself during next year’s presidential elections, says Assoc. Prof. Ojārs Skudra from Social Sciences Faculty of the University of Latvia.

Commissioner: Latvia should provide a clear response to situation in its financial sector

The scandal in Latvia’s financial sector has been reported far and wide in the European Union. This is why it is highly important for Latvia to provide a clear reaction to all this, said Vice-President of the European Commission for Financial Stability, Financial Services and Capital Market Union Valdis Dombrovskis.

Don't joke about bombs at Tallinn Airport, they take it seriously

Estonia's largest airport in Tallinn has from early 2017 received 14 threats of the presence of explosives in the air-travel hub, most of which have been discovered to be just jokes said at the wrong place.

Minister: learning in a single education system using state language is only obvious

Education using state language is our way of ensuring sustainable development of our nation, says Latvia’s Education and Science Minister Kārlis Šadurskis.

Estonian banks close foreigner accounts in wake of ABLV closure

In the wake of the closure of ABLV Bank in Latvia and alleged money laundering via the Estonian branch of Danske Bank, lenders in Estonia are closing the accounts of foreigners, but this threatens the country's successful e-Residency programme aimed at attracting foreign investors.

Latvian Saeima conceptually supports limiting the Bank of Latvia governor’s authority

The Saeima has supported amendments to the Law on the Bank of Latvia in the first reading. Amendments provide that the term of the bank’s governor, his deputy and council members will be five years, as reported by Saeima’s press-service.

Baltic shareholders agree to keep Baiba Rubesa in charge of RB Rail

RB Rail CEO and board chairperson Baiba Rubesa will keep her post. This was decided by shareholders during the 22 March meeting. «The supervisory council had previously mentioned the CEO’s contribution to the company’s development. Still, we intend to find solutions and continue realizing Rail Baltica project,» said RB Rail Supervisory Council chairperson Riia Sillave.

Syrian rebel groups in eastern Ghouta announce ceasefire

In the besieged eastern Ghouta territory in Syria, which has been under heavy air strikes and artillery fire for about a month, several opposition rebel groups have agreed to ceasefire.

EU member states on Skripal attack: «Highly likely» Russia was responsible

The European Union has stated it would recall its ambassador to Moscow for consultations after heads of member states and their governments agreed it was very likely that Russia was responsible for the attack with a chemical weapon on a Russian-British double agent.

Weather to remain cold in Latvia until Easter; more snowfall expected

Weather in Latvia is expected to become cold again after a brief period of warmth. Air temperature will drop again at the beginning and the middle of next week; some areas may experience frost again, as reported by Latvian State, Environment, Geology and Meteorology Centre.

Farmers in Latvia dissatisfied with resolution of electricity-related problems

Two months have passed since farmers in Latvia had received unjustifiably large electricity bills. Countless meetings and discussions have taken place in those two months. Unfortunately, no decisive measures have been undertaken to resolve the problem. Farmers are confused with decision-makers’ incisiveness in a matter important to the national economy, as noted by the Farmers’ Saeima.

Life after 25 May: is this the end for free publication of photo galleries from events?

Many of us like to check out photos from concerts, conferences or sport events on gallery portals and social networks to have a look at guests of those events. However, after 25 May, when General Data Protection Regulation (GDPR) comes into force, the situation will no longer be the same.

Saeima to establish legal framework for Baltic cooperation in disaster prevention

On Thursday, 22 March, Latvian Saeima supported a legislative draft, ratification of which will help create legal framework with other Baltic States in prevention of disasters, as reported by the parliament’s press-service.

Number of complaints with postal services on a rise in Latvia

Public Utilities Commission has compiled information about complaints submitted by residents in regards to postal services in 2017. The number of complaints has increased alongside opposing views about package terminals – the regulator has received 37 complaints in total.

Output of livestock products in Latvia increased in 2017

Compared to 2016, output of meat grew by 4.6 % and output of milk by 1.4 % in 2017. In 2017, in Latvia 91.2 thousand tonnes of meat were produced, which is 4.0 thousand tonnes or 4.6 % more than in 2016. The most significant increase was observed in the output of poultry (of 11.3 %) and pork (4.7 %).

Turkey's offensive in Syria condemned by NATO ally Germany

Angela Merkel, the head of the German federal government has stated that Turkey’s military offensive in the northern Syrian town of Afrin was unacceptable and she blamed Russia for simply watching, while attacks by Syrian government forces on besieged eastern Ghouta continue.

Finance minister still believes tax reform in Latvia has brought results

«The tax reform has given us the results we had expected, especially in regards to combating envelope wages,» said Latvia’s Finance Minister Dana Reizniece-Ozola in an interview to 900 seconds programme of LNT.

Planned hospital reorganisation in Lithuanian regions irks both mayors and patients

If the plan of the Lithuanian Ministry of Health to overhaul treatment services in the provinces does not hit a snag, the rural hospitals will be soon providing only essential care and nursing, the focus will be on out-patient care and treatment will be available only in larger county hospitals.

Ventspils beach high in popularity this week; Lembergs gets spotlight time as well

Ventspils ended up in the spotlight in an unusual way this week: seals washed up on the beach there. Animal Freedom emphasizes that human contact with baby seals would hurt them. Residents are asked to maintain at least 50 m distance from them. However, the suspended Mayor of Ventspils Aivars Lembergs decided to take photos with baby seals and publish them on his Facebook profile.

Ombudsman: problems in nursing homes and social care centres are associated with lack of funding

Problems in nursing homes and social care centres are largely associated with lack of funding, because it is not possible to perform high-quality work using currently available resources. This is the responsibility of ministries and the government, as ombudsman Juris Jansons mentioned in an interview to Latvijas Radio.

Estonian music authors receive record royalties for 2017

The organisation, which is tasked by collecting royalties for local and foreign music in Estonia, the Estonian Authors' Society, has received six million euros in royalties in 2017, which is its record level.

Facebook sorry for permitting exploitation of 50 million user data in politics

Facebook CEO Mark Zuckerberg has apologised for the social network failing to ensure enough privacy to its users that allowed for data on about 50 million of its users to abused by a political consultancy firm.

Zhdanok’s replacement to promote non-citizen matter in European Parliament

Miroslavs Mitrofanovs, who has taken Tatyana Zhdanok’s place in the European Parliament, plans to promote the matter of non-citizens in the institution.

Riga City Council committee supports increasing municipalities’ expenditures by 42.38 mln euro

Following an initiative from the Financial Department, the outlook for the municipality’s base budget revenue has been increased by EUR 1.66 million for 2018. The expenditures portion of the budget is planned to be increased by EUR 42.377 million, as reported by Riga City Council.