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Friday 19.01.2018 | Name days: Alnis, Andulis
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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.

Full article here

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.

Full article here

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.»

Full article here

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Minister promises bigger wages for working people and support for country’s industry

«Latvian Economy Ministry’s priorities for 2018 include increasing wages for working people and providing support to the country’s industry. For Latvia’s centenary year, every resident should have the right to experience the increase of the personal and state welfare,» promises Economy Minister Arvils Ašeradens.

Latvenergo: electricity price has declined 30% in the past three years

Average electricity price in Latvia has declined in recent years. The average price of electricity has declined by 30% at Nord Pool exchange between 2014 and 2017, allowing end user costs to decline, says Latvenergo.

Alcohol sellers in Estonia to be checked by little «police»

To find shop assistants illegally selling alcohol or tobacco to minors, Estonian police introduces the method of sending minors as police aides to retail shops to try to purchase the products banned to them.

EY study: cyber security has become a priority to banks this year

Over the course of the year, priorities of banks around the world have switched from reputation and risk management to data security matters, as concluded in the latest EY Global Banking Outlook 2018.

Political association: UGF and Harmony are covering up state capture

«Parliamentary investigation of Oligarchs case has shown what is what in the Saeima of the Republic of Latvia. Green farmers are in full harmony, covering up Aivars Lembergs and the fact of state capture. They and Inguna Sudraba have made the parliamentary investigation into a farce. Unfortunately, the power in those people’s hands is no farce – rather misfortune for all of Latvia. I hope citizens will take all that into account when they go voting,» says leader of Kustība Par! Daniels Pavļuts.

Tallinn-Helsinki tunnel plan lacks ambition, says «Angry Birds» game maker

While Finland and Estonia work on plans of an under-sea tunnel from Tallinn to Helsinki, the construction of which could start in the 2030s, a Finnish businessman, previously involved in development of Angy Birds video game, has presented plans to finish the massive construction project in 2024 already.

Experts: healthcare financing law will deny healthcare to the least protected

In a discussion regarding healthcare, experts said that Latvian President Raimonds Vējoņis’ proposed Healthcare Financing Law is economically unjustified and ineffective. The document lacks principles of a socially responsible state, because healthcare is becoming less accessible, which will likely worsen public health indexes, says Kustība Par! political party.

Branded «aggressor state», Russia says Ukraine buries Minsk peace agreements

As the Donbas War continues, the parliament of Ukraine has passed the so-called Donbas reintegration bill after three days of debates defining territories controlled by pro-Russian separatists in the east of the country as temporarily occupied by Russia.

Weather to remain winter-like in Latvia during the weekend and next week

On Friday and Saturday, no major increase of snow is expected. Air temperature will increase slightly, but colder masses of air will slow into the country on Sunday, as reported by Latvian State Environment, Geology and Meteorology Centre.

Winter storm in Netherlands and Germany turns tragic

A powerful winter storm in western and central Europe has claimed the lives of eight people.

Lithuanian bishops: skipping fasting on February 16 this year is not a sin

In an unprecedented move, the Conference of Lithuanian Bishops, the governing body of the Lithuanian Catholic Church, said that meat dishes okay for the people of faith on February 16, which marks the 100-year anniversary of Lithuania's statehood and the Lent Friday, which is traditionally a day of fasting for religious Catholic people.

Coincidence? Votes from Harmony and UGF ensure Sudraba remains the head of Oligarchs case committee

On Thursday, 18 January, the majority of Saeima members voted against the proposal to dismiss Inguna Sudraba from the post of the head of parliamentary investigative committee in charge of the review of the infamous Oligarchs case.

Kaljulaid criticised over involvement of acclaimed, but unrestrained director in centennial reception

As Estonia readies for the presidential reception to honour the 100th anniversary of Estonia, its President Kersti Kaljulaid is being criticised in an open letter for trusting Tallinn’s NO99 theatre, whose director physically assaulted a female colleague.

22.1% of Latvia’s residents subjected to risk of poverty

In 2017, 425 thousand persons or 22.1 % of Latvia population were at risk of poverty in 2016 – 0.3 percentage points less than in 2015. Equivalent income of this part of the population were below 330 euros monthly.

LAAC: Latvia’s milk market can be sorted out by joining forces in exports

Latvian Association of Agricultural Cooperatives (LAAC) has received support and praise for the public discussion regarding rapid milk procurement price changes, which is something that has recently affected the majority of agricultural cooperatives. This has helped cooperatives band together in order to sort out the milk market. This idea came from the example set by grain producer cooperatives, which did the same thing fifteen years ago, as reported by the association’s representatives.

Forevers announces its decision to exit from Latvian Federation of Food Companies

Forevers meat processing company has decided to exit from Latvian Federation of Food Companies (LFFC). The contract between two parties will be terminated in January.

Saeima’s Oligarchs case investigative committee hastily approves final report

In spite of objections, grammatical errors, criticisms about lacking effort, as well as Inguna Sudraba’s unfit status to lead the committee, members decided to move the meeting from 11:00 to 08:00 and approve the final report in a rushed vote.

Removal of 1 and 2 euro cent coins from circulation suggested by Bank of Estonia

Estonian central bank is willing to follow the eurozone trend of limiting the circulation of euro 1-cent and 2-cent coins and in time to remove them entirely from circulation in the Baltic country.

Cert.lv: attacks on e-health system and LETA were likely ordered

Attacks on e-health system and LETA agency were likely ordered, said Cert.lv deputy manager Varis Teivāns in an interview to Rīta Panorāma programme of LTV.

As Catalan parliament reconvenes, it elects pro-independence speaker

The Catalan regional parliament has in its first sitting since its ousting and snap December election elected a separatist-minded politician as its Chairman, which indicates that the attempts to break the region away from Spain would continue.

Latvia’s National Armed forces receive new Harris tactical radio equipment

In 2017, Latvia received tactical military radios worth USD 10.5 million from American Harris Corporation. Procurement of radio equipment will further improve command function and help develop a lasting communication system with other NATO member states, as reported by Latvian Defence Ministry.

MEP: Europe continues strengthening its energy independence

«The European Parliament has voiced strong support towards Europe’s energy independence and moving its energy policy away from Russia’s monopoly by investing in energy efficiency and renewable energy resources,» said MEP Krišjānis Kariņš after the vote on Clean Energy Act’s first reading in Strasbourg.

Apple expected to pay additional 38 billion USD in taxes for money kept abroad

Motivated by the U.S. tax reform, Apple will pay about 38 billion U.S. dollars (31 billion euros) in tax on the roughly 250 billion dollars (204 billion euros) the computer technology firm keeps outside of its country of origin as it plans to focus more on its contribution to the American economy.

Latvian police commenced three criminal processes for contraband of drugs this year

In the first two weeks of 2018, State Revenue Service’s Customs Police commenced three criminal processes in regards to illegal drugs contraband in postal packages from Lithuania to Latvia.

Betsafe: To Latvia from the Heart has laughable chance of entering next Saeima

With declining ratings, Inguna Sudraba’s party To Latvia from The Heart has been left with laughable chances of entering the next Saeima, Betsafe bookmakers say.

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