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Ceturtdiena 26.04.2018 | Name days: Rūsiņš, Sandris, Alīna
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BNN summary of the week: parties’ illegal donations, Rubesa’s future

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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; fight; decline; growth; criticism; opinion; injustice.

CHANGE: prices in stores have to reduce more rapidly

Current market analysis shows that certain retail traders have followed Maxima Latvia’s performed price decline at the beginning of the year by creating changes to prices of certain products. Still, higher activity is expected from industry players, company representatives say.

«Although previously we predicted a price decline of 15%, the current analysis shows that market players have responded slowly so far. As demonstrated by a number of studies, the price aspect is very important to Latvian residents. Rapid development of technologies and innovations, which goes hand in hand with efforts to make processes more efficient, allows us to make offers to fit their expectations. Perhaps other market players still have a lot of homework left to do,» says Maxima Latvia corporate relations department’s director Jānis Beseris.

Full article here

FIGHT: Lithuanian and Estonian prime ministers have no plans to discuss Rubesa’s future

Before Latvian Prime Minister Māris Kučinskis’ proposal, Lithuanian and Estonian prime ministers had no prior plans to discuss the future of RB Rail chairperson Baiba Rubesa after the vote in which their country’s shareholders voted in favour of her dismissal, as BNS was told by representatives of both officials.

«Nothing of the sort is planned at this time,» the agency was told by Estonian government’s representative Trīna Opi, answering the question as to whether or not Jüri Ratas has any plans to discuss this matter with his other Baltic colleagues. «As far as I know, they have yet to communicate on this matter,» she added.

Opi reminds that the three Baltic prime ministers have a meeting scheduled for 8th and 9th March in Vilnius. It is unknown, however, what they plan to discuss.

Lithuanian Prime Minister Saulius Skvernelis’ advisor Deivids Matuļonis told BNS that no extraordinary meeting of Baltic prime ministers is planned for the near future. Basically, he said, this matter is in the hands of the company.

Full article here

DECLINE: Corruption watchdog spots prohibited donations in Latvian political parties’ expenditures

After checking declarations and pre-election campaigns of political parties in Latvia, authorities have found no records regarding EUR 80,592 in election expenditures and EUR 37,857 in restricted donations, according to data from the Corruption Prevention and Combating Bureau (CPCB).

Last year, political parties spent a total of EUR 2.7 million in municipal election expenditures. Approximately half of this amount was spent on different advertisements. The largest expenses were for advertisements on radio, magazines, newspapers and other publications, as well as public locations.

19 parties and their associations stated false information in their declarations, avoiding declaration of finances worth EUR 80,592. The largest amount was ‘omitted’ by For Latvia’s Development – EUR 34,394.

Among the 19 parties in question are political forces like the Union of Greens and Farmers, Latvian Farmers Union, Latvian Green Party, Unity, Latvian Association of Regions, New Conservative party, Harmony, and the National Alliance.

CPCB has found that six parties accepted restricted donations from legal persons worth a total of EUR 37,857. Union of Greens and Farmers and the National Alliance are especially guilty of this. Those donations now have to be paid back to the state budget.

Full article here

GROWTH: Tax burden comparison in Baltics: Latvia remains in the lead

Although the massive tax reform has brought about considerable innovations in tax legislation, Latvia remains the country with the highest labour force tax burden among Baltic States, as concluded in a comparison performed by Swedbank’s Institute for Finances.

Latvia’s tax policy is neither employer nor employee friendly, as it creates the highest costs per worker among Baltic States.

What will 2018 bring taxpayers in Baltics?

Swedbank analysts say that 2018 has brought many changes to Latvia’s legislation. Because of that, employers and employees have a lot to ponder. In an attempt to reduce social inequality, minimum wages have been increased (from EUR 380 to EUR 430), non-taxable minimum application and calculation principle (from EUR 60 to EUR 115 last year and from 0 to 200 euros this year). This year has also seen introduction of a progressive PIT rate (from 23% to 20%, 23% or 31.4% depending on income). In accordance with changes brought about by the reform, benefits for dependents have been increased (from 175 euros to 200 euros), as have rates for state social insurance fees (from 10.5% to 11% for employees and from 23.59% to 24.09% for employers).

Tax changes have been noticed in Latvia’s neighbouring countries – Lithuania and Estonia. Compared with Latvia, similarly large changes have been registered in Estonia, whereas changed in Lithuania have been more moderate. For example, minimal wage in Lithuania has been increased by 20 euros (from 380 to 400 euros), whereas in Estonia the increase was 30 euros (from 470 euros to 500 euros). More considerable changes in Estonia are associated with a major increase of non-taxable minimum from 180 euros to 500 euros. Similarly to Latvia and Lithuania, it is differentiated based on income. In Lithuania, non-taxable minimum amount has grown and its maximum amount reaches 380 euros a month instead of 310 euros.

Full article here

CRITICISM: Minister criticizes state child care institutions’ funding system

It would be worth considering a change of funding models for child care institutions to make funding independent of the number of clients and prevent the interest  towards sending children from one institution to another based solely on available funding, says Latvian Welfare Minister Jānis Reirs in an interview to Rīta panorama on Thursday, 8 February.

The minister says that the least socially protected children in Latvia are subjected to a «carousel system». This system revolves around putting children in orphanages that receive state funding for each child. However, orphanages can send children away to boarding schools and still continue receiving funding. Boarding schools are also paid state funding. In addition, the boarding school, while being provided with funding for each child, can also send youngsters to psycho-neurological hospitals for treatment. The hospitals are also paid funding from Healthcare Ministry. With such a funding system, institutions are not motivated to do any actual work with children, rather just send them away and still receive money for them, the minister explains.

Full article here

OPINION: after euphoria from economic growth, countries should prepare for sudden drop

The global economy is pushing forward with confidence. Optimism is noticed in all countries considered to be the engines behind the global economy. This trend will create a positive vector in Latvia as well. We can expect a rise in wages, reduction of unemployment and growing export indexes in the near future.

However, it is highly important to prepare for an unavoidable period of economic decline, which always follows up periods of rapid economic growth, as concluded in SEB Bank’s latest Nordic Outlook.

«Last year, Baltic States demonstrated stable economic growth, which relied largely on good export results. This year’s GDP growth will continue at a healthy rate, largely thanks to active consumption and beneficial situation on export markets. The largest problem is associated with the tense situation with the labour market, which could limit potential growth. Latvia’s GDP outlook is 4.1% for 2018, whereas outlooks for Lithuania and Estonia are 3.2% and 3.5%, respectively,» says SEB Bank’s macroeconomic expert Dainis Gašpuitis.

«Although perspectives are positive for the next two years, it is important to consider preparations for the inevitable decline,» adds the economist.

Full article here

INJUSTICE: Riga Mayor refuses to comment on investigation regarding free Bi-2 concert

Chairman of Riga City Council Nils Ušakovs has decided not to comment on the investigation launched by Corruption Prevention and Combating Bureau (CPCB) regarding possible misuse of administrative resources on pre-election promotion, which took place before the last municipal elections when a free concert featuring famous Russian Bi-2 band was organized in Lucavsala, said the politician’s press-secretary Laila Ivāna.

The mayor was asked if he has been asked to come to CPCB to provide comments, and if he would be ready to pay back the money used on the concert if authorities find violations and decide that the money has to be paid back.

Ušakovs’ advisor emphasized that until CPCB has finished its inspection, he will not provide any comments.

As it is known, CPCB has commenced an administrative violation case in relation to the aforementioned concert. CPCB Political Organizations Funding Monitoring Office manager Amīlija Jaunskunga explains that investigators continue going through evidence and interviewing involved persons.

«Administrative responsibility for misuse of administrative resources is intended for persons who use state or municipal resources to finance pre-election promotion. We have commenced administrative cases against officials who made decisions on using administrative resources on pre-election promotion,» said Jaunskunga.

Full article here

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Economist: Latvia’s future depends on people’s patience; politicians mostly focus on near future

«People in Latvia currently live better than they ever have. Still, income level in Western Europe and elsewhere in the world will remain higher for some time.» Which predictions about banking sector’s operations have come true, and what is going on with ‘pained child’ – Latvia’s judicial system? Luminor Bank’s economist Pēteris Strautiņš explains in an interview to BNN.

FCMC chief: ABLV Bank’s closure was not the goal of FinCEN report

The report published in February by US Department of Treasury’s Financial Crimes Enforcement Network about ABLV Bank was not prepared with the goal in mind to close the bank, said chief of Latvia’s Finance and Capital Market Commission Pēters Putniņš at a public hearing organized by European Parliament’s TAX3 committee in Brussels.

Study: wages in Latvia grew more rapidly in 2017 than they did in previous years

As a result of economic growth and increasing labour force demand, remuneration level in Latvia in 2017 has reached the most rapid rate in the past several years. Average net wage in Latvia has increased by 6%, reaching EUR 894, according to results of a study performed by CV-Online Latvia.

Number of foreign travellers in Latvia up 53.2% in past seven years

In 2017, foreign travellers crossed the border of Latvia 7.7 million times, which is 13.7 % more than a year before. Last year, foreign travellers in Latvia spent EUR 691.9 million – EUR 46.7 million or 7.2 % more than in 2016.

Experts shocked about HIV patients’ reluctance to undergo treatment

The number of HIV patients that underwent treatment in Q1 2018 did not change in Latvia even though a considerable amount of funding was allocated from the state budget for HIV/AIDS treatment in 2018. This creates concerns about HIV patients’ use of healthcare services, according to Association HIV.LV.

Danske Bank to gradually cease servicing Baltic clients

In Baltic States, Danske Bank plans to focus solely on providing support to subsidiaries of Nordic clients, as well as global corporations with a considerable business portion in Nordic countries. Leaving private persons and local businesses servicing sector will be performed in a gradual manner, as reported by acting manager of Danske Bank’s Communication Office in Latvia Zane Strade.

Latvian Saeima establishes ban for banks to service shell companies

Banks registered in Latvia will no longer be allowed to work with shell companies and service their accounts. This is provided by amendments to the Law on the Prevention of Money Laundering and Terrorism Financing approved by the Saeima on Thursday, 26 April, as confirmed by the parliament’s press-service.

Ex-minister: Latvia’s biggest problem is the older generation of politicians

Older generation of politicians is Latvia’s largest problem. Some of those people are due for retirement. This is why the main objective for ‘Kustība Par!’ is involving a new generation of young and perspective politicians, says the party’s leader Daniels Pavļuts.

Danske Bank may announce its exit from Baltic States

Danske Bank Group’s office in Lithuania may announce on Thursday, 27 April, its plans to leave Lithuania and, possibly, the Baltic States, as BNS news agency’s Lithuanian branch was told by two sources.

«Oligarch talks» publication law put on hold; will fabricated «risks» impact UGF?

On Tuesday, 25 April, Saeima’s Legal Affairs Committee decided against putting up for a vote the legislative draft for the digitization and publication of the declassified portion of materials from the so-called oligarch talks criminal case.

OECD to perform independent audit of decisions made by Latvian supervisory services

Organisation for Economic Co-operation and Development plans to perform an independent audit of decisions made by the Finance Capital and Market Commission and Anti-money Laundering Service, as confirmed by Finance Minister Dana Reizniece-Ozola after a meeting of Finance Sector Development Council on 25 April.

Level of prices of agricultural products in Latvia grew 11.6% in 2017

The total price index of agricultural output in 2017 had increased by 11.6 %, which was mainly due to the rise in prices of livestock products of 25.8 %. The price index of crop products grew by 2.2 %.

51% of residents would not purchase goods production of which would pollute the environment

Environment-friendly lifestyle in Latvia, like elsewhere in the world, is becoming more popular every day. So-called green thinking also affects Latvian residents’ habits. 53% of Latvian residents prefer goods and services that help protect the environment, according to results of a study performed by AS Latvijas Zaļais punkts.

World Press Freedom index ranks Estonia highest among Baltic states

The French-based organisation Reporters Without Borders has published its 2018 World Press Freedom index, where Estonia has been ranked 12th and Latvia has been moved up by four positions to the 24th place.

Abu Meri: parliamentary investigative committee could help combat corruption in Riga City Council

«Nils Ušakovs’ policy in Riga is not only non-democratic but also allows for systematic corruption, which has become a tradition. If a week goes by with no scandal, it seems too long. Because of that, I consider forming a parliamentary investigative committee to study corruption in Riga City Council,» said Unity’s Saeima faction leader Hosams Abu Meri in an interview to BNN.

200 thousand Estonian e-mail passwords found leaked online

The global database of the illegally leaked passwords of tons of e-mail addresses contains passwords used by some 215 000 Estonian internet users.

Latvian EC Commissioner invites businesses to prepare for all Brexit scenarios

Businesses and supervisors should prepare for all possible Brexit scenarios, said Deputy Chairman of the European Commission on Financial Stability, Financial Services and Capital Market Union Valdis Dombrovskis participating in the ongoing finance forum City Week in the UK.

Latvia prepared to pay 4.8 million euros for participation in Expo 2020 in Dubai

Latvian government is prepared for participation in the international Expo 2020 in Dubai. Prime Minister Māris Kučinskis said after a meeting of the Cabinet of Ministers this Tuesday that it is planned to allocate EUR 4.8 million for this venture.

Spanish resort city to prohibit renting apartments to tourists

Palma, the Spanish resort city in the Mediterranean island of Majorca, has adopted a restriction that apartment will be not allowed to rent their apartments to travellers, becoming the first place in Spain to introduce such a ban.

Supreme Court of Justice views Kristovskis’ claim against Ventspils City Council

On 25 April, the Administrative Cases Department of the Supreme Court of Justice will be viewing two claims submitted by Ventspils City Council deputy Ģirts Valdis Kristovskis against the city council. «The fact that the case will be viewed verbally and that the defendants include Ventspils City Council, EPRDM and Association of Local Governments is considered unique and unprecedented in Latvia’s court practice,» says Kristovskis.

Messaging app Whatsapp not to be available to under-16s in EU

The smartphone messaging app Whatsapp plans to raise the minimum age limit to its European Union users from 13 to 16 years, as it is adjusting its rules of use to the upcoming EU data privacy regulations.

Saeima speaker in Tallinn: EU and NATO cooperation in defence should be enhanced

Close cooperation between European Union and NATO in defence is now more important than ever. This is especially true for cyber security and hybrid-thread prevention, said Latvian Saeima’s speaker Ināra Mūrniece during a meeting of EU member states parliaments in Tallinn on Tuesday, 24 April.

Ministry avoids going against supporting parties; Ventspils City Council’s violations reported to court

Environment Protection and Regional Development Ministry has no influence at all, and sometimes it seems it has no desire to exercise its rights and perform its duties. This situation most likely appeared because the institution is led by a minister who represents a specific political party.

Warfare in Ukraine escalates, soldiers wounded

In the Donbas War that continues for the fifth year in the Ukrainian regions of Luhansk and Donetsk, Russian hybrid forces have this week conducted a total of 44 attacks, wounding five soldiers, the Ukrainian military reports.

Demand for mortgage loans grew 53% in March

Increased demand for mortgage loans with state guarantees was observed in Latvia in March. Nearly every other loan application filed last month was intended for housing purchase using Altum guarantee. The largest amount of interest came from families with children, as reported by Citadele Bank.