bnn.lv Latviski   bnn-news.com English   bnn-news.ru По-русски
Ceturtdiena 22.02.2018 | Name days: Rigonda, Adrians, Ārija
LatviaLatvia

Economic Diary. Big money give-away season

FaceBook
Twitter
Draugiem
print
(No Ratings Yet)

Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RU9 areas of high priority are planned to be funded as part of the European equality policy in the next 7 years in Latvia. Among those directions are the initiatives to develop small and medium business, technology, environmental protection, employment and other important aspects. The list has been compiled in a form of an official document. This documents has been submitted for review by state secretaries.

Enough for everyone

All European funds that are involved in equalisation policy will allocate EUR 4.4 billion for Latvia throughout 2014-2020. The Finance Ministry sent a report to the state secretaries last week. The plan includes activities that will be funded by this money. 29.5% of the amount (LVL 1.35 billion) is proposed to be used for long-term transport development. This includes the development of Riga International airport, the development of port and railway infrastructure and maintenance of state roads.

Another important development direction is the support of small and medium businesses. Raising the competitiveness of businesses is a direction for development in its own right. A total of EUR 368.94 million is planned to be allocated for this. Municipalities will be allocated EUR 252.28 million for the following goals: 800 ha of reconstructed or created industrial areas, 9,000 preserved or created jobs, dozens of attracted private investors.

The Finance Ministry had previously sent the same list of priorities to the European Commission. This was done unofficially, so that all conflicting matters would be resolved when it is time to sign official agreements with Brussels. There are, of course, conflicting matters: the EU authorities believe Latvia should reduce the share planned to be allocated for roads and allocate more money for other priorities.

How to compensate losses?

Latvia seems to give with one hand and take with the other one. The head of the Finance Ministry Andris Vilks mentioned this week that the question regarding the possibility of increasing VAT could be discussed again. The minister’s idea is simple: if we stick to the notion that PIT should be 20% and social insurance fees are to be reduced, this reduction of revenue should be compensated somehow. The ministry believes this compensation will be provided at the expense of the reduction of the shadow economy. Nevertheless, this does not mean VAT will be increased in 2014. The minister believes this issue should be discussed as part of budget planning for 2015.

VAT has been changed many times throughout the history of modern Latvia. The rate of this tax was recalculated four times in the second half of the 2000s.

Paying the debts of others

It should be said, however, that the state of Latvia is prepared for sacrifices as well. But not for all. For many the news about Latvia paying the debt of Liepājas metalurgs (LVL 47.414 million) to the Italian UniCredit S.p.A. came as a shock. Why should the state pay the debts of a private company? And why aren’t other entrepreneurs eligible for this kind of support?

The Latvian Cabinet of Ministers reviewed the report regarding the state of Liepājas metalurgs this week. Karlis Krasting, consultant of Prudentia, told the government that the plant is likely to function with profit in the near future. LM will require funds for the first two months, however. As soon as the solvency restoration plan is complete, it will be known who will provide the money.

Everything indicates that the future of LM depends on the creditors’ decisions, not shareholders. The Finance Ministry hopes that a good and sustainable plan for legal defence will allow the company to restore function and reach an agreement regarding the payment of debts.

As for the co-owners of the plant, they continue to gradually lose control over the enterprise. The largest shareholder of LM Sergei Zakharin (49%) was not re-elected into the council this week. Guntis Vilnitis was elected in his place. Ilya Segal (21.03%) has left the Board of LM altogether. The State Police had previously prohibited Zakharin and Segal to take managing positions in LM due to the criminal proceedings initiated against them. Kirov Lipman (23.47%) has decided to leave the newly elected council because the last meeting was held without him.

Meanwhile, ex-finance minister Einars Repse claims the state has a good chance of getting out of the whole Liepaja situation with profits. He believes the money is not lost. All that needs to be done is take over the plant, reorganize it and sell to some investor. As simple as that.

Ref: 017.109.109.8429


Leave a reply

  1. Ilmars says:

    Re : Big Money Give Away Season
    As the eurozone goes down the economic gurgler ,and European citizens get pissed off with incompetent management , then we can expect more bullshit stories like this .Instead of public relations stunts like this , they would be better off sacking the head of the ECB , stopping the inflation first policies , and adopt the policies of the Americans that have proven to lower unemployment and improve the economy .

    Thumb up 0 Thumb down 0

    • Anonymous says:

      Yeah, no thanks. The last time American policies reduced unemployment and improved the country’s economy was during World War II. I think we all know the means by which the American government implemented these improvements…no thanks

      Thumb up 0 Thumb down 0

  2. Ilmars says:

    The last time American policies dropped unemployment is like right now. In the last 3 years , since the global financial crisis , the American unemployment rate has dropped from over 10% to 7.4% this month . In the same period , the eurozone unemployment rate has gone up from 8% to over 12% , including a disgraceful 40% youth unemployment rate. Go figure.

    Thumb up 0 Thumb down 0

Defence expenditures in Latvia planned at EUR 234 million in 2018

Latvian government plans to spend EUR 234 million on defence projects, including procurement of transports, ammunition, armaments and individual equipment, in 2018 as confirmed by Defence Ministry.

Ministry cancels mandatory procurement component permits for five CHP plants

Latvia’s Economy Ministry has made a decision to cancel the permit to sell electricity within mandatory procurement component for five other renewable energy co-generation plants plants: SIA Madonas Eko, SIA Eiro-Āzijas investment agency, SIA EVOKEM, SIA M Parks, and SIA Eco Latvis.

NSC proposes Maizītis for a second term as Chief of Constitution Protection Bureau

Members of Latvia’s National Security Council have decided to propose the current head of the Constitution Protection Bureau Jānis Maizītis for another term at the helm of this institution, as BNN was informed by the State President’s Chancellery.

Latvijas gāze’s subsidiary Gaso proposes reducing gas transmission price

Latvijas gāze’s subsidiary Gase has turned to Public Utilities Commission with a proposal for a new natural gas transmission system service’s tariff project, providing for a reducing gas transmission price by 18-46% for more than 95% gas consumers.

FCMC invites Bank of Latvia to provide ABLV Bank with yet another emergency loan

The Finance and Capital Market Commission (FCMC) has invited the Bank of Latvia to issue ABLV Bank another emergency loan.

Crime rate in 2017 was the lowest in Latvia’s history

Last year’s crime rate turned out the lowest in Latvia’s history, as reported by Prosecutor General Ēriks Kalnmeiers in his annual report.

LEC: government priorities should include searching for causes and solutions, not the guilty

Latvian Employers’ Confederation (LEC) is worried about ongoing events and their negative effect on the stability and future development of the country’s economy. LEC believes that stabilization of the financial situation requires careful coordination of actions between institutions and the government.

Producer price level in Latvia grew 0.9% in January

Compared to December 2017, level of producer prices in Latvian industry rose by 0.9 % in January 2018. Prices of products sold on the domestic market went up by 1.2 % and prices of exported products by 0.6 %.

Latvian President believes country’s financial system is stable; prime minister plans to report to European Council

«Latvia’s financial system is stable, and there is no reason to worry about possible instability of the banking system. Banks continue working as usual,» says the President of Latvia Raimonds Vējonis.

Corruption Perception Index in Latvia experienced no major changes in 2017

Latvia’s positions did not improve much in Transparency International’s compiled Corruption Perception Index 2017, said Delna – Society for Openness acting director Liene Gātere in an interview to Rīta panorāma programme.

Latvian citizens arrested in Britain under suspicions of organizing slavery

Five people were arrested in a joint international operation by Latvian and British law enforcement operatives, as confirmed by Latvian State Police.

Opinion: Russia is trying to use the situation to create chaos in Latvia

Russia is trying to use the established situation to create chaos in Latvia. Efforts, however, are fated to fail, says chairman of Saeima’s Defence, Internal Affairs and Corruption Prevention Committee Ainars Latkovskis.

Dismissal requested for Latvia’s Finance Minister; parties worried about finance sector sinking deeper

Latvia’s Finance Minister Dana Reizniece-Ozola has failed to prevent the decision made by United States Department of the Treasury, which is ruinous for the country’s financial sector and humiliating for its reputation, says chairman of New Conservative Party Jānis Bordāns.

Defence Ministry: a massive information campaign is being realized against Latvia

Considering events of the last several days in the country’s banking sector and the arrest of the governor of the Bank of Latvia – Ilmārs Rimšēvičs – it is entirely possible that someone is currently realizing a massive information operation. Its structure and execution is not unlike the one observed in USA, France and Germany during the pre-election period, BNN was told by Latvia’s Defence Ministry.

Latvian parliament to search for ways to dismiss current Bank of Latvia governor

Members of Latvia’s Saeima plan to search for a solution in the matter regarding the possible dismissal of the governor of the Bank of Latvia Ilmārs Rimšēvičs.

Bank of Latvia governor: I have received death threats

«This situation is incredibly complicated. This situation is quite possibly the most complicated one I have ever been in. I feel a great deal of support from people I don’t know, as well as my friends and family members. I have decided to not back down – I am innocent. The the people attacking my reputation have only one goal in mind – to have me step down,» said the governor of the Bank of Latvia Ilmārs Rimšēvičs during a press conference on Tuesday, 20 February.

Proportion of people working in Latvia’s culture sector is larger than the average in EU

The number of people working in Latvia’s culture sector is equal to 4.5% of the total number of employed people in the country. This proportion is also larger than the average one across the European Union, according to data published by Eurostat.

Ministry: idea for compulsory secondary education should be put on hold for now

Considering that Latvia’s Education and Science Ministry has several ongoing industry reforms, it would be best to put the proposal for compulsory secondary education on hold, said Education and Science Minister Kārlis Šadurskis during a meeting of Saeima’s Education, Culture and Science Committee.

Association: ECB should become more involved in resolving Latvia’s financial scandal

Association of Latvian Commercial Banks sees a need for the European Central Bank (ECB) to become more involved in the discussion and help resolve the situation, considering evaluation of ABLV Bank’s business model is in direct competence of ECB.

Hesburger to invest 11.5 million euros in Baltics this year

The largest fast food catering restaurant network in Finland and Baltic States – Hesburger – plans to invest approximately EUR 11.5 million in business development this year. EUR 5.5 million are planned to be invested in Latvia’s market, says Hesburger Development Director Ieva Salmela.

Air temperature drops below -30° C in certain parts of Northern Europe

On Tuesday, 20 February, air temperature in central and northern parts of Finland dropped to -27° C… -31° C in morning hours. In Norway, close to the Finnish border, air temperature has dropped as far as -34° C, according to data from meteorological stations.

FCMC suspects someone may want to undermine Latvia’s financial sector

It is not impossible that someone may want to undermine Latvia’s financial sector, said chairman of Latvian Finance and Capital Market Commission Pēters Putniņš in an interview to Rīta Panorāma programme on Tuesday, 20 February.

European exchange indexes decline; Wall Street enjoys a holiday

European exchange indexes declined on Monday, 19 February. No trading was performed at American stock markets, because the country was celebrating President’s Day.

Party: Latvian banking system’s crisis threatens Skanste neighbourhood's development

There are serious risks associated with European Union’s co-financed project for the revitalization of Skanste neighbourhood, including construction of Skanste tramway line, says member of Riga City Council and For Latvia’s Development party Viesturs Zeps.

Public opinion: KGB documents should be made publicly accessible immediately

Latvia’s society believes the KGB documents should be made publicly accessible immediately. In addition, residents say they are confident in their ability to discuss those documents without the country’s supervision, which takes the form of expert opinions prevailing over society’s moral views, as stated by guest researcher of History Institute of the University of Latvia M. His. Marta Starostina.