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Tuesday 26.09.2017 | Name days: Kurts, Knuts, Gundars

Economic Diary. How much is happiness worth?

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Аuthor: PantherMedia/SCANPIXThis week, it became known just how much money a regular Latvian needs to realize his or her dream. This is why we’ve decided to dedicate this week’s review of economic events to unfulfilled dreams.

Interesting mathematics

Latvians require an average of 665 LVL per month for a comfortable life, and 1 000 LVL for the realization of their dreams. This limit was set based on the results of the recent DNB NORD survey. Demands grow by rates that exceed inflation: when a similar survey was carried out in July 2012, the amount necessary for a comfortable life was 72 LVL smaller than it is now. This time, nearly half (47%) of respondents noted that 500 LVL would be enough for them. 43% of people mentioned amounts ranging from 501 LVL to 1 000 LVL. Nearly every tenth respondent believes a comfortable life costs 1 000 LVL per month or more.

To the question as to how much money they would need to afford to fulfil their dreams, 49% of respondents answered: “up to 1 000 LVL per month”. After compiling all of the results, sociologists concluded that the average Latvian dream is worth 1 473 LVL per month.

Latvia ignored

Another dream is fated to fade away – the dream about the Lidl network of discount shops extending a branch to Latvia. This German company chose Lithuania instead, where it plans to begin the construction of stores in the near future. According to Verslo žinios, the first supermarket will be built in Kaunas: the location has been chosen and the technical project is ready to be used. The planned volume of investments is estimated at 100 – 140 million LVL, according to the Lithuanian media.

This German company had once tried to enter Lithuania, Latvia and Estonia. It purchased a portion of land in these countries in the last decade. However, in 2006, the company’s plans shifted suddenly, and so it was decided to sell these assets.

According to the database, Lidl Latvia earned 3 64 million LVL in Latvia in 2006 and 2.93 million LVL in 2007. The company was liquidated in the beginning of 2011. Most of the Latvian objects were purchased by the Estonian Kaubamaja Group. This company hoped to develop the A-Selver supermarkets in Latvia. They were forced to close at the end of 2009 due to the crisis.

Labour to be made simpler

The dream of entrepreneurs has come true. Starting from April 1, the State Revenue Service will have a special public database of tax debtors. This means that companies will no longer need to present documents about outstanding obligations to the budget in order to participate in contests. The organizer will be able to check this information personally.

The Procurement Monitoring Bureau explained: it no longer has the right to request such information from tender competitors, because it now has the opportunity to look up this information in the public database. The administrative burden, now lifted from entrepreneurship, looks massive on the country scale. Every year, the SRS issues more than 11 thousand reports about outstanding tax obligations.

Nevertheless, the new system has a major underwater stone: the information in the database is updated twice per month – on the 7th and the 26th. This means the following: assuming a company has debt on the 7th of some month. The debt is paid on the next day. In spite of this, the company is still stated on the list for two more weeks, misleading possible clients. What can be done? The manager of the Procurement Monitoring Bureau, Dace Gaile, explains: if the unfavourable decision is made based on inaccurate information from the public database, the entrepreneur has the right to challenge it by presenting fresh data.

We will know everything on July 6

The Latvian government is making leaps toward its dream of joining Eurozone. It became known that the European Commission will announce its official decision on July 6.

The request to provide an emergency assessment of Latvia’s readiness to join the united monetary union was submitted to responsible EU institutions on March 6, 2013. The European commission and the European Central Bank will need to determine whether Latvia adheres to all Maastricht criteria.

According to previously voiced conclusions, the verdict of the European Commission is likely to be positive. This possible outcome is mentioned in Latvia’s section of the Eurozone Economic Forecast of Ernst & Young. According to the agency, Latvia has now completed all necessary conditions for Euro’s adoption. Because the country’s economy continues to grow, the outlook seems stable.

According to the Bank of Latvia, a total of 59 million banknotes worth a total of 1.16 billion LVL and 488 million coins worth 73 million LVL will need to be replaced.


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    Only 1000 Lats?

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