bnn.lv Latviski   bnn-news.com English   bnn-news.ru По-русски
Sunday 24.06.2018 | Name days: Jānis
LatviaLatvia

Economic Diary of Latvia. Everyone is dancing, or sirtaki for the EU

FaceBook
Twitter
Draugiem
print
(No Ratings Yet)

Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUIt would be unfortunate to start off with a trivial ‘We told you so’, but it seems there is no other way: on 16 July the Greek parliament approved the measures necessary for international creditors to permit the realization of a new bailout plan. This means Greece desperately wants to receive the EUR 86 billion, and Latvia will not be able to sit this one out.

Debates in the Greek parliament continued for more than four hours. In the end, 229 deputies out of 300 voted in favour of measures. With that, the Greek parliament has agreed to, among other things, to increase VAT in a number of sectors and the pension system.

After such a vote, the south European country has paved the way for European structures to make the decision to allocate funds necessary for the restoration of work of Greek banks and the cover of the debt of EUR 3.5 billion Greece has before the European Central Bank on 20 July. The EU plans to a loan of EUR 7 billion to Greece. This will allow the country cover its immediate financial needs during the transition period prior to the adoption of the new bailout plan. The country needs a total of EUR 86 billion to resolve its problems. Talks about allocating this amount will take around one month.

If the third bailout plan for Greece is approved, Latvia will have to guarantee up to EUR 240 million, said Bank of Latvia advisor Andris Strazds this week. And even though only part of this amount will have to be provided and the other part will serve as guarantee, it will nonetheless increase Latvia external debt. Strazds said he does not believe Greece will even return the money it has borrowed over the years. ‘We risk the money of our taxpayers,’ – he said.

He added that the size of financial assistance to Greece has grown considerably over the past several weeks because of absurd actions of this country’s government: from a dozen billion euros to nearly a hundred million euros. As the Finance Ministry explained it, the aforementioned EUR 240 million will be taken from the Latvian budget only if Greece fails to return the loan.

Does anyone in the world truly believe Greeks plan to return at least part of the debt?

And even though both Governor of the Bank of Latvia Ilmars Rimsevics and Finance Minister Janis Reirs, and even Prime Minister Laimdota Straujuma, have been doing their best to convince residents that the Greek crisis will not affect Latvia the slightest, BNN warned multiple times: it will affect Latvia and Eurozone.

What does Iran have to do with anything?

There was another event this week. This one does not seem to have any relation to Latvia at first glance. Nevertheless, it may have serious geopolitical consequences for Latvia as well.

The long-lasting talks between Iran and six major countries – France, UK, Germany, USA, China and Russia – concluded this week. As soon as the agreement has been ratified by the UN and government of countries, it will be possible to talk about the conclusion of the 12-year long dispute with Iran in regard to the country’s nuclear plans. The reached agreement states that Iran will not develop its nuclear programme for military purposes and western countries will gradually lift their sanctions off the country, allowing it to return to the international market.

Iran means oil. The country has the fourth largest oil deposits in the world after Venezuela, Saudi Arabia and Canada. High-quality Iran oil is concentrated in a small region and its collection is cheap. Iranian export could rise to one million barrels in the first year after lifting sanctions. What is more important, international demand for oil can be satisfied completely in 2016 with oil from Iran alone.

Globally this means the appearance of a new player. This will prevent prices from jumping. On the other hand, oil price below USD 60 per barrel will lead to the decline in the extraction of expensive shale oil in USA, which will slightly slow down the shale revolution. For Latvia this means the fuel price will not change much. With that, the prices of goods and services that rely on oil prices will not change much.

Having guarantees is nice

While complicated plans are being executed on the global chess board, Latvian entrepreneurs are not chasing dreams and promises. They do in fact take their responsibilities very seriously. First of all, most of them wish to increase their level of knowledge of foreign languages and improve their marketing skills.

According to results of the recent Citedele Index, 43% of Latvian managers mentioned foreign languages when asked about which skills or knowledge would benefit their employees the most. Increasing knowledge and marketing skills is the second priority for entrepreneurs.

Acquisition of additional knowledge in IT areas (29%) and financial planning (27.5%) are also among the most often mentioned areas for improvement.

According to experience, entrepreneurs, especially young ones, often find it difficult to differentiate between financial flow and calculating revenue/expenses. This is why company managers should consider improving their knowledge and skills in these areas. Small and medium-sized companies are often unable to afford a financier. It is only harder to do business if you don’t know exactly what you’re doing, says member of Citadele Bank’s board Santa Purgaile.

It is also worth mentioning that some entrepreneurs mentioned that they would make use of additional knowledge in bureaucracy, journalism and pedagogy. Motivation and positive thinking also play a major role.

Ref: 017.109.109.5823


Leave a reply

SRS uncovers numerous violations more than half of inspected companies

State Revenue Service’s Tax Control Office performed a total of 305 thematic inspections of employers in Latvia in Q1 2018. Authorities recorded violations in 171 inspections, according to information from SRS.

Third level pension plan deposit volumes reach new record value

Residents’ interest for pension savings remains high. The volume of deposits made to private pension funds in the first three months of 2018 has reached a new historic peak: a total of EUR 16.5 million has been paid to 3rd level pension accounts, which is 11.6% more when compared to the same period of 2017, as reported by Finance and Capital Market Commission.

Petrol station network in Latvia caught performing fraudulent activities with diesel fuel

State Revenue Service’s Tax and Customs Police have uncovered and put an end to a fraudulent scheme with diesel fuel performed by some network of petrol stations in Latvia, as confirmed by the service.

Kaimiņš: I believe CPCB is performing a political order

In the evening of Thursday, 21 June, Corruption Prevention and Combating Bureau released three people previously detained as part of a criminal process regarding possible illegal funding of KPV LV party – Saeima deputy Artuss Kaimiņš, his colleague Atis Zakatistovs, and businessman Viesturs Tamužs.

Latvia’s parliament conceptually supports new sanction regulations

On Thursday, 21 June, Saeima supported in the final reading amendments to the Law on International Sanctions and National Sanctions of the Republic of Latvia that are meant to improve sanction regime regulations to ensure efficient application of national and international sanctions, as reported by Saeima press-service.

Storm in Tallinn floods streets, cuts Croatia-Argentina match short on TV

A rain storm has hit northern Estonia on Thursday, flooding some streets in the capital Tallinn, damaged buildings and badly affected the broadcast of an interesting World Cup game.

American banks tested for financial stress show positive results

The U.S. has performed banking stress tests and found that the 35 largest banks operating in the country have enough funds on hand to sail safely through a severe financial crisis.

Saeima fires judge for coming to work in a drunken state

On Thursday, 21 June, Latvia’s parliament supported the proposal to dismiss Rezekne Court judge Arvis Garais from his post. 71 deputies voted in favour, no one abstained and no one voted against.

UK to have three requirements to EU citizens willing to remain in UK

For citizens of the European Union willing to continue living in the UK after the country leaves the bloc, they will have to submit applications and answer three key questions over the internet, according to the country's interior minister.

Weather in Latvia to be rainy and cool during Ligo; next week’s weather to be dry and hot

Weather at the end of the week in Latvia will be dictated by a cyclone. Because of that, there will be instances of rain on Ligo. Weather is expected to improve next week, however, according to Latvia’s State Environment, Geology and Meteorology Centre.

Lithuania’s blood plasma corruption scandal extends to Latvia

The former head of Lithuania‘s National Blood Centre, suspected of corruption and involvement in unlicenced activity, received more bad news this week from Latvia, where investigators of the Lithuanian Special Investigation Service had questioned the Latvian Health minister, Anda Čakša.

Administrative burden to be reduced for foreign students and researchers

The administrative burden will be reduced for foreign students and researchers, as well as all education and research institutions hosting them. This is provided by the amendments to the Immigration Law approved by the Saeima in the third reading on Thursday, 21 June.

Latvian Economy Minister endures no-confidence vote

Saeima declined opposition deputies’ request for dismissal of Economy Minister Arvils Ašeradens.

Swedbank economist becomes new member of Bank of Latvia Council

On Thursday, 21 June, Latvia’s Saeima approved Mārtiņš Kazāks in his new post as member of Bank of Latvia Council, as confirmed by Saeima’s press-service.

Pope Francis’ visit to Latvia will be a national holiday

Latvia’s parliament has approved in the final reading a law that makes 24 September – the day Pope Francis plans to visit Latvia – a national holiday.

ICT specialist numbers in Latvia are below Europe’s average level

In Latvia, information and communication technology specialists form only 2.2% of all employed people in the country, which is considerably below the average level in the European Union – 3.7%. Romania and Greece are the only two EU member states in which the number of ICT specialists is below Latvia’s, according to European Commission’s DESI index.

Hungary adopts prison sentence for helping migrants

Hungarian National Assembly has passed a set of laws criminalising with prison terms some help provided to illegal immigrants by non-governmental organisations.

Harmony plans turning to Constitutional Court to prevent transition to Latvian language in schools

«Why should this reform stay unrealized? It is because schools are not prepared for cardinal changes coming from dozens of other reforms that have already shocked the country’s entire general education system,» says chairman of National Minority School Parents Forum and member of Harmony’s work group in Konstantīns Čekušins.

Deputies detained in KPV LV criminal case not declared suspects yet

Saeima deputy Artuss Kaimiņš and businessman Viesturs Tamužs detained in the criminal process regarding possibly illegal funding of KPV LV party have not yet been declared suspects. Both are currently in police custody. It is likely Kaimiņš will be released later today, 21 June.

Production of mines and grenades planned in Estonia

As the Estonian parliament has adopted new rules on military arms and ammunition production in the country, local defence firm Eesti Arsenal has voiced its plan to build a factory in Estonia to make military explosives.

Total tax debts in Latvia reached EUR 1.224 billion in June

At the beginning of June, total tax debts in Latvia, including topical, halted debts and extended repayment terms were equal to EUR 1.233 billion, which is 0.6% less compared to May, as reported by State Revenue Service.

Switch off internet nationwide during exams – Algerian approach

In an attempt to prevent cheating during secondary school exams, the north African nation Algeria, has turned off internet in its whole territory.

Control Service proposes kicking out shell companies as intensely as offshore companies

Shell companies in Latvia should be combated with the same intensity once shown to offshore companies, says chief of Anti-Money Laundering Service Ilze Znotiņa.

EU imposes tariffs on blue jeans, motorcycles and other U.S. export goods

The European Union will introduce retaliatory tariffs against U.S. exports on Friday, EU Trade Commissioner has stated a top official has stated in the bloc's reaction to Washington imposing steep duties on steel and aluminium earlier in June.

Latvia’s Saeima proposes improving job-combining rules for state officials

On Wednesday, 20 June, Latvian parliament’s Public Administration and Local Government Committee decided to submit for review amendments to the Law on Prevention of Conflict of Interest in Activities of Public Officials.

Newest comments