In total, Latvia will have to resettle 531 migrants within the next two years. This was reported by Latvian Foreign Minister Edgars Rinkevics after an extraordinary meeting of EU Foreign Ministers, adding that the reduction of the number of refugees was possible because of the unexpected involvement of Norway, Denmark, Ireland and Switzerland in solving the refugee matter. EU member states will have to resettle 120,000 refugees. Around 66,000 of them have already arrived in Europe, mainly in Greece, Italy, Croatia and Hungary.
Following the meeting of EU Interior and Justice Ministers, leaders of EU member states decided to create special refugee care centres on Europe’s external borders. Whether or not fences will be erected along the border remains unclear. Politicians do not give any clear answers on this. However, on 23 September Latvian Žogu fabrika sent the first shipment of barbed-wire fences to Hungary, which is already busily erecting fences in 80 border checkpoints that are under refugee pressure the most.
Refugees as an opportunity
And this is where a new aspect in the refugee matter surfaces. Specifically – solving the refugee problem can become an opportunity if not for making money, then at the very least for receiving additional European funds. Money will be required for absolutely everything: from financing refugee centres to financing their integration. Additionally, money will be required to finance all sorts of related aspects: allocating additional human resources, strengthening outer borders, etc.
Right now talks are being held regarding EU’s agreed upon allocation of EUR 1.8 billion in order to resolve the refugee crisis. Latvia may receive EUR 46 million from this amount by 2020.
What is interesting is that certain entrepreneurial people have started making money on this topic. Creators of eScan anti-virus programme have announced that while war refugees from Syria are travelling to Europe, criminals are actively tricking Internet readers who follow developments in this topic. Even more attempts of making money off someone else’s misfortune are found among different charity campaigns.
Security experts say the theme of war refugees had been present in the past as well, mostly in the form of e-mails. For example, users would receive false letters asking to help some poor little girl in Syria. Now fraudsters often use shocking photos and tag-lines to fool people into clicking on their malicious links.
It is entirely possible that the refugee crisis could help someone overcome a financial crisis.
Looking at the government’s desperate attempts to find innovative ways of enriching the state budget, a new financial crisis in Latvia may not be all that far away. Latvian State Revenue Service announced this week that the amount of unpaid taxes has exceeded EUR 50 million in the first eight months of 2015. And as long as mutual EU-Russian sanctions remain in place, there will be no hope to complete the state budget tax plan in Latvia.
In search for additional funds, Latvian government has supported the initiative to introduce a solidarity tax and differentiated tax-free allowance, cancel dependants benefits and added serious amendments to the Micro-enterprise Tax, which are meant to increase tax burden for entrepreneurs who lightened tax regime. People who earn more than EUR 4,000 per month will also feel the difference. And although, according to estimates from Finance Ministry, there are 4,700 such people in the country, Latvian Employers’ Confederation has announced its plans to challenge the adoption of solidarity tax in court if the government doesn’t start taking into account the opinion of entrepreneurs.
Ministers nevertheless continue following their picked course without paying attention to criticisms. They continue to claim that tax initiatives are meant to ensure social equality among all categories of employed people in Latvia and bring more money to the state budget.
According to estimates of Finance Ministry, adding a differentiated tax-free allowance on 1 January 2016 would yield the state budget EUR 5.86 million. The effect from increasing tax-free allowance by EUR 10 would bring the budget EUR 17 million in 2016 and later years.
To finish up the topic of social equality in Latvia, here is a piece of news about Latvia’s politicians’ plans to improve life for everyone. Six months since a new regulation regarding the choice of loan contract with the so-called left keys principle was first introduced in Latvia only 50 banking clients have chosen this loan option, which is insignificant in terms of the total number of loan-takers. This is shown by opinions of bank representatives compiled by LANIDA real estate association.
According to bank representatives, the main obstacles that limit families in receiving mortgage loans is the deficit of funds to afford the first instalment. There is also the problem of the existing shadow economy in the country. This is why experts recommend addressing these problems.