Latviski English По-русски
Wednesday 26.10.2016 | Name days: Kaiva, Amanda, Amanta

Economic Diary of Latvia. How to make money on refugees’ problem

(No Ratings Yet)

Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUThis week finally brought some clarity as to the refugee matter. Although it is still unclear as to how this process will be carried out, some figures have become known.

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 everywhere

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.

About equality

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.


Leave a reply

BATL: industry doubts economic justification of electrifying Latvia’s railway network

The project for the electrification of Latvia’s railway network is currently under review by Finance Ministry, Edgars Putra – the ministry’s parliamentary secretary – told Krustpunktā programme of Latvijas Radio on Tuesday, 25 October.

In pictures: France evicts migrants from notorious Jungle tent village

In northern France, near Calais, authorities have commenced transporting migrants away from Jungle, the tent village, where several thousand migrants have been living for years.

Payments of benefits to be stopped for refugees who left Latvia

On Tuesday, 25 October, the Cabinet of Ministers supported the legal draft detailing amendments to the Asylum Law, which were developed to enhance Latvia’s asylum provision system.

Government urged to declassify Citadele Bank’s sale

Saeima’s Public Expenditure and Audit Committee has sent a letter to the Cabinet of Ministers, requesting the latter to lift restricted access status on all information related to the sale of Citadele Bank.

Number of black stork chicks declined significantly this year

The small amount of precipitation has negatively impacted the feeding and nesting of black storks in Latvia, as concluded by the Nature Conservation Agency, which had performed annual monitoring of endangered black storks in cooperation with Latvian State Forests this year.

Estonia not willing to ban fur animal keeping and skinning

Reacting to a call from animal rights activists, Estonian environment and rural affairs ministries have found that there is no reason to prohibit fur farming in the country.

IMF on Estonia: Increase in wages could harm exporter competitiveness

Estonia should take care of rising imbalance of wake increase and lagging productivity to ensure Estonian exporters can be profitable in foreign markets, the International Monetary Fund evaluated.

Study: Gender gap in alcohol consumption smaller as young women drink more

By comparing the drinking habits of four million people born between 1891 and 2001, it has been found in a study that the generations living today have reduced the likelihood of men consuming more alcohol in unhealthy amounts than women.

Criminal process launched in relation to K.Barona Street repairs

Corruption Prevention and Combating Bureau has launched a criminal process in relation to possible forging on documents in the procurement process associated with the reconstruction of K.Barona Street in Riga.

Sirens to be tested across all of Latvia

On Tuesday, 25 October, the State Fire and Rescue Service will conduct a three-minute test of emergency sirens. The test is scheduled for 15:00. It will help determine the function of the system and identify any technical problems.

Belgium bocks CETA, but EU and Canada remain hopeful over signing

The European Union and Canada have stated they still hope to sign their bilateral free trade deal, after the Belgian federal government clarified that it cannot ensure the backing of three regional bodies for the agreement.

This week to be rich with precipitation and cold in Latvia

The anti-cyclone that dictated weather in Latvia over most of October is gradually moving east. It will be replaced by a small and active cyclone. With that, meteorologists expect often precipitation in Latvia this week.

Experts: Russian warships on their way to Baltic Sea

Movements of warships in the Mediterranean Sea and the North Sea, as well as internet comments show that two Russian nuclear-equipped corvettes are currently on their way to the Baltic Sea, even though official reports suggest the opposite, as concluded by experts of Atlantic Council think tank.

Police launches disciplinary cases in relation to supply of inappropriate vehicles

Multiple disciplinary cases have been launched in relation to the supply of vehicles non-compliant with requirements of State Police. In addition, Internal Security Office has been asked to assess the responsibility of officials responsible for the procurement.

Latvia begins ratifying Paris agreement on climate change mitigation

On Tuesday, 25 October, Latvian Cabinet of Ministers plans to review the legal draft ‘On United National Organization’s Framework Convention on Climate Change’ prepared by the Environmental Protection and Regional Development Ministry.

Belgian Wallonia rejects EU ultimatum over EU-Canada free trade deal

The Belgian region of Wallonia has on October 23 rejected an ultimatum from the EU to quit objecting to the EU-Canada free trade deal in 24 hours.

Estonia increases tax revenue by 6.8%

Estonia’s tax collector has in the first nine months of 2016 received 6,8% more revenue that in the same period in 2015.

Latvia’s population declined by 4,636 this year

In the first nine months of 2016, Latvia’s population decreased by 4,636 persons. This is because the number of deaths exceeded the number of births. In the corresponding period of 2015, population decline constituted 4,751 persons.

PUC: Latvijas Gāze remains obligated to provide third parties with access to gas infrastructure

Considering that the Administrative Regional Court has declined LG’s request for temporary solution, the company remains obligated to provide third parties with access to natural gas transmission infrastructure.

Estonia to combat large-scale imports of alcohol from Latvia

Estonia’s Tax and Customs Department plans to equip all border control checkpoints with surveillance cameras to record car registration numbers to thereby better combat large-scale imports of alcohol from Latvia.

Latvians the most satisfied with wages in Baltic States

Compared with other Baltic States, Latvia has the largest number of employed people who believe they receive adequate pay for their work. 39% of employed people in Latvia believe they are paid adequate wages, as well as 34% in Estonia and 19% in Lithuania.

Farmers-greens announce victory in Lithuanian Seimas election

The Union of Peasants and Greens claimed victory in the Lithuanian Seimas election after the second round of the vote was held on October 23.

Finance minister blocked SRS candidate Nikitins' approval to FCMC

Although the personnel selection process for the approval of the new head of the State Revenue Service has defined a possible candidate, specifically high-rank official of the Bank of Latvia Andris Nikitins, his chances to win are reduced by the decision made by Finance Minister Dana Reizniece-Ozola to pick the best candidate among the other candidates.

Week in Lithuania. Lithuania unveils new tourism brand

Lithuania will until 2020 use a new tourism brand to market itself to foreign tourists. The new brand, unveiled by the State Tourism Department on October 19, features the words «Lithuania. Real is beautiful» printed on a pastel mint postage stamp

Economic Diary of Latvia. The richer the people, the better the security

A very interesting matter was voiced in Latvia this week. The matter addresses the link between the overall level of welfare of the country’s residents and the country’s national security.

Newest comments