Latviski English По-русски
Friday 23.02.2018 | Name days: Haralds, Almants

Economic Diary of Latvia. Two scandals and both of them smell

(No Ratings Yet)

Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUAnother fumble involving sprats had taken place this week. This time, however, the story does not revolve around someone’s ban on sprats: local producers have accused the Latvian Foreign Ministry of ruining plans to supply Latvian sprats to China.

As it turns out, the first batch of Latvian sprats was supposed to leave for China in January. This has still not happened. Producers not only suspect foul play, but also accuse the Foreign Ministry of it.

«We don’t know who exactly in the ministry or embassy is responsible for this. But we do know that the trade agreement between Latvia and China has not been extended. Fish processing companies have managed to find an export market on their own in a difficult situation. The only thing that was remaining on the government’s side was to handle the technical details, but even this was has not been done. We have the appropriate certificate. What we don’t have is an extended agreement. This is not normal if the government hopes to receive taxes from exports,» – said the President of Latvian Fish Processing Companies Union Didzis Smits.

Manager of Brīvais vilnis company Arnolds Babris adds to the heat by saying that his company had plans to send five containers of sprats to China every month. The cost of a single container is EUR 50,000. With that, the company’s losses are estimated at EUR 250,000. «The goods were prepared to be sent. Unfortunately, now we’re forced to sell it elsewhere and at a lower price,» – said Babris.

The Foreign Minister responded to complaints one day alter. The ministry’s representative Ivars Lasis claimed Latvia and China have multiple agreements, but there is no agreement in regard to fish trade. All matters that revolve around exports of food products and their certification are handled by the Food and Veterinary Service and Agriculture Ministry, he added.

The two aforementioned institutions became active in this matter immediately after Foreign Ministry’s statements. According to the head of FVS Maris Balodis, China has changed rules that govern imports of fish products and the previous redaction of the agreement of 2004. He adds that FVS had only just received the new version of regulations from the Chinese embassy. Nevertheless, it has been filled and sent to Chinese institutions for approval.

Gazprom stands accused

Another story of international scale has taken place in the gas supply sector this week. The European Commission has sent complaints to the Russian Gazprom concern regarding alleged abuse of monopoly on the gas market in Central and Eastern Europe.

According to EC, Gazprom has breached Europe’s anti-monopoly regulations by intentionally dividing gas markets of Central and Eastern Europe. In particular, Gazprom is accused of limiting consumers’ rights to re-sell gas to other European countries. Such a practice allows the company in a position of a monopoly to set unfair prices on European markets, as mentioned in EC’s press-release.

Accusations raised by EC apply to Gazprom’s activities in eight countries – Bulgaria, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland and Slovakia.

Representatives of Gazprom claim the find complaints from the European Commission unjustified.

Latvian Prime Minister Laimdota Straujuma claims Gazprom will no longer be able to gamble in Latvia after EC’s report on abuse of monopoly. Nevertheless, she adds that Latvia has gas reserves for the event of an emergency.

Ukraine also wants to join the EC in terms of this initiative against Gazprom. According to Ukrainian Prime Minister Arseniy Yatsenyuk, the country plans to turn to its partners in Europe to hold a joint investigation of Gazprom’s monopoly in Ukraine and Europe. He believes Gazprom operates on non-competitive terms, which causes damage to Ukraine’s economy.

With that, it is worth mentioning that Laimdota Straujuma and Arseniy Yatsenyuk will meet in Kyiv next week.

Dreaming of working in the government sector

While high-rank officials are busy solving complicated matters, Latvians dream of working in the government. This is shown by results of a survey carried out by SKDS. 51.2% of respondents have admitted wanting to work in the government sector. They believe people there have the most stable wages and social guarantees. In 2011, 58.3% of respondents expressed the desire to work in the government sector. In 2012, this proportion was 49.6%. 31.6% of respondents expressed the desire to work in the private sector.

With that, data compiled by the Capital Market Commission shows that Latvians are not as bad off as many describe it. Last year, savings of Latvian households had increased by nearly EUR 1 billion – reaching EUR 8.1 billion. Most of this money is stored in deposits: EUR 5 billion, followed by state pension plans (EUR 241 million), bonds (EUR 193 million), shares (EUR 177 million) and deposits in different savings and loan societies (EUR 15 million).

As noted by the commission, the gradual reduction of loan burden, Latvia’s economic development, low inflation and rise of wages have allowed people to make savings more often. This trend has finally returned in 2013 after years of stagnation.


Leave a reply

Baltic States ask European Commission to maintain EU Cohesion Fund financially strong

Baltic finance minister ask the European Commission to keep the European Union’s Cohesion Policy financially strong and aim it towards results, BNN was told by Finance Ministry.

Police commence investigation on possible money laundering schemes at ABLV Bank

Latvia’s State Police has commenced an investigation about the possible money laundering operations at ABLV Bank, which were reported by Financial Crimes Enforcement Network (FinCEN) US Department of Treasury.

S&P Global affirms Latvia’s credit rating at «A-»

On Thursday, 22 February, S&P Global reaffirmed Latvia’s credit rating on the «A-» level, retaining a positive outlook for the future, as BNN was informed by the State Treasury.

Kristovskis: state officials should be equally strict to Lembergs and Rimšēvičs

«Lack of consistency – such a conclusion appears after looking at the behaviour of state officials in regards to their request for Ilmārs Rimšēvičs’ to step down as governor of the Bank of Latvia,» says Ventspils City Council member Ģirts Valdis Kristovskis.

LSRTC: Zaķusala TV Tower’s reconstruction will cost several dozen million euros

According to chairman of Latvia’s State Radio and Television Centre (LSRTC) Jānis Bokta, reconstruction of Zaķusala TV Tower will cost several dozen million euros.

Trade union worried teachers may not have time to prepare for new education content

Teachers may not have enough time to prepare to work with new education content, said manager of Latvian Education and Science Workers' Union Inga Vanaga in an interview to Rīta Panorāma programme of LTV.

Judins, Loskutovs, Čigāne and Dālderis to continue working in Unity’s faction

Saeima members Andrejs Judins, Aleksejs Loskutovs, Lolita Čigāne and Ints Dālderis will continue working in Unity’s faction and coalition.

Saeima supports member’s proposal to publish wages of Bank of Latvia employees

Latvia’s parliament has decided to support Ints Dālderis’ proposal to publish wages paid to employees of the Bank of Latvia, education institutions, as well as municipal capital associations.

More snow expected on weekends; air temperature to drop even more next week

On the night to Friday, 23 February, air temperature in most of Latvia declined to -21° C… -27° C. It was only warmer in Kurzeme and some parts of Vidzeme, as reported by Latvia’s State Environment, Geology and Meteorology Centre.

SEB Bank: more employment options will open up and workers will become more selective

«It is becoming easier to change jobs nowadays. The largest selection of employment options are found in regional centres and cities, especially Riga and Pieriga. We see fewer employment options in regions even though there is still considerable demand for workers there,» predicts SEB Bank’s macroeconomics expert Dainis Gašpuitis.

ABLV Bank’s manager claims the bank is ready for cancellation of payment restrictions

ABLV Bank is ready for cancellation of payment restrictions, said the bank’s chairman Ernests Bernis during a press-conference on Thursday, 22 February.

62.9% of Latvia’s population was employed in 2017

Compared to the year before, in 2017 employment rate grew by 1.3 percentage points and number of employed persons by 1.5 thousand. Employment rate among men grew faster than among women – by 1.6 percentage points and 1.0 percentage points, respectively. 894.8 thousand people or 62.9 % of Latvia population aged 15–74 were employed in 2017.

Lithuania and Latvia: the tale between two sisters marked with rivalry

Relations between Lithuania and Latvia, two tight-knit Baltic neighbours, may exemplify a sisterly relationship from the first sight, but just over the course of a single week, several pings rang, signalling that rivalry is, and has always been, a component of coexistence.

Lembergs unable to organize his private life because of intense court proceedings

Lembergs unable to organize his private life because of intense court proceedings

Unemployment level in Latvia decreased to 8.7% in 2017

85.4 thousand people aged 15–74 in Latvia were unemployed in 2017. Compared to 2016, the number of unemployed persons has dropped by 9.9 thousand or 10.4 %.

Council member: ECB is openly dissatisfied with restrictions imposed on Rimšēvičs

The European Central Bank (ECB) is openly dissatisfied with restrictions imposed on one of its council members – governor of the Bank of Latvia Ilmārs Rimšēvičs, said council member of the Bank of Latvia Edvards Kušners in an interview to 900 seconds programme of LNT.

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.