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

Economic Diary. Lend the state some money

(No Ratings Yet)

Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUOn the eve of the long vacation, the Latvian Economy Ministry announced multiple business support programs.

Preserving balance

The first support programme – High added value investments – is set to begin this year. This will be its third stage. As part of it, it is not planned to expand its existing capacity, but to develop new products and finish active projects. The maximum funding for each single company is estimated at LVL 700 thousand at the moment. It is planned to support 30-40 projects.

Economy Minister Daniels Pavluts believes that balance should be preserved between the growth of productivity and salaries, so that Latvia would be able to reach EU standards of living in the future. He believes the country should avoid having fat years all over again.

Helping big projects

The second support program provides the creation of an unprecedented government level co-investment instrument. It is scheduled to launch next year. Up until now Latvia offered companies support programs funded by EU funds. But different limitations prevented them from satisfying the needs of specific investors. These limitations made them [investors] turn to other countries.

Latvia’s national policy on the country’s industrialization mainly suggests changing this approach. Pavluts believes this will give the state a support instrument that will be used to develop the manufacturing industry and create jobs in Latvia. The processing industry is regarded as the target industry for this initiative.

It is planned to be used to support large investment projects and be registered as a grant for construction of industrial structures or capacity increase. Companies registered in Latvia and organizations that service municipal or government infrastructures will be able to compete for it. It is planned to have the budget of 2014 allot LVL 10 million for this initiative. It will help support the development of two or three large investment projects.

Looking after the little guy

The government also launched one more support program this week. It will allow no less than 100 companies to receive loans up to EUR 25 thousand big in the next couple of years. The reason for the launch of this program is that the Mortgage Bank will no longer service issue of micro-loans to companies this year. However, as the general economic activity of businessmen increases, so will their need for funding.

The plan of the Economy Ministry suggests that the Latvian Guarantees Agency and the country’s commercial banks will take up this cup. The latter will be the main difference between this initiative and the current order. Seeing as how commercial banks will be in charge of providing loans, seekers will need to come up with co-funding. The amount provided by the state – EUR 5 million – will be doubled as a result of this. The number of companies in Latvia is close to 400 – given that the provided loans for single companies are not to exceed EUR 25 thousand. It is possible that the number of eligible companies may prove to be larger in reality.

State debt is defined by payments

Finally, one last innovative thought tied to loans. This one faces the people-state direction. It was initiated this week. Latvian residents are now able to lend the country money: the long-promised savings bonds have been made available to the residents. This initiative is expected to attract more than LVL 100 million in a matter of year. This does, however, include low interest rates: 0.3% for one year, 1.8% for five years and 3.25% for ten years. According to Finance Minister Andris Vilks, this instrument is made especially attractive in comparison to other investment investment options by its iron stability: unlike bank deposits, it guarantees the whole amount.

The first Latvian state bonds are available for purchase at the main website (only available digitally).

In order to become a client, all a person needs to do is authorize using an internet bank, pick his or her preferred amount and term. The nominal price of a single bond is LVL 1, the minimum price of a transaction – LVL 30. The cap for a single transaction is set at LVL 49 thousand for bonds of a single kind. These bonds will not be allowed to be re-sold or given to someone else (it will be possible to inherit them).


Leave a reply

  1. Ilmars says:

    How much money is going to wind up in bankrupt companies like Air Baltic and LM ?
    Will there be independant oversight so that money goes to viable companies and not political cronies ?
    Will there be transparency on where this money goes ?
    Given the IMF bailout 5 years ago , the track record of the Latvian Government in managing money is less than complimentary.
    Lend the state some money ? Will I ever see my money again .

    Thumb up 0 Thumb down 0

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.