bnn.lv Latviski   bnn-news.com English   bnn-news.ru По-русски
Monday 25.09.2017 | Name days: Rauls, Rodrigo
LatviaLatvia

Following use of EU funds, demand for loans increases in municipalities

FaceBook
Twitter
Draugiem
print
(No Ratings Yet)

Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUDemand for loans from the State Treasury has increased after use of EU funds became more active, said Kaspars Abolins, chief of State Treasury, in an interview.

«March demonstrated a record, when 63 loan contracts were signed for a total amount of nearly EUR 50 million. 49 contracts were signed in the first days of May. This means the trend demonstrates the tendency to grow. This is positive because all of those contracts were for investment projects for which municipalities currently attract resources,» said Abolins.

He says the combined debt of municipalities has been staying at around EUR 1 billion for years, because repayment of previous loans is being performed in parallel to new loan requests.

«Because the main lender is the State Treasury, the debt of municipalities has been included in the state debt. But it is not as though the state was the one that borrowed and new municipalities add over with their debts. We borrowed to lend some to municipalities,» Abolins said. He also reminded that the Budget Law includes a net loan limit, which states how much the State Treasury is allowed to lend to municipalities. Because of that, a situation under which the debt grows uncontrollably is unacceptable.

«In addition, there is an institution like the Municipality Loan and Guarantee Monitoring Council, which approves every loan taken by municipalities. The institution also assesses each municipality’s ability to pay back loans. If some municipality is unable to do that, loans have to be restructured. Risk would appear, yes. But this control mechanism ensures risks are minimal,» says the chief of State Treasury.

In cases like the reconstruction of Mezaparks Grand Stage, in which costs exceed funding, Abolins says municipalities have to decide on priorities. «If there was a mistake made during the planning phase, in calculation of resources necessary for projects, it is necessary to consider priorities. If the priority is finishing the project, it is likely municipalities will have to cancel other projects. The situation should also be reviewed by the council. If a municipality comes with loan requests for ten projects, each with risks of the initial funding amount growing, permission will likely not be provided,» comments Abolins.

At the same time, he admits that there are no private projects for which state guarantees would be provided. «The only state guarantee provided to a private company – Latvijas Piens – has since been completely refinanced without state guarantee. With that, we no longer have commitments for any single private company potentially unable to fulfil commitments. The balance of the state guarantee portfolio is currently slightly above EUR 400 million. Most is made up of guarantees once provided for different hospital loans, Latvian Olympics Committee, Altum and State Real Estate. Mostly those are state companies, and the budget provides money for the repayment of state guaranteed loans,» Abolins added.

State Treasury’s data shows that the debt of municipalities was EUR 1.058 billion at the end of Q1. 47% of loan finances have been used by municipalities for projects associated with education, 22% have been used for territorial development and 10% – for culture and tourism projects. The Budget Law states that municipalities are allowed to increase loans by EUR 334.5 million in 2017.

Ref: 224.109.109.6091


Leave a reply

KNAB launched seven separate corruption cases in healthcare in last three years

Corruption Prevention and Combating Bureau submitted to the prosecutor’s office a total of seven criminal processes regarding corruption in Latvia’s healthcare system in the last three years.

German election ends with record-low win for Merkel’s Christian democrats

Federal parliamentary election has been held in Germany and Christian democrats, led by long-time Chancellor Angela Merkel have won, but anti-immigration Alternative für Deutschland have gained their first seats in the federal parliament.

Weather in Latvia to gradually start getting colder in Latvia

Similar to last weekend, weather in Latvia will be dictated by a high atmospheric pressure area with a centre above Scandinavia’s eastern parts. This means the sky will be clear, no precipitation will come, and wind speed will be moderate, as reported by State Environment, Geology and Meteorology Centre.

BNN summary of the week: Vējoņis’ authority under fire and Loginovs ordered to repay illegal donations

BNN offers a summary of this week’s topical news in a variety of categories: Fight; Truth; Business; Future; Growth and Opinion.

Kariņš: Unity started drifting when Valdis Dombrovskis left is management

Unity should seriously consider the option of starting in Saeima elections alongside other parties, said MEP Krišjānis Kariņš in an interview to Latvijas Radio.

CSP: average size of agricultural areas increases in Latvia

In 2016 the average size of agricultural holding constituted 43.2 ha, which is 15.5 % more than in 2013 when the average land area per holding accounted for 37.4 ha. The total standard output has risen by 24.5 %. Nevertheless, the number of economically active farms has reduced by 14.5 %.

Antāne forms a new political party in Ventspils with more than 350 associates

A new political party was founded in Ventspils this Thursday, 21 September. The name of this new party is Laiks Pārmaiņām (Time for Changes). The initiator of the founding of this new party is Baltic Association – Transport and Logistics President Inga Antāne.

NATO: suspicions about Zapad 2017 were justified

NATO views its suspicions about Russian-Belarusian Zapad 2017 military exercises as well-justified, because their scale and geography were larger than what was officially stated.

Expert: Latvia’s electronic industry productivity index on a rise

Electronics industry is the most rapidly growing processing industry in Latvia. This industry’s turnover growth in Latvia has been more rapid than that of Europe and the rest of Baltic States, says manager of wholesale trade company Lemona Latvija Sergejs Nikiforovs.

Video: How to make white-water rafting more dangerous?

If you think white-water rafting is a piece of cake, you can try getting over some rapids on six rafts.

Kaimiņš: Lembergs is Latvia’s biggest misfortune

It is no secret to anyone that the parliamentary committee in charge of investigating Oligarch case has so-called experts that are closely associated with infamous Ventspils politician Aivars Lembergs or his family. In an interview to BNN, Saeima member Artuss Kaimiņš shared his opinion about the latest scandalous development associated with Oligarch talks. He calls Lembergs Latvia’s biggest misfortune.

EC: Money for Rail Baltica in next period will be negotiated

Funding of the Rail Baltica railway project after the year 2020 will be negotiated upon as part of the EU's financial plan for the next period, has stated the European Commissioner for Mobility and Transport.

Sudraba published «false information» on parliamentary committee’s website

Parliamentarian Andrejs Judins asks to evaluate Inguna Sudraba’s possible breach of ethics with the publication of ‘false information’ on the website of Saeima’s parliamentary investigation committee responsible for the investigation of oligarch case.

Estonia plans to direct 300 million euros to healthcare

With the aim of improving the quality and access to Estonian healthcare, the country's government has backed amendments, which set forth increasing healthcare funding by 300 million over a period of five years

HTC agrees to sell part of its innovators and intellectual property to Google

U.S. computer technology firm Google has reached a deal with Taiwanese smartphone-maker HTC so that the latter would share part of its product development team and allow using HTC intellectual property.

22-year sentence for Imanta paedophile comes into force

With the Supreme Court of Justice abandoning the review of Riga Regional Court’s ruling, the 22-year sentence for the man prosecuted in the so-called Imanta paedophile case has come into force, as reported by the court.

Weekend in Latvia expected to be warm and sunny

The sky in Latvia will become clear during the day on Friday, 22 September. Rain is only expected to come to certain western areas. Air temperature will likely reach +16° C… +20° C, whereas air temperature at night will drop to +9° C… +14° C, as reported by State Environment, Geology and Meteorology Centre.

UK to offer EU 20 billion euros, if it can remain in single market

British Prime Minister Theresa May plans to offer a transitional agreement with the European Union that would concern a two-year period until the country leaves the bloc in 2019.

Number of bankruptcies down in Latvia and Estonia but up in Lithuania

Last year, the number of bankruptcies declined 12.4% in Latvia and 10.9% in Estonia. Lithuania, on the other hand, had experienced a 35.2% increase in the number of bankrupt companies, according to information compiled by Coface.

Lithuania sets off alarm bells over quality of international brands' foods

What Lithuania‘s State Food and Veterinary service announced last Tuesday was big news in Lithuania, but not so of a discovery to the majority of Eastern European consumers - food of international brands sold in Western Europe and in Eastern Europe, and Lithuania, are not just the same.

Saeima forms a group to support HIV and tuberculosis patients

On Thursday, 21 September, Latvia’s Saeima agreed with deputy Hosams Abu Meri’s proposal to form a deputy group to support HIV and tuberculosis patients, as confirmed by Abu Meri’s assistant Edgars Ikstens.

Politologist comments whether Vējoņis’ authority is at risk or not

Saeima’s vote in which Latvian President Raimonds Vējoņis’ proposal on the status of non-citizens’ children was not pushed forward was as though a strike against the president’s authority, comments Filips Rajevskis.

In pictures: Mexicans rush to find quake survivors

A massive rescue effort is continuing in Mexico City and other areas in Mexico to find possible survivors caught under buildings that collapsed in the September 19 earthquake, which has killed no less than 237 people.

Producer prices in industry grew 0.1% in August

Compared to July, the level of producer prices in Latvian industry rose by 0.1 % in August 2017. Prices of products sold on the domestic market, as well as those of exported products grew by 0.1 %.

Saeima supports simplification of investigation of less serious crimes

On Thursday, 21 September, Latvia’s Saeima conceptually supported changes to the Criminal Process Law that provide for simplification of investigation procedures of less serious crimes.