bnn.lv Latviski   bnn-news.com English   bnn-news.ru По-русски
Monday 24.04.2017 | Name days: Nameda, Visvaldis, Ritvaldis
LithuaniaLithuania

Lithuania vehemently refutes S&P report, possible Brexit aftermaths

FaceBook
Twitter
Draugiem
print
(+1 of 1)

Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RU

Linas Jegelevicius for the BNN

While the world – and Lithuania- are in the guessing game what the aftermaths of Brexit will be for the world, Europe, UK itself and each member of the already one-member-less 27 member bloc, Standard & Poor’s, an American financial services company, knows it best.

According to S&P, Lithuania would be the most affected by Brexit among all Eastern European nations. Lithuania’s Ministry of Finance hastened to refute the international rating agency’s claim, saying it has «drawn misleading conclusions.»

An unexpected and unsubstantiated report

Lithuanian analysts that BNN spoke to for the article also were generally shrugging their shoulders in disbelief: «If you were to ask another similar company, you’d hear that Poland, Latvia or any other Eastern European country will be ill-affected most by it,» quipped Lauras Bielinis, a famous Lithuanian analyst.

Still, the S&P report has stirred some ripples across 11 Eastern European countries, Turkey and Russia- all of which were analysed by the Americans.

Responding, the Lithuanian Ministry of Finance, issued the statement: «In light of the global analytical forecasts, Lithuania would not be among the most exposed countries, if all EU member-states were rated. Many analysts agree that the biggest Brexit consequences would be felt by Ireland, the Netherlands, Belgium, Latvia, Malta, Cyprus and Luxembourg. Germany would also be affected, however, the effect would be lower than the listed countries.»

Illogical statements?

Furthermore, the ministry said the Standard & Poor’s rating features «illogical statements» in connection to Brexit effects on Lithuania’s exports, although Lithuania’s export-GDP ratio is at 2.5 per cent, as compared to 3.2 per cent in Estonia and 3.9 per cent in Latvia.

«Nevertheless, the countries are not listed as being exposed,» notes the release.

It also emphasizes that Lithuania was also «misleadingly listed» because of the remittances made by emigrants.

«Our preliminary calculations suggest they could total at about 300 million euro in 2015 or about 0.8 per cent of the GDP, which is considerably less than specified in the S&P analysis (1.2 per cent). Furthermore, if the Lithuanian citizens living in the UK were to move elsewhere because of Brexit, they would probably move to Ireland and Norway. This means that the remittances of those working abroad would continue flowing to Lithuanian households,» the Ministry of Finance said.

It also questioned the number of Lithuanian emigrants living in the UK published by S&P. According to the ministry, they total is 5.1 per cent, not 5.4 per cent, of the Lithuanian population.

Impact will be minimal

«So to wrap it up, the report is misleading facts-laden and it bids noting apocalyptic to the Lithuanian economy. Standard & Poor’s has, in fact, not asked us for any official data, thence the misleading conclusions,» says Algimantas Rimkūnas, the finance vice-minister.

In his words, the forecast on Brexit’s impact on Lithuanian economy is «minimal» and there will be no direct impact in short-term.

«It is not tangible and will not be such in the near future,» he underlined.

The US financial ratings company‘s report in June found Ireland as the country to be the most affected by Brexit aftershocks.

Then, with 20 EU countries’ migrant flows, exports to the UK, foreign direct investment here and financial sector claims on UK institutions analysed, Canada and Switzerland were the only non-EU countries included the index, which also featured Nordic countries and major European players such as France and Germany.

«Ireland in the forecast is to be hardest hit due to its shared history and common border with the UK, which has led to the significant trade and huge migration between the countries,» the June report read.

Lithuanian analysts baffled

«It is a sheer bullshit to claim that Lithuania, not any other European country and the United Kingdom first of all will be most ill-affected by aftermaths of Brexit,» Rimvydas Valatka, a renowned Lithuanian commentator, told BNN. «How can Lithuania’s economy be impacted so much if it, in its size, is no bigger that the Corwall County’s in the UK?»

He noted sardonically that S&P analysts may have been «overheated» in their heads when compiling the report.

The analyst also did not dare to speculate how the nomination of Theresa May to the post of the UK’s Prime Minister may affect the Brexit process.

«I reckon it will be in line with the EU laws outlining the mechanism. There is no simply other way,»he said.

Valatka called David Cameron «a downright idiot» who has been juggling the idea of UK referendum on the EU membership for the last couples of years.

«If not him, we would not have had the referendum and Brexit. The card of democracy has turned against him, ruining her political career,» Valatka said, adding, «There is always a possibility that some new idiots like him will pop up somewhere on the continent.»

New UK PM will have to turn ear to others

Lauras Bielinis, former advisor to President Valdas Adamkus and associate professor, downplayed the S&P report, saying that any other consultancy would have provided different results.

«I am sure that Poles, Latvians and any other Eastern Europeans have apprehensions that namely they are to be ill-affected by Brexit most,» he told BNN.

Asked about the arrival of Theresa May, Bielinis believes she will try to mitigate the adverse consequences of Brexit both within the United Kingdom and the European Union.

«But I am sure she will proceed with the procedures towards the country’s exit from the bloc,» he added.

Although the new PM was known as a staunch supporter of tough migration politics, Mrs. May will need to attune her position on emigration with the UK Parliament and the Queen, according to him.

«It might not be easy always. She will definitely have to turn ear to what they say,» he said.

Lithuania is not special in any way

Meanwhile, Vytautas Dumbliauskas, an analyst and associate professor, reasoned to BNN that Lithuania «in no way» is special or different in terms of the negative Brexit aftermaths.

«From that point of view, the Poles are the ones to feel the most palpable aftermaths of Brexit for a single reason: their UK community is the largest,» he said.

Mrs. May’s nomination, he believes, is the interference of «God himself».

«Look, when the United Kingdom is in trouble, a woman turns up at the helm of the country. You, sure, understand I have the legendary Margaret Thatcher in mind,» the analyst said.

Although the new PM is known for its tough stance on emigration, Dumbliauskas tends to disregard the concerns in the UK Lithuanian community.

«The country will do nothing without the foreign workforce, so she will have to deal with the reality,» he predicted.

New PM will have to listen to Queen

Vytautas Bruveris, a senior journalist at daily Lietuvos Rytas, says he is «sticking» with the position by the Lithuanian Finance Ministry, which says it will be «minimal.»

As for the new UK political leadership, he believes that the UK’s financial and political elite will be hammering out policies in the post-Brexit Great Britain.

«The new Prime Minister will definitely have to heed what they say,» Bruveris told BNN.

Ref: 111.111.111.3511


Leave a reply

Week in Lithuania. Imports from Belarus' Astravyets NPP restricted

Seimas on Thursday, April 20, adopted a bill to restrict electricity imports from the Astravyets nuclear power plant under construction in Belarus and other unsafe nuclear facilities in third countries.

Wider economic cooperation between Latvia and Singapore planned

As reported by Finance Ministry, work will be performed to establish wider economic cooperation between Latvia and Singapore, both in the field of tax administration and investments.

Lange: poor road quality causes drivers to lose more than one billion euros every year

Poor road quality in Latvia causes losses for drivers worth more than one billion euros every year, announced Janis Lange, chairman of Latvijas valsts ceļi, at an annual conference on Friday, 21 April.

Latvia and Lithuania continue work on single gas market’s development plan

Latvia and Lithuania continue working on single gas market development plan, BNN was told by Latvian Economy Ministry.

Belarus values Latvia’s experience developing e-management

Belarus values Latvia’s positive experience in development of e-management. Constructive cooperation in this field has provided residents in Latvia and Belarus with cheaper roaming tariffs and improved mobile broadband development, as reported by Environment Protection and Regional Development Ministry.

Poor skills in digital technologies can reduce one’s competitiveness on the market

Only 2% of board members in Latvia’s leading retail trade companies have skills working with digital technologies. The same applies to 6% of board members in transport and logistics companies, 4% - in energy companies and 0% in manufacturing companies, according to results of a study performed by personnel selection company Amrop.

Government decides not to support Ventspils’ involvement in Nord Stream 2

This week, Latvian government decided behind closed doors not to support the involvement of Ventspils Freeport in the Nord Stream 2 project, according to publicly available information.

Estonia to invest millions in IT and technology business development in regions

Close to 160 million euros are planned to be invested in developing the sector of information and communications technologies in Estonia outside larger cities, according to a state budget strategy for 2018-2021 by the Estonian government.

Bite buys Unistars and gains access to 5G frequency

Mobile communications operator Bite has bought telecommunications company Unistars, making a major step towards introducing 5G network in Latvia, as reported by Bite manager Kaspars Buls.

Study: Latvian businessmen feel threatened the most by increasing tax burden

Nearly all Latvian CEOs expect competition to grow in the future. In addition, this will happen in conditions of deficit of qualified workers, according to results of a study performed by PricewaterhouseCoopers.

Court in Russia bans Jehovah's Witnesses as extremist organisation

The Supreme Court of Russia has accepted a request by the country’s Justice Ministry to term Jehovah's Witnesses as an outlawed religious organisation - best known for going door-to-door looking for new converts -, considering it to be an extremist group.

Progress in the realization of insolvency reform in Latvia

New regulations listed in the Insolvency Law provide for increasing the role of creditors in the choice of figures supervising legal protection processes, as well as enhancing the work of administrators in supervisory institutions – expanding the capacity and authority of the Insolvency Administration in performance of supervisory functions and raising qualifications of employed administrators, as reported by Justice Ministry.

Demand for Barbie considerably down in Europe and North America

The overall sales of Barbie dolls have fallen 13%, world's largest toy company, American manufacturer Mattel has stated.

Weather in Latvia to be windy and rainy for the next couple of days

The end of this week and beginning of the next will be windy and rainy in Latvia, as reported by the State Environment, Geology and Meteorology Centre.

Lithuanian MPs deal with smut resolvedly, but is it sign of parliamentarian transparency?

If the Lithuanian lawmakers’ adhering to law and ethics was to be judged by the events from the last couple of weeks, one could conjure up an impression that the Lithuanian legislature is one of the most transparent around – and a whole lot such than the previous parliamentary term.

Riga International Airport will have a new air traffic control tower

Latvijas Gaisa Satiksme promises that Riga International Airport will have a new, modern air traffic control tower in 2013.

Lembergs will fight for his «warm seat» in the mayor’s office

Aivars Lembergs intends to participate in upcoming municipal elections in Ventspils as a mayoral candidate from his party – For Latvia and Ventspils.

Latvia’s financed loan volume increased by 72 million euros in Q1

In Q1 2017, loans worth more than EUR 94 million were issued through Latvian loan platforms, according to data compiled by Latvian Association of Alternative Financial Services.

Number of passengers carried by airBaltic grows 12%

Latvian national airBaltic airline carried 224,921 passengers to destinations in Europe, Scandinavia, Russia, CIS and the Middle East in March. This means a 12% increase in comparison with last year, BNN was told by the airline.

Birth rates in Latvia 6.9% behind previous year

Compared to the same period one year ago, 365 children fewer were born in Latvia in Q1 2017, which means a drop of 6.9 %.

Study: Latvia has become one of the centres for Russian organized crime

Russian organized crime groups, which often have ties to Kremlin, have varied their activities in Europe, including Latvia. This is why European institutions should consider them more of a security, not crime problem, as concluded in a study by British researcher Mark Galeotti* published by European Council on Foreign Relations.

Estonian state securities’ fund increases profits to 1.2 million euros

The gross revenue of the Estonian state securities and business support fund Kredex grew 16% reaching 7.1 million euros last year, while profits rose to 1.2 million euros, which is a 20% increase.

New CEO of Riga Freeport to have a major wage increase

Riga Freeport authority plans to announce a personnel selection process to find a new CEO for the Freeport, said Mareks Gailitis, advisor to chairman of the board of Riga Freeport Andris Ameriks.

20 asylum seekers resettled from Greece to Latvia

As part of the European Union’s resettlement programme, twenty people were relocated from Greece to Latvia on Wednesday, 19 April. Ten of those people are children, as reported by Office for Citizenship and Migration Affairs.

Estonia to impose banks with 14% advance income tax

Amending the Estonian income tax system, the country’s government has decided to push for a 14-percent advance income tax on banking institutions’ profits.

Newest comments