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Ceturtdiena 09.04.2020 | Name days: Valērija, Žubīte

BNN summary of the week: Debt write-off. Latvia to care for orphans. IUB prohibition

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Latvia, economy, Covid-19, Bank of Latvia, debts, wages, preventive measures, funding, Riga City Council, summary, orphans, adoption, IUB, recommended    This week, it seems, passed with more consideration for finances than usual. While the Central Statistical Bureau reports about average wages, the governor of the Bank of Latvia presented a proposal for banks to write-off debts left from fat years, as this, according to him, would help secure the return of up to 10 000 residents to Latvia’s economy.

While numbers of coronavirus patients continue increasing in Estonia, Latvia’s single infection case seems insignificant. The infected woman has already been discharged from hospital to continue treatment at home. Meanwhile, Latvia’s government is doing what it can to establish preventive measures to combat the virus. The government has already allocated funding of EUR 2.6 million for procurement of laboratory equipment, protective wear and other needs.

The week also passed with heightened emotions about tax debts. Or, more precisely – how much unexpected income the State Revenue Service has calculated for overpaid taxes. Residents’ activity is confirmed with the number of submitted income declarations – by 3 March 2020, residents submitted 273 434 declarations, which is 40.1% more than last year.

BNN gives you a summary of the key events of the past week, told in news stories of the following topics: Becoming active; Making the greens; Money for virus; City council tries; Children in Latvia; Prohibition and Approval.


Bank of Latvia governor offers banks to write off debts left from «bubble era»

Mārtiņš Kazāks, Bank of Latvia, debts, Latvia, population, loans, mortgage, economy

Bank of Latvia governor Mārtiņš Kazāks

Bank of Latvia governor Mārtiņš Kazāks offered banks to write off unrecoverable debts left from so-called «fat years» or «bubble era», which would allow more than 10 000 people to return to the economy.

In an interview to LTV programme Rīta panorama, Kazāks said a large number of residents in Latvia took loans in the so-called fat years, mostly mortgage loans, which they were unable to pay back later. Some lost their homes, but in most cases even that was not enough to pay back debts. Currently many banks consider these debts unrecoverable, but technically these debts have not been written off.

Kazāks believes it would be fair to write off these debts, considering banks no longer consider these debts recoverable.

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Average wage in Latvia before taxes last year – EUR 1 076

CSP, statistics, average wages, LatviaIn 2019, the average gross wages and salaries for full-time work in Latvia comprised EUR 1 076. Compared to 2018, the average earnings rose by EUR 72 or 7.2 %.

Average net wages and salaries (calculated based on labour taxes applicable on workplace) comprised EUR 793 or 73.7 % of gross earnings. Over the year, net wages and salaries had increased by 6.8 %, showing 0.4 percentage points lower rise than that of wages and salaries before taxes, according to data compiled by the Central Statistical Bureau of Latvia.

Considering the consumer price growth of 2.8 % in 2019, the real increase of the wages and salaries comprised 3.9 %.

In 2019, median gross wages and salaries amounted to EUR 832, and, compared to EUR 774 in 2018, they grew faster than the mean arithmetic earnings (rise of 7.5 %). In 2019, net median wages (after taxes) constituted EUR 613 and rose by 7.1 % over the year.

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Latvian government allocates additional funding to measures against Covid-19

Latvia, Covid-19, coronavirus, Healthcare Ministry, measures, fundingOn Tuesday, 3 March, Latvian government decided to allocate additional EUR 2.6 million for Healthcare Ministry to spend on different measures aimed at limiting the spread of the new coronavirus Covid-19 in Latvia.

Of this amount, EUR 1.7 million will be allocated for the programme «Funding for Emergency Situation». The remaining amount will be used for other means.

Healthcare Minister Ilze Viņķele admitted at a government meeting that likely this one allocation of funds will not be enough, promising to turn to the Cabinet of Ministers again if a need for more funding appears again.

Additionally, she explained that this request for funding may be possible under a moderate scenario. ‘This is under the scenario when the situation does not escalate exponentially and uncontrollably,’ she said.

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Riga City Council’s interim administration outlines three priorities

Riga, interim administration, prioritiesRiga municipality’s interim administration’s priorities until a new city council has been composed will include the planning of the municipality’s budget and its approval, resolution of waste management crisis-related problems and preparation for upcoming snap elections, said the interim administration’s head, Environment Protection and Regional Development Ministry’s (VARAM) state secretary Edvīns Balševics in an interview to Latvijas Radio on Wednesday, 4 March.

In the first week since the interim administration was appointed, its members still have not surveyed all tasks. Nevertheless, the main priorities are clear. As for the main priority – approval of the municipality’s budget – the interim administration admits the discussion of this topic is in its early stages. The budget will be planned using the project composed by the municipality’s executive institutions as the foundation.

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Until new regulations are ready, Saeima proposes banning child adoption by foreigners

children, adoption, Latvia, measures, SaeimaOn Wednesday, 4 March, Saeima’s Human Rights and Public Affairs Committee’s majority conceptually supported establishment of a moratorium on adoption of children by foreigners until new regulations have been developed.

Responsible institutions have to prepare relevant amendments to submit to the committee for review on 9 March. On 10 March the committee may decide on submitting amendments to the Saeima, according to the committee’s head Artuss Kaimiņš.

The committee’s meeting also focused on the opportunity to develop stricter regulations for foreign adoption, which may include a full ban or introduce very strict procedures for exceptions. Participants of the discussion also mentioned exceptions may be handled by the Cabinet of Ministers or a government-level committee.

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IUB prohibits signing of contract in LU House of Letters construction procurement

LU, construction, IUB, House of Letters, project, KNABLatvia’s Procurement Monitoring Bureau (IUB) has prohibited the signing of a contract in the EUR 35 million worth University of Latvia House of Letters construction procurement, according to information from IUB homepage.

On 10 January construction company LLC Merks submitted a complaint in regards to the LU House of Letters construction project’s development, supervision and construction procurement.

The commission’s decision prohibits the client – LU – from continuing the procurement procedure, sign a procurement contract in the procedure and cancel the commission’s decision in regards to results of the candidate selection process.

IUB has also asked LU to prevent violations previously uncovered by the commission and report success within 20 days to IUB and all participating parties.

In accordance with the Public Procurements Law, this decision can be appealed at the Administrative District Court within one month’s time.

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Saeima approves new vice-governor and council member to Bank of Latvia

Māris Kālis, Zita Zariņa, Bank of Latvia, Mārtiņš Kazāks, changes, Saeima, approval, candidates

Māris Kālis and Zita Zariņa

On Thursday, 5 March, the Saeima approved Māris Kālis as vice-governor of the Bank of Latvia and Zita Zariņa as the bank’s council member, as confirmed by the parliament’s press-service.

Bank of Latvia governor Mārtiņš Kazāks was the one who picked the candidate for the post of vice-governor of the bank, because 12 March marks the end of term for the incumbent vice-governor Zoja Razmusa. The post of the bank’s council member has been vacant since December 2019.

62 Saeima deputies voted for Kālis. The New Conservative Party voted against him. Zariņa received support from all parties represented in the Saeima, receiving 89 votes.

Previously Kālis was the acting governor of the Bank of Latvia, as well as a member of Latvian Sworn Auditors Association. He graduated from the University of Latvia with Master’s degree in Economics.

Zariņa’s previous work experience includes the posting of a council member of the State Audit, director of the Audit and Methodology Department. She has also worked at the Central Finance and Contracting Agency. She graduated from the University of Latvia with Master’s degree in European studies and a Bachelor’s degree in Economics. She also graduated from Stockholm School of Economics in Riga with a Bachelor’s degree in Economics and Business Administration.

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US presidential election set to be battle between Biden and Trump

In the US, Senator Bernie Sanders has left the fight for the presidential candidate nomination from the Democratic Party. He has left ex-Vice President Joe Biden the only contender for the nomination and the rival to President Donald Trump in the 2020 US presidential election, American news agency AP reports.

EUR 45.5 million to be diverted for support of agriculture in Latvia

To reduce the COVID-19 crisis in agriculture sector Latvia’s government will divert EUR 45.5 million, as agreed by Finance Minister Jānis Reirs’ work group for support of entrepreneurship and employed people on Wednesday, 8 April.

Global number of COVID-19 cases surpasses 1.5 million

Globally, the number of the confirmed infection cases of the novel coronavirus has exceeded 1,5 million, while a total of 329 thousand people are believed to have recovered. US is still the worst affected nation by the number of infections, German public broadcaster DW and American John Hopkins University report.

Reminder: no visits during Easter holiday

The holiday is near and people want to know if they can meet relatives and friends. Latvian Healthcare Ministry reminds – the virus has no holidays. Any private events involving people who do not live together are prohibited.

Court of first instance rejects Ušakovs’ appeal on dismissal as mayor of Riga

On Wednesday, 8 April, the Administrative District Court rejected Harmony politician Nils Ušakovs’ applications in which he appealed the order issued by Environment Protection and Regional Development Minister Juris Pūce on his dismissal from the post of mayor of Riga, as reported by the court.

Latest on COVID-19 in Baltics. 577 in Latvia, 912 in Lithuania, 1 185 in Estonia

The number of COVID-19 infection cases in Latvia has reached 577, increasing by 29 cases in the past day. Lithuanian media, meanwhile, report 912 confirmed infection cases. Public data in Estonia reports 1 185 infection cases in this Baltic State.

Inflation in Republic of Latvia reportedly at 1.4% in March

Compared to March 2019, the average level of consumer prices rose by 1.4 % in March 2020. Prices of goods have increased by 0.9 % and prices of services by 2.7 %.

Lithuania’s BC chief: «Latvia’s COVID-19 support for business has been swifter»

It is official: Lithuania is extending lockdown until April 27 to combat the coronavirus pandemic which death toll in the country stood at 15 as of Wednesday noon. As many as 912 persons were diagnosed with COVID-19 by then.

Lithuania on path to allow price regulation in government

In Lithuania, the majority of legislators in the Seimas, have backed draft amendments that set forth allowing the government to regulate the prices of essential goods during this time of quarantine, Lithuanian public broadcaster LRT reports.

BNN EXPLAINS | Envelope wages – one of the main reasons why idleness benefits may be denied

People need certainty – if they honestly pay taxes, they should be able to receive support from the state in the event of a crisis, since they have taken care of the state all this time by paying taxes, BNN was told in a phone conversation by chairman of LBAS Egils Baldzēns.

Criminal process launched against Aivars Lembergs for defamation

On 7 April 2020 State Police Kurzeme RP Saldus Department’s Criminal Police Office commenced a criminal process against Aivars Lembergs for untrue statements and claims he has used on multiple occasions during meetings of Ventspils City Council and Finance Committee against city council deputy Ģirts Valdis Kristovskis, as BNN was told by Kristovskis.

Latvia’s Prime Minister: we are financially well-situated in this crisis

We are financially well-situated in this crisis, said Latvia’s Prime Minister Krišjānis Kariņš in an interview to LTV programme Rīta panorama.

Latvian government supports dismissal of State Land Service’s director general

Latvia’s Cabinet of Ministers has supported Justice Ministry’s prepared decision project that details the dismissal of the State Land Service director general Solvitai Zvidriņa from her post, as confirmed by Justice Ministry.

China lifts lockdown in Wuhan

In the Chinese city of Wuhan, where the global pandemic of COVID-19 began, a lockdown has been lifted for the first time since January, British news portal The Guardian reports.

Support in Latvia for COVID-19 crisis prevention reaches four billion euros

The volume of support available in Latvia to finance preventive measures to overcome COVID-19 crisis has reached four billion euros, as reported by Latvian Finance Minister Jānis Reirs on Tuesday, 7 April.

Another month stuck home. Latvian government extends state of emergency

The state of emergency declared in Latvia because of COVID-19 pandemic has been extended until 12 May, as confirmed by Foreign Affairs Minister Edgars Rinkēvičs on social media on 7 April.

75 reports on competition distortions reported to Competition Council in 2019

Last year, the Competition Council received a total of 75 reports related to competition distortions caused by public persons, according to information listed in the latest public account for the institution’s more significant accomplishments in 2019 and developments in competition rights enforcement in Latvia.

Australia quashes child abuse convictions against cardinal Pell

A court in Australia has overturned child sex abuse convictions against cardinal George Pell after he was found guilty and received a prison term, British news portal The Guardian reports.

Education and Science Ministry considers not cancelling centralized exams

Latvia’s Education and Science Ministry considers the option to not cancel centralized exams, especially for 12th graders, as reported on Tuesday, 7 April, by Education Minister Ilga Šuplinska during a meeting with Saeima’s Education, Culture and Science Committee.

Estonian government in two minds on cutting public spending to help economy

Should public spending be cut to help restore the economy? Two of the three parties in the Estonian government have opposing views on this as economic recovery is increasingly discussed, Estonian public broadcaster ERR reports.

Riga International Airport plans to lay off 500 employees

Because of consequences caused by COVID-19, Riga International Airport plans to lay off 500 employees, as BNN was informed by the company.

Poland planning to hold presidential election as postal ballot

The Polish presidential election in May should be held as a postal ballot, the country’s legislators have decided. Opponents of the idea argue that this means putting public health at risk, British-Canadian news agency Reuters reports.

COVID-19 update in Baltics. 548 infected in Latvia, 880 in Lithuania, 1 149 in Estonia

The total number of confirmed coronavirus COVID-19 infection cases in Latvia has reached 548, increasing by six in the past day.

Latvian president urges not to sort idleness benefit recipients based on tax debts

When assessing whether or not a company meets requirements for idleness benefit eligibility, Latvia’s President Egils Levits urges the government to not sort them based on tax debts.

British PM Johnson treated from COVID-19 in intensive care

British Prime Minister Boris Johnson has been moved to intensive care in London with his COVID-19 symptoms worsening as the outbreak is claiming more lives in the United Kingdom, British news portal The Guardian reports.

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