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BNN summary of the week: Latvia’s biggest budget; PNB Bank halts operations; Latvia sad with Latvia

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Some positive news surfaced in Latvia this week – Prime Minister Krišjānis Kariņš announced that the country’s next budget will be the largest one yet and will exceed EUR 10 billion. In spite of this, however, financial difficulties have been observed – PNB Bank has ended up in a tight spot. The bank’s shortage of funds has forced Finance and Capital Market Commission to halt all of the bank’s financial operations.

Meanwhile, Lithuania’s President Gitanas Nausėda voices his sadness over Latvia’s decision to purchase energy that will be produced by Astravyets nuclear power plant in Belarus, in an area not far from the border with Lithuania. He admits, however, that this was not unexpected.

Estonia has plans to reform its pension system, but no pension growth is promised.

BNN offers you a summary of the most topical developments of the week, including topics such as: Growth, Decline; Decision; Fight, Change; Disappointment; Explanation; Concerns.

GROWTH:

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Latvia’s Prime Minister Krišjānis Kariņš

Prime Minister says 2020 budget will be Latvia’s largest one yet

The next year’s budget will be the largest in the history of Latvia and will exceed EUR 10 billion, said Prime Minister Krišjānis Kariņš in an interview to public broadcaster LTV programme Rīta Panorāma on Wednesday, 14 August.

The prime minister said that thanks to economic growth the budget will have increased EUR 500 million.

Commenting on slower economic growth, Kariņš said there is no reason for concerns – even if rates become slower, the economy continues growing. Nevertheless, funding increase brings with it other problems – ministries’ needs remain unchanged and budget money is more often viewed as a possible solution to resolve long-postponed problems. However, there are more needs than the budget can afford, the prime minister explains.

He admits that if had the final say in this, expenditures would be reduced and money would be reserved for «Black Friday». Unfortunately, the government is not prepared to do this and there is also the need to satisfy «legitimate interests of coalition partners».

More here

DECLINE:

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Shortage of workers in Latvia’s Emergency Medical Service remains serious

The shortage of workers in Latvia’s Emergency Medical Service (EMS) remains serious, and yet the service is able to deal with all challenges, said the service’s head Liene Cipule in an interview to public broadcaster LNT programme 900 seconds.

She stresses that there is a shortage not only in the emergency medical service but also the entire healthcare industry. This means the problem cannot be easily resolved using worker rotation. «We have to consider possible solutions – efficiency and quality – to compensate the shortage of resources with other methods,» says Cipule.

One of the solutions was the single-medic ambulance brigades, which had answered 7.5% of all calls for assistance in the first half-year of 2018. According to Cipule, work with single-medic brigades has proved that the service is able to sort calls based on priorities and such a concept does work.

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DECISION:

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Another one falls – Latvian FCMC halts PNB Bank’s operations

Operations of PNB Bank [formerly Norvik Banka] have been halted in Latvia, as confirmed by Finance and Capital Market Commission (FCMC).

The decision made by the commission provides for the bank to completely cease providing financial services, including completion of clients’ payments as of 21:00 on Thursday, 15 August. This measure was applied to prevent outflow of the bank’s finances.

FCMC reports that operations of PNB Bank were halted and deposits made inaccessible in accordance with decisions made by European Central Bank and Single European Resolution.

«On 15 August European Central Bank as the direct supervisor of PNB Bank decided to declare this institution as one that has either ended up or will end up in financial services. The Single European Resolution’s board has made the decision to not perform regulation of PNB Bank. This means performing no measures to stabilize the bank’s operations. Considering the aforementioned and to ensure security for the bank’s deposits, FCMC council has decided at a meeting to halt financial operations in PNB Bank and has decided on inaccessibility of deposits,» the commission says.

European Central Bank has made its decision having found that the bank has not complied with regulations and after having assessed the bank’s financial situation.

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CHANGE:

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Estonia decides to reform pension system; increase not promised

Helir-Valdor Seeder, leader of Estonian coalition party Isamaa, has confirmed that the government has agreed on his proposed pension reform, as reported by Estonian public media ERR.

Estonian Centre party, the Conservative People’s Party of Estonia (EKRE) and Isamaa have agreed to make the «second pillar» of Estonia’s pension system optional. The system in place since 2010 that provides for employees paying 2% of their wage to equalize their employer’s contribution (the so-called first pillar) is compulsory. Its critics say this system no longer matches the economy and that people should have more control over investment opportunities, including private pension funds (third pillar).

Abolishment of the «second pillar» was one of Isamaa party’s main promises during parliamentary elections. The government is now preparing to submit to the parliament a draft that would allow employees to choose to opt out of the ‘second pillar’. The vote on this topic could take place in autumn 2019, which means the law could come to force at the beginning of 2020.

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DISAPPOINTMENT:

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Lithuanian President Gitanas Nausėda

Lithuanian president unhappy with Latvia’s decision to purchase energy from Belarus

Lithuanian President Gitanas Nausėda has voiced sadness over Latvia’s decision to purchase electrical energy produced at Astravets nuclear power plant in Belarus not far from the Lithuanian border. He admits, however, that this decision was not unexpected for him.

According to Nausėda, Latvia made this decision without consulting with Lithuania’s Energy Ministry.

«Latvians made a political decision. As far as I am aware, there had been some consultations with Lithuania’s Energy Ministry, but the decision was made before consultations were concluded, which is why the only thing left in this situation is regret,» he told journalists in Berlin on Wednesday, 14 August.

Lithuania, which considers Astravets NPP unsafe, had previously hoped a boycott of its energy would help halt this project. However, other countries in the region and European Union institutions did not support this initiative.

In an attempt to reduce the risk for possible reduction of electrical capacity or negative tariff fluctuations, the Cabinet of Ministry supported Economy Ministry’s proposal on organization of energy trade with third countries, which provides for transferring energy trade to Latvia’s border «the moment when Lithuania will have ceased electricity trade with Belarus».

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EXPLANATION:

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Riga City Council permitted to elect mayor after two-month deadline

In spite of the fact that 21 August will mark two months of Riga City Council working without a mayor, a condition that permits Latvia’s Saeima to dismiss the entire city council, deputies of the municipality will nonetheless have the right to elect a mayor after the deadline, says Environment Protection and Regional Development Minister Juris Pūce’s advisor for legal affairs Valdis Verners.

If a city council works without a chairman for two months, the Cabinet of Ministers can initiate a request for the Saeima to dissolve such a city council. Nevertheless, even after the deadline members of the city council will still have the right to elect a new mayor because they do not lose their status, he explains.

«In accordance with the Law on Local Governments, they are able to hold city council meetings and make decisions, including the political decision on election of a new city council chairman,» explains Verners.

If a new chairman is elected, the Saeima loses its right to dismiss the city council.

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FIGHT:

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State Real Estate claims ReRe Būve 1 may be trying to circumvent the law

Construction company Rere Būve 1 publicly voices desire to continue implementing the construction contract. However, the construction company’s submitted work schedule for reconstruction of New Riga Theatre has everything changed – volume of work, terms and budget, Latvian State Real Estate (SRE) reports.

«If major conditions of the contract change or increase, SRS believes the construction company thereby wants to sign a new contract without a tender instead of continuing the existing one,» stresses SRE board chairman Andris Vārna.

«This makes it possible to believe it could be an attempt to circumvent the Public Procurement Law. SRE cannot allow this.»

On top of that, Rere Būve 1 refuses to voluntarily leave New Riga Theatre construction site. SRE believes Rere Būve 1 may attempt to secure a ban on future construction work on New Riga Theatre.

SRE also notes that with the schedule Rere Būve 1 expects not only extension of the term from two years to four but also an increase of necessary funding. The new proposed plan also includes tasks that were carried out before. This includes construction of trolleybus contact lines. According to the construction company’s offer, this is planned to be done in April and September 2020. In reality, this task has already been accomplished and all relevant documents have been signed, SRE reports.

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CONCERNS:

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SRS Tax and Customs Police director Kaspars Podiņš

No shame. SRS Tax and Customs Police used for political hits – employees say

Performing different orders, score-settling, double standards, distortion of facts – such criticisms have been directed to State Revenue Service’s Tax and Customs Police Department director Kaspars Podiņš by the institution’s employees in their letter to SRS director general Ieva Jaunzeme.

«We turn to you with an application because at the beginning of the year the entire team had witnessed director Kaspars Podiņš performing different political orders, preventing investigations of commenced criminal processes and punishing workers who refused to comply,» the letter mentions.

«Every day we have to face his double standards and fact distortion. On top of that, without any shame whatsoever, SRS Tax and Customs Police are used to perform political orders.»

The letter also mentions that more and more often the press voices concerns about political involvement of state law enforcement institutions and their use in political score-settling. Jaunzeme also received some blame – instead of acting, she is accused of saving her own skin, so to speak.

«While you are too busy fending for yourself, seen and unseen people in Tax and Customs Police Department’s corridors are organizing criminal processes left and right.»

SRS employees described an entire scheme in the letter: «A brief explanation about this system for those uninformed: person-X issues a request for a criminal process; to commence it there have to be an unlikely report detailing suspicious dealings, partners or at least a story, no matter how stretched and baseless, that there could be signs of illegal activity.

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Week in Lithuania: Transport Minister breached law, Vilnius University elects new rector, Polish bank invited

In Lithuania, the top news stories were Transport Minister being found guilty over the violation of law, President Nausėda inviting Poland’s Pekao bank to Lithuania and Vilnius launching its ecological initiative.

BNN summary of the week: Moneyval report. Scandal over VDD building. Žagars and Kairišs at the helm of Dailes theatre

It seems the repair efforts for Latvia’s financial market have paid off. Moneyval published its report this week, which concludes Latvia has successfully completed recommendations for tidying its finance sector. There are still areas in need of improving, but there is room for hope Latvia will not be grey-listed.

Development of areas along Rail Baltica line will require investments worth EUR 300 million

In order to implement infrastructure development projects along Rail Baltica line in Riga, it will be necessary to secure investments up to EUR 350 million in the next ten-year period, as reported by Riga City Council chairman Oļegs Burovs.

Olainfarm shareholders fail to convene due to lack of quorum

Because of the lack of quorum, the extraordinary meeting of Olainfarm shareholders originally scheduled for Friday, 24 January, did not take place. It was planned to discuss changes to the company council during this meeting, as reported by the company’s representative Ieva Lapiņa-Ennīte.

EY: investors more optimistic about Latvia’s economic competitiveness

Last year, investors’ opinion of the competitiveness of Latvia’s economy improved for nearly all indexes, as reported by EY Latvija representatives.

Bulgaria accuses three Russian citizens for poisoning of arms producer

Three Russian citizens have been charged by Bulgaria over the attempted murder of an arms producer and another two Bulgarians using a poison. One survivor believes there is a link with the poisoning of the Skripals in the United Kingdom.

Ignoring sanctions, Ventspils City Council approves budget created under Lembergs’ watchful eye

In spite of sanctions imposed by USA, Ventspils City Council approved the city’s budget for 2020, which came to be under absolute influence from Aivars Lembergs, on Thursday, 23 January, BNN was told by opposition deputy Aivis Landmanis.

Estonia eyes one-year prison sentence for first-time drunk drivers

Estonian government ministers have proposed harsher sanctions for drunk driving. Their initiative comes after three people got killed in a crash, where a heavily intoxicated driver was involved.

Latvian residents trust National Armed Forces the most and the Saeima the least

Latvia’s residents trust the country’s National Armed Forces and the president the most and the Saeima the least, according to the survey performed by Latvian National Security Academy’s Security and Strategic Research Centre.

In China, coronavirus claims more lives as transport limitations put in place

The Chinese outbreak of a new strain of coronavirus has reached the death toll of 26 people, meanwhile, authorities are trying to keep it from spreading introducing transport movement limitations in at least 10 cities.

Information about VDD new office building’s construction costs is a state secret

Although some media have mentioned different amounts of money the construction of a new office for the State Security Service at the location of former Marss cycling track may cost, the service reports that this information is considered a state secret.

Kariņš: Latvia is no longer the younger brother – our country’s voice is heard

Latvia is no longer the younger brother on the international arena – our country is heard and its opinion is taken seriously, said Latvian Prime Minister Krišjānis Kariņš at annual foreign policy debates on Thursday, 23 January.

Poland passes law on limiting public actions, statements of judges

The Polish Sejm has passed a draft law that sets forth limiting the say of judges over justice appointments, court reform and politics. The limitations have been widely criticised abroad.

Linkaits: banks once again service Ventspils Freeport terminals

The situation with Ventspils Freeport is gradually becoming more relaxed. On top of that, banks once again service port terminals there, as Latvian Transport Minister Tālis Linkaits affirmed in a conversation with journalists on Thursday, 23 January.

Aivars Lembergs picks ex-prime minister’s freelance advisor Grudulis as his lawyer for debates

The suspended Mayor of Ventspils Aivars Lembergs, who is also accused of committing serious crimes and is under US sanctions, has picked once the prime minister of Latvia Māris Kučinskis’ freelance advisor Māris Grudulis as his lawyer for debates in court, as was announced in court on Thursday, 23 January.

What is Lithuanian President’s main reason to skip Jerusalem Holocaust forum?

Lithuanian President Gitanas Nausėda has unexpectedly flip-flopped on where and how to commemorate the 75th anniversary of the liberation of Auschwitz-Birkenau death camp in Poland. First, he said he will attend the commemoration in Jerusalem, but then changed his mind to pay homage to the Jewish victims in Auschwitz, in Poland. The reason? Well, there is no clear official reason for that – President’s Office did not provide one.

Audit: Rail Baltica slowed by poor risk management and slow progress with municipalities

Delays and cost increase of Rail Baltica project is heavily affected by no risk management and no strategy, as well as slow progress in cooperation with municipalities and passive alienation of properties, Latvian State Audit concluded in its latest report.

China stops public transport in two cities over coronavirus

In China, a new strain of coronavirus has claimed the lives of 17 people. To keep it form spreading, local authorities have stopped the public transport to and from the cities of Wuhan and Huanggang.

BNN investigation | Rebenoks and Krieķis may have plans to return to Olainfarm board despite ties to serious crimes

Ex-Olainfarm officials Mārtiņš Krieķis and Pāvels Rebenoks, the latter also serving as Latvian Economy Minister Ralfs Nemiro’s advisor, may return to the company’s board to, possibly, continue walking «well-travelled path» paved with non-transparent deals, according to information available to BNN.

In Estonia, forgetting to register child’s name can lead to municipality choosing it

Estonian law obliges parents to register the name of their child in a month’s time after giving birth. In the unlikely case of them being late, the law opens right to a local municipality to choose it.

Change of concept? Viesturs Kairišs becomes Dailes Theatre’s artistic director

Dailes Theatre’s board member Juris Žagars has picked Viesturs Kairišs as the theatre’s new artistic director, as journalists were told by Žagars on Thursday, 23 January.

Lukashenko: Belarus needs to diversify its oil imports, introducing Baltic supplies

As Minsk and Moscow are in talks to solve a dispute over the continuation of oil imports from Russia, Belarusian President Alexander Lukashenko has said that Russian supplies could be cut to 30-40% of Belarus’ total imports.

Minister does not exclude possibility of number of municipalities in Latvia increasing

The Administrative Territorial Reform offers reducing the number of municipalities to 39 in Latvia. Still, it is possible there may be one or two more, said Latvian Environment Protection and Regional Development Minister Juris Pūce in an interview to LTV programme Rīta Panorāma on Thursday, 23 January.

Thirteen people die from influenza in Latvia

Three people died from influenza in Latvia last week, increasing the number of victims to 13 for this year’s flu season, according to monitoring data of acute upper respiratory tract infections published by Disease Prevention and Control Centre.

Lithuania tries to halt haulage firm exodus to Poland with new tax

Lithuania is introducing a new «exit tax» to keep road haulage firms from relocating to other European Union member states. The firms say that other ways of moving business abroad will be used.


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