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Wednesday 24.04.2019 | Name days: Nameda, Visvaldis, Ritvaldis
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BNN summary of the week: MPC system’s end; Rimšēvičs’ replacement; Latvia’s free finance market

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUBNN offers a summary of this week’s topical news in a variety of categories: Future; Fight; Announcement; Change; Growth; Discussion.

FUTURE: Minister says Latvia may drop using MPC system in the next three years’ time

Latvia may completely cease using the mandatory procurement component system, as confirmed by Economy Minister Arvils Ašeradens.

This proposal was supported this Wednesday by the ministry’s work group that has worked on ways to cancel MPC system these past several months.

To abolish the system, the ministry proposes restoring subsidized electricity tax at 15% in 2019 and establishing new requirements for biogas plants on minimal food waste and other organic waste ratio.

It is also planned to reform power output payments, forming changes to its administration, establishing a requirement for power stations to include ancillary services to the transmission system to reduce consumers’ payments.

Full article here

FIGHT: Bank of Latvia governor will appoint his replacement at ECB; will contest prosecutor’s decision first

Bribery accused governor of the Bank of Latvia Ilmārs Rimšēvičs intends to name his replacement in the European Central Bank Council. However, doing this is impossible at this time, because he first has to contest the decision of the Prosecutor General’s decision in regards to the investigation, said Rimšēvičs’ lawyer Saulvedis Vārpiņš.

Defence believes Latvia’s has failed to complete European Union Court’s order on interim injunction, because approval of a new representative is legally impossible in a situation when the governor or the Bank of Latvia remains applied with a security measure – restriction to perform his duties, said lawyer Saulvedis Vārpiņš.

He added that the EU Court «made it clear with its order that Latvia has to halt the security measure so that Rimšēvičs is able to appoint his replacement in ECB in accordance with regulations.»

Approval of a replacement member of the European Central Bank differs from simple provision of authority, because the governor of a central bank first has to be able to access information system and information about developments on the world’s financial markets, said Vārpiņš.

Before approving a replacement representative in ECB, the governor of the Bank of Latvia needs to have access to matters discussed during meetings of ECB Council, as well as meet with central bank’s specialists to discuss positions in certain matters, added Vārpiņš.

«Unfortunately, instead of approving a replacement in ECB to ensure continued function of the organization, Rimšēvičs if forced to appeal the decision made by the Prosecutor General in court,» said the lawyer.

Full article here

ANNOUNCEMENT: Air quality in Ventspils on par with the rest of Latvia

«Concentration of PM10 particles in air in Ventspils does not exceed the average index across Latvia, which means the air in the port city is not worse than average in Latvia,» says SIA Estonian, Latvian & Lithuanian Environment board member Aiga Kāla.

BNN had previously reported that the topic of air quality has been a very hot topic in Ventspils these past couple of weeks. Many complaints have been received from Ventspils residents about the presence of coal particles in the air, which can be explained with unusual weather conditions in the city. Other complaints detail the horrible smell coming from SIA Bio-Venta.

On 31 July, representatives of Ventspils Commercial Port (VCP) and State Environment Service decided to meet with residents of Ventspils.

«There is a lot of misleading information reported by the media in relation to dust and the effect it has on human health. Those are coal (not dust) particles. They are 10 μm larger than dust particles and cannot enter the human body. Therefore they cannot impact human health,» said SIA Estonian, Latvian & Lithuanian Environment board member Aiga Kāla at the beginning of the meeting.

She added that «large particles visible with the naked eye can cause some discomfort, but they do not end up in our lungs». To fix this situation, Ventspils Commercial Port considers using snow cannons to create a fog-like barrier from the side of the docks. VCP Technical Director Māris Lieģis said during the meeting that the port also has plans to set up more platforms with snow cannons to create the ‘water wall’. He mentioned visiting Klaipeda, where his Lithuanian colleagues also tried using snow cannons in summer.

Representatives of the State Environment Service stressed time and time again that no environment pollution is found in Ventspils. «As confirmed by Ventspils regional environment office, there have been ten cases of PM10 particle concentration exceeding permitted levels at the coal loading complex in the first six months. Not a single case was registered in July. Permitted concentration level of PM10 particles in residential areas is 50 μm/m3. The highest concentration level recorded in Ventspils in July was 21.7 μm, and it was recorded only once. In other days, concentration levels varied from 3.1 μm to 18.7 μm. This means no pollution was recorded in Ventspils,» as BNN was previously told by State Environment Service deputy director general Aina Stašāne.

Measurements are provided by Latvia’s Environment, Geology and Meteorology Centre’s laboratory and State Monitoring Network, which provides data monitoring. Environment, Geology and Meteorology Centre is responsible for air quality measurements across all of Latvia, as well as maintenance of observation stations, performance and quality of measurements.

Full article here

CHANGE: Acting SRS manager says the next head of service should be someone «worth following»

Can the State Revenue Service be trusted? Who benefits from SRS remaining with no head? Do people see any point in paying taxes, and why is it necessary to take care of SRS employees? BNN asked acting SRS director Dace Pelēka.

Why is it so hard to find a director general for SRS?

Latvia’s State Revenue Service was founded in 1993. For 25 years the institution has been monitoring taxes and taxpayers. According to Dace Pelēkā, Latvia’s SRS is a multi-functional institution. However, the seat of the head of SRS has remained vacant ever since the unexpected passing of the last SRS director general Ilze Cīrule in March.

Dace Pelēkā admits the last director of SRS Ilze Cīrule, who had entered the service with new ideas, had provided employees something of a shock therapy. Nevertheless, in certain matter she asked questions no one else had asked before her.

«After years of working in state administration, it became necessary for us to look at certain matters from a completely different viewpoint. Now that SRS has no director, we continue what was started during Ilze Cīrule’s term, because the tasks entrusted to us are challenging and require a lot of time.» She adds that SRS has not stopped for a moment in its work and development in the past half-year.

When asked if there are people who benefit from the service remaining without a head, Pelēkā said no. «Finance Ministry Dana Reizniece-Ozola has mentioned that it would be best not to organize the selection process before elections. I agree, because it is clear that during the pre-election period some candidates may unwillingly become part of some political party’s campaign.»

Dace Pelēkā does say: «There is no reason to doubt the necessity of a leader for an institution like SRS. The role of a leader in motivating workers is incredibly important. Workers want to see a person worth following as their leader.»

Full article here

GROWTH: Finance Commission says Latvia’s business sector has gotten rid of unwanted shell companies

As of 7 July 2018, the ratio of deposits from risky shell companies in Latvia’s banking sector was 0.03%. Most of this amount consists of the remaining balance of funds exiting the country, as reported by Finance and Capital Market Commission.

9 May marked the coming into force of amendments to the Law on the Prevention of Money Laundering and Terrorism Financing, which required participants of Latvia’s finance sector to cease working with businesses that fit two signs of shell formations – perform no actual business activities and have no economic value, or be registered in a country that has no requirement for submission of regular financial accounts.

«Now we can safely say our banks have performed their task to the letter. Only 0.03% or EUR 4.5 million is left – the money blocked on frozen accounts that require additional checks to determine their origin. We can clearly see the work that commenced in 2016 still continues. The proportion of risky clients continues reducing every day, because banks continue terminating ties with shell formations that are not prohibited yet but still carry certain risks for banks. We can conclude that in relation to shell companies, and not just their prohibited types, around EUR 1.5 billion have left Latvia’s banking sector in the first half-year of 2018. Cooperation has been denied to more than 9,000 different kinds of shell companies,» says FCMC chairman Pēters Putniņš.

Full article here

DISCUSSION: Latvian government starts talks on applying reduced VAT on public catering

Finance Ministry has reached a conceptual agreement on applying on restaurants a reduced 12% value added tax rate instead of the current 21% under the condition that catering companies are to cease paying employees envelope wages, LNT reported on Wednesday, 1 August.

Catering companies have been trying to secure tax benefits for a long time now. Jānis Jenzis, president of Association of Hotels and Restaurants of Latvia, said the excessive tax burden has already caused the closure of some prominent restaurant in Riga.

Estimates from Finance Ministry show that more than 40% of people employed in the industry are not even paid minimal wages. For there to be a general agreement regarding the minimal wage level for people employed in the industry, the document needs to be signed by companies that together employ at least half of people working in the industry and whose total turnover exceeds half of the entire industry’s turnover. The president of the association said he hopes the signing of the agreement is a matter of time.

Finance Minister Dana Reizniece-Ozola said reduced VAT may be applied to the industry only if catering companies cease paying envelope wages. «If the industry signs a general agreement detailing a specific wage level for each profession, then we could conceptually support reducing VAT,» said the minister.

Full article here


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Medicines for people with mental disorders to become more accessible in Latvia

To improve accessibility of medicines for people suffering from psychological and behavioural disorders, Latvia’s government decided to expand the list of diagnoses eligible for state-compensated medicines on Tuesday, 23 April.

Belarus halts exports of low quality oil products to Baltics, other neighbours

Belarusian Oil Company has announced the temporary suspension of light oil products to the Baltic states, Poland and Ukraine explaining that low-quality oil products have been supplied by Russia to Belarusian refineries.

Producer prices in Latvia: increase of 4.1% in March

Compared to March 2018, average level of producer prices in Latvian industry increased by 4.1 % in March 2019. The level of prices of products sold on the domestic market rose by 6.5 % and that of exported products – by 1.9 %.

Saeima deputy confident on the need to dismiss National Mass Media Council

Considering recent development, the National Electronic Mass Media Council should be dismissed, says head of Saeima’s Human Rights and Public Affairs Committee Artuss Kaimiņš.

Estonian President continues to meet with ministerial candidates

As outgoing Estonian Prime Minister Jüri Ratas' is likely to form his second government with the controversial Conservative People's Party of Estonia and the national-conservative Pro Patria, Estonian President is meeting with his ministerial candidates.

Teachers demand from Latvia’s ministry specific amendments to regulations

Latvian Trade Union of Education and Science Employees sent a letter to Latvia’s Education and Science Ministry on Tuesday, 23 April. In it, representatives demand strict guarantees and specific amendments to regulations to ensure increase of wages for teachers in accordance with the schedule.

Catalonia – key issue in Spanish pre-election debate

As Spain nears its early general election on Sunday, April 28, its outgoing Prime Minister faced criticism from his opponents over Catalonia's secession crisis.

Latvian minister orders closure of Deglava Bridge in Riga

Latvia’s Interior Affairs Minister Sandis Ģirģens has ordered State Police to close down Deglava Bridge starting with Thursday, 25 April.

Sri Lanka death toll rises. Authorities had been warned about possible attacks

In Sri Lanka, the number of people killed in attacks on churches and hotels has reached 290 people, while it has been revealed that national authorities had been warned about possible attacks.

Road construction company Binders to attract workers from Ukraine and Belarus

Latvian road construction company SIA Binders experiences a shortage of workers. Because of that, the company plans to attract guest workers from Ukraine and Belarys, says Bindars board chairman Aigars Sēja.

Ukrainian presidential election won by Zelensky on hopes of change

The run-off of the Ukrainian presidential election has been won by comedian Volodymyr Zelensky, who has promised change and better relations with Russia.

Air temperature to reach +23° C in Latvia this week

Dry weather will remain in most of Latvia this week. The sun will shine often and there will be slow eastern and south-eastern wind. However, strong wind is expected to come on Wednesday, 24 April, and precipitation is expected at the end of the week.

Forevers: 615 tonnes of grilled meat was consumed in Latvia last year

615 tonnes of meat products for grilling was sold in Latvia in 2018, according to sales data from meat processing company Forevers.

Every day hens in Latvia produce an egg for every resident

The number of laying hens in Latvia, when compared to 2017, had increased 19.2% in 2018, reaching 3 million, according to data from the Central Statistical Bureau of Latvia. Compared to the previous year, the total number of domestic birds has increased 9.3%, reaching 5.4 million, which is the largest index since 1992.

73% of residents believe they benefit from Latvia’s membership in EU

Approximately 73% of residents believe Latvia benefits from membership in the European Union. Interviewed residents mainly outline job opportunities, economic growth and security, according to the latest data compiled by Eurobarometer.

General government budget deficit in Latvia reached EUR 295.4 million last year

In 2018 general government budget deficit accounted for EUR 295.4 million or 1 % of the Gross Domestic Product and general government consolidated gross debt amounted to EUR 10.6 billion or 35.9 % of the GDP.

Egils Levits optimistic about his chances becoming Latvia’s president

Presidential candidate and European Court of Justice Judge Egils Levits is optimistic about his chances of becoming Latvia’s next president.

Estonia’s government to be formed by standing Prime Minister Jüri Ratas

On Thursday, 17 April, Estonia’s parliament entrusted formation of the country’s government to Centre Party’s chairman and standing Prime Minister Jüri Ratas.

At least 29 die as German tourist bus runs off road in Portugal

At least 29 people were killed and 27 were injured when a German tourist bus ran off the road on Madeira Island in Portugal, as reported by BBC.

EY: businessmen show very positive outlook towards global economy

The latest Ernst&Young EY Global Capital Confidence Barometer reveals a generally optimistic outlook businessmen have around the world – 93% of interviewed company CEOs believe the economic situation in the world is steadily improving. The same opinion was voiced by 73% of interviewed CEOs last year.

Orkla Latvija signs contract for construction of Laima manufacturing plant in Ādaži

On Wednesday, 17 April, Orkla Latvia signed a contract worth EUR 8.9 million with construction company Merks on the construction of a Laima manufacturing plant in Ādaži, BNN was told by Orkla Latvija representative Lineta Mikša.

As police arrive, Peru’s ex-president commits suicide

Ex-president of Peru Alan García committed suicide on Wednesday, 17 April, when police arrived to arrest him for corruption.

Estonia’s president to meet with Putin; the two will discuss Baltic security

On Thursday, 18 April, Russia’s President Vladimir Putin will meet with Estonia’s President Kersti Kaljulaid, as reported by Estonian public media ERR.

Europe’s borders to be reinforced – a specialist corps to be formed by 2027

On Wednesday, 17 April, the European Parliament approved a new law to strengthen Europe’s border and coast guard, as reported by EP representative in Latvia Signe Znotiņa-Znota.

Latvian residents engage in marriages more often than before

Over the past three years the number of registered marriages has risen slightly. In 2018, 13.4 thousand marriages were registered, which is 200 marriages more than in 2017 when the increase recorded over the year constituted 148 marriages.