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Ceturtdiena 19.09.2019 | Name days: Verners, Muntis
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BNN summary of the week: NATO to increase and ABLV Bank loses its license

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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; Deal; Fight; Decline; Decision; Opinion.

FUTURE: Latvia will not escape talks on increasing defence spending

It is necessary to develop Latvia’s defensive capabilities. Because of that, Latvia cannot escape talks on increasing defence spending to more than 2% of GDP, said Defence Minister Raimonds Bergmanis, who is participating in the NATO summit in Brussels.

Bergmanis believes any country can increase defence spending as long as there is political commitment and support. There are many defence ministers in the world who want an increase of funding for their industry.

Information previously provided by Defence Ministry shows that Latvia’s defence budget was 1.4% of GDP in 2016 and 1.7% in 2017. This year, Latvia’s defence budget reached 2% of the country’s GDP. This year’s defence budget is EUR 576.34 million, which is EUR 126.8 million more than last year.

«Many countries will continue developing armed forces, because 2% of GDP is the minimum required for defence. We cannot escape talks on increasing defence spending,» said the minister.

Facing modern threats, Latvia continues developing its armed forces and improving host country capabilities, which will require funding. «We will also require additional funding to station NATO’s Multinational Division North headquarters at Ādaži base. We have several projects planned. However, we have to keep in mind that costs tend to change,» said the minister.

Full article here

DEAL: Competition Council permits merging of two energy wholesale traders and producers

On 4 July, Latvia’s Competition Council decided to permit the merging deal as a result of which Enefit Green AS will gain decisive influence over Nelka Energia AS by purchasing 100% of the company’s shares. Permission was given because the merge is not expected to have a major impact on competition on the market, the council explains.

Both participants of the merge are registered in Estonia. Both indirectly own and manage biomass co-generation power plants in Latvia. Those plants produce heating and electrical energy: Enefit Green AS owns SIA Enefit Power in Valka and Heat Valka. Nelja Energia AS owns subsidiary SIA Technological Solutions in Brocēni. Enefit Green AS is owned by Eesti Energia AS, which is an Estonian state-owned international energy company.

Full article here

FIGHT: ECB revokes Latvian ABLV Bank’s credit institution license

European Central Bank has decided to revoke Latvian ABLV Bank’s license, as confirmed by Finance and Capital Market Commission.

ECB made its decision following a proposal from FCMC. The proposal was submitted to the bank after ABLV shareholders decided to commence the bank’s self-liquidation process and FCMC’s 12 June decision to permit it.

FCMC Chairman Pēters Putniņš: ‘This was a planned and logical step for the bank’s self-liquidation process. It will not affect the process in any way. FCMC continues monitoring the self-liquidation process in accordance with the previously approved plan.’

On 12 June, FCMC submitted to ECB a request to revoke ABLV Bank’s license. ECB’s decision came to force 11 July.

The liquidator published an announcement about the commencement of the bank’s self-liquidation process in Latvian Herald on 18 June. It was the beginning for a three-month term for creditors to submit their requests. Creditors continue submitting requests. Revoking of the bank’s license will not affect this process.

FCMC’s controlled voluntary bank liquidation process is a solution that provides the widest possible involvement from FCMC and provision of control, the commission adds.

ABLV Bank’s self-liquidation process is managed by – Arvīds Kostomārovs, Andris Kovaļčuks, Elvy Weber and Eva Berlaus.

Full article here

DECLINE: Skycop says airline strikes picking up in strength; losses reach six billion

Compared to the previous year, 2018 so far has not been successful. Fuel prices have increase, as have employee strikes, which continue creating serious problems for European airlines, as BNN was informed by representatives of flight compensation request processing company Skycop.

The company reports that European Organisation for the Safety of Air Navigation, or Eurocontrol, CEO Eamonn Brennan has mentioned that the large number of airline employee strikes has significantly impacted flight arrival accuracy. Data compiled for April details specific strikes that had a major impact on the accuracy of airline operations.

«Although 2017 was a challenging year for the aviation industry, it is still considered a successful year, because the industry had experienced the most rapid passenger turnover increase since 2004. Based on data from ACI Europe, the number of travellers has grown 8.5% over the course of the year. The biggest problems, on the other hand were caused by shortage of pilots and consolidation of European airlines. Continued increase of air passenger numbers is expected this year, as well. However, topical problems with airline operations and continuing strikes make it hard to believe airlines will be able to meet the growing demand,» Skycop representatives say.

The largest number of strikes took place in February. In majority of those cases, participants were from Italian and French airlines. Skycop notes that Air France has suffered fourteen strikes so far. As a result, share value has dropped 9.7% and the company has suffered losses worth more than EUR 300 million. In Italy, there have been three strikes in total this year. All of them had a major impact on airline operations, causing many flights to be delayed or cancelled.

Full article here

DECISION: Canada decides to extend rule over NATO multi-national battalion in Ādaži for four years

Canada has decided to extend its rule over NATO’s multi-national battalion stationed in Latvia for four more years, Canada’s Prime Minister Justin Pierre James Trudeau confirmed at a press-conference.

The previous end term was 2019. Not it has been extended for four more years, said Trudeau after his meeting with Latvian Prime Minister Māris Kučinskis.

Latvia’s prime minister admits that this decision from Canada is a great gift for Latvia on its centenary.

The objective behind expanded presence of NATO forces is improving existing deterrence and security capabilities, demonstrating the alliance’s solidarity and determination to protect member states from any forms of aggression. A festive welcoming ceremony was held at Ādaži base on 19 June 2017.

Full article here

OPINION: it is impossible for Latvian parties to attract large funding honestly

«If we look at political parties’ ability to attract funding from large companies, for example, conclusions are rather sad – there is no way for parties in Latvia to attract funding in an honest way,» Providus think tank researcher Iveta Kažoka said in an interview to BNN.

She continues: «It is a fundamental problem for Latvian parties. During discussions at Lampa festival this matter was mentioned by nearly all participating parties off-camera that this is a matter in need of resolving».

In 2015, Estonian parties divided amongst themselves EUR 5,400,000. Lithuanian parties divided EUR 5,800,000. Latvian parties, on the other hand, received EUR 612,398 from the state budget, which is approximately nine times less than the amount provided to neighbours.

Kažoka explained that parties either have to make do with scraps, which is not nearly enough to work successfully, or resort to scheming. «Often they are caught red-handed with their schemes – law enforcement institutions take notice of their activities.» She also adds that most of the time, however, institutions like Corruption Prevention and Combating Bureau fail to notice political parties’ schemes.

There has to be funding to sustain a party

«To reach out to voters, there has to be some funding – to pay for visual materials, to sustain the party and communicate with 500 members and organize their work. Without resources, this cannot be done efficiently,» says the researcher.

She says the situation in Latvia is absolutely dramatic in the context of the Baltic region. «Funding for parties is ten times lower. At the same time, Latvian society is not less demanding. We expect parties to be less corrupted and be able to provide quality political programmes and experienced people in different sectors for ten times lower funding.»

«Parties do become corrupted. Because of that, it is necessary to think of a way to reduce pressure on Latvian parties and prevent them from looking for funding in corrupted sources. But the only solution that works in the European Union and the world is providing sufficient funding to parties from the state budget,» says Kažoka.

Full article here


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Sigulda municipality turns to police over infection cases in kindergartens

Sigulda municipality has turned to State Police to investigate the link between last week’s uncovered intestinal infection cases, including four infection cases involving salmonella bacteria, as confirmed by the municipality.

Latvian Saeima supports tighter mutual cooperation with USA in rights protection

On Thursday, 19 September, Saeima supported in the second and final reading a legislative draft, approving the September 2004 agreement for tighter cooperation between the Republic of Latvia and the United States of America for protection of rights.

Candidate: FCMC team should learn to work substantially, not formally

The team of Latvia’s Finance and Capital Market Commission should learn to work substantially, not formally, said the candidate for the post of chief of FCMC and Citadele Bank board member Santa Purgaile at a press –conference on Thursday, 19 September.

Lithuanian analysts on Russia-Belarus unification plan: actions louder than words

The announcement by Belarus and Russia this week of their entering into an economic confederacy by 2022 did not go unnoticed in Vilnius, which is courting the idea of recharging its dusty relations with Minsk. Is it just the Slavic countries’ new attempt to fulfil the endeavour?

Russia holds traditional holy man, who sought to drive out Putin

A Siberian shaman, who was on his way to Moscow, to «banish» Russian President Vladimir Putin, has been detained, Russian police has stated.

Costs for delivery of printed press to be compensated in Latvia

On Thursday, 19 September, Latvia’s Saeima supported in the second and final reading amendments to the Postal Law, which provide delivery of printed press under subscription in 2020 under the same rules and conditions that are in force now.

Saeima says state of emergency in Riga’s waste management sector is justified

Latvia’s Saeima has approved the decision made by the Cabinet of Ministers on declaring a state of emergency in Riga’s waste management sector.

Lithuanian PM’s lymhoma treatment met with solidarity by Health Minister

Lithuanian Health Minister has shaved his head expressing solidarity with Prime Minister Saulius Skvernelis, who is being treated against cancer.

Finance and Capital Market Commission applies a considerable fine on PrivatBank

Latvia’s Finance and Capital Market Commission has applied a fine of EUR 1.019 million on AS PrivatBank for violation of the Law on the Prevention of Money Laundering and Terrorism and Proliferation Financing, as confirmed by FCMC Communication Office.

Estonia to pay tens of thousands to municipalities for military training grounds

300 000 euros – such is the sum the Estonian Defence Ministry has undertaken to pay every year to nine municipalities in the territory of which training grounds of the Estonian Defence forces are located.

Competition Council: Riga City Council takes no responsibility for its own mess

«It is unfortunate that Riga City Council has involved others in resolving its own negligent problems without taking any responsibility. Competition Council has issued multiple warnings to make Riga City Council to prepare and prevent the very situation we are in now,» says Competition Council chairperson Skaidrīte Ābrama in regards to the state of emergency declared in Riga.

In Fukushima negligence case, company executives acquitted

A court in Japan has acquitted in a case of alleged negligence as to the 2011 Fukushima nuclear disaster three executives of a power company.

Millions intended for National Acoustic Concert Hall to be spent for other needs

The EUR 23 million allocated by European structure funds for the construction of the National Acoustic Concert Hall, and which were planned to be used for the reinforcement of AB Dam, have been divided for other needs, said Latvia’s Culture Minister Nauris Puntulis.

Finland: 12 days left to UK to submit Brexit amendments

Anti Rinne, the Prime Minister of the presiding country of the European Union, has warned the United Kingdom that it has 12 days to submit proposals to amend the existing withdrawal agreement.

Latvian minister promises to control municipalities’ loans more strictly

The loans taken by municipal companies from the State Chancellery for construction of different infrastructure projects will be evaluated and controlled more carefully, promised Latvia’s Environment Protection and Regional Development Minister Juris Pūce at a press-conference on Wednesday, 18 September.

Police to investigate intestinal infection cases in Sigulda’s kindergartens

On Tuesday, 17 September, Latvia’s State Police commenced a criminal process over the intestinal infection cases observed at kindergartens in Sigulda.

New MEPs express support to EU stance on Brexit in resolution

The new composition of the European Parliament has passed a resolution pledging to reject any withdrawal agreement of the United Kingdom without a backstop and readiness to support a withdrawal extension if the UK requests it.

Estonia wants quicker tobacco price hike and small brewery expansion

Estonian Finance Ministry has tabled proposals to increase excise tax on tobacco products and to allow small breweries to expand, while keeping tax deductions.

State Audit bashes Latvian municipalities for irresponsible loans and massive projects

The practice when many Latvian municipalities borrow money from the state budget to finance excessive and unnecessary construction projects demonstrates short-term thinking and irresponsible attitude towards their future costs, as concluded by State Audit.

Estonian tech firms agree to become climate neutral by 2030

33 Estonian computer technology firms have sealed a Green Pledge at Tallinn Digital Summit, promising to change their operations to a completely environmentally sustainable basis by 2030.

Latvian government allocates considerable finances for ministries’ priorities

The government has decided to allocate an additional amount of EUR 173.0 million from the 2020 budget to finance priorities of ministries and independent institutions.

Lithuanian farmers ditch milk farming due to low milk price

In Lithuania, milk purchase prices are so low that small and medium-sized farms have found it unfeasible to operate and 12% of all milk farms have seized to exist over the past year, LRT reports.

Latvian prime minister urges audit of catering services at education institutions

Following the news about intestinal infection cases in Sigulda and the violations uncovered by the Food and Veterinary Service at nearly all education institutions there, an inspection will be proposed to check the quality of catering services at other education institutions, said Prime Minister Krišjānis Kariņš.

Whistleblower Snowden’s new book targeted by U.S. lawsuit

American whistleblower Edward Snowden has released a new book and on the day of its publication the U.S. government has filed a lawsuit against the book to «recover all proceeds» from its sales.

Latvian government greenlights continuation of territorial reform

In spite of objections from many municipalities, Latvia’s government decided on Tuesday, 17 September, to support Environment Protection and Regional Development Ministry to reduce the number of existing municipalities from 119 to 36.