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Ceturtdiena 05.12.2019 | Name days: Sabīne, Sarma, Klaudijs
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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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VID officials will need to have spotless reputation, Saeima decides

From now on, officials of the State Revenue Service (VID) will need to have a spotless reputation. This is decided by Saeima’s amendments to the Law on State Revenue Service approved in the final reading on 5 December, as BNN was told by Saeima’s press-service.

Brazil at risk of losing vote in UN General Assembly because of high debts

There are risks that because of failure to pay its debts to the United Nations Organization, Brazil could lose its voting rights in the UN General Assembly, Reuters reports.

Strained Lithuanian budget is desperate for additional sources of revenues

With the adoption of the new year’s budget skidding, two major professional groups – teachers and doctors – have had this week their demand for higher salaries satisfied, thus deepening the holes in the shallowing budget. Where to scoop up money to patch all the gaps and satisfy all the demands? This week, Seimas, Lithuanian legislature, was in a frantic search for additional sources of revenues.

Estonian Police and Border Guard Board official detained on suspicion of embezzlement

Estonian Internal Security Service has detained a senior officer of Police and Border Guard Board at the South Prefecture on suspicion of document forgery and embezzlement of more than EUR 250 000, as reported by Estonian public media ERR.

Saeima supports government’s decision to extend state of emergency in Riga

On Thursday, 5 December, Saeima agreed with the government’s decision to extend the state of emergency with waste management in Riga’s administrative territory until 12 March 2020, as reported by the Saeima’s press-service.

Flu infection rates remain low in Latvia, but infection spread continues nonetheless

A total of 30 clinically confirmed flu infection cases were registered in Latvia’s healthcare institutions. Nevertheless, virus activity remains low in the country, according to the latest monitoring report on influenza and acute upper respiratory tract infections compiled by Disease Prevention and Control Centre.

France braces for intense protests over Macron’s intended pension reform

France shaken by this decade’s biggest protests in which trade unions urge other residents to oppose French President Emmanuel Macron’s intended pension reform, Reuters reports.

Marguerite Fund to sell Conexus shares to Japanese Marubeni fund

Shareholder in Latvian natural gas transmission and storage system operator Conexus Baltic Grid, Marguerite Fund plans to sell its owned 29.06% of Conexus shares to Japanese company Marubeni fund.

Saeima’s majority may move towards Riga City Council’s dismissal

The majority of Latvia’s Saeima may vote towards dismissing Riga City Council, according to unofficial information from LETA. There is also a more reserved position on this, but generally it is admitted that Riga City Council’s dismissal process will be initiated.

National Economy Committee invites reviewing Rail Baltica project’s management structure

«Considering the unstable situation and lasting stagnation with the project’s management, the National Economy Committee invites Transport Ministry to review the structure of RB Rail,» says Economic, Agricultural, Environmental and Regional Policy Committee chairman Jānis Vitenbergs.

«Riga’s residents overpay.» Kleins proposes terminating contract with Rīgas karte

Riga City Council vice-chairman and shareholder in municipal company LLC Rīgas satiksme Druvis Kleins, has ordered the company’s lawyers to assess the option of quickly terminating the contract with LLC Rīgas karte, as confirmed by Kleins, who represents For Riga! bloc in the city council.

Newspaper: Russia plans to deploy a motorized division in Kaliningrad next year

Russia has plans to deploy a motorized division in Kaliningrad Oblast, which shares borders with Poland and Lithuania, as reported by Russian government newspaper Rossiyskaya Gazeta.

Ex-president says conflicts with territorial reform surface where the rich refuse to share

The objective of the territorial reform remains unchanged – forming economically more efficient administrative territories. This means creating counties able to sustain themselves and develop economically. Conflicts with the reform usually surface in areas, where the rich refuse to share. There are also situations when the poor want to receive and do nothing on their own, BNN was told by ex-President of Latvia Valdis Zatlers.

October’s industrial production output in Latvia increases 3%

Compared to October 2018, industrial production output increased by 3 % in October 2019, according to calendar adjusted data at constant prices.

Iceland’s prime minister urges making welfare a budget priority

Iceland’s Prime Minister Katrin Jakobsdottir urges the government to focus on priorities that serve the interest of families and nature, not focus exclusively on economic growth, BBC reports.

NATO leaders meet in spite of tension to discuss security challenges

In spite of ongoing rows, leaders of NATO member states met near London on Wednesday, 4 December, to discuss important topics like cyber security and strategic challenges created by China, BBC reports.

Latvian government extends state of emergency with waste management in Riga

Although Riga City Council has stated multiple times that it is not necessary to extend the state of emergency with waste management, Latvia’s government has nevertheless decided to extend it until March 2020.

SEB Bank clients now able to use mobile devices to pay for goods and services

SEB Bank clients who have a mobile phone with Android OS are now able to pay for goods and services using their phones. It is possible to use mobile phones to for transactions up to EUR 150 in Latvia and abroad using contact-free terminals, the bank reports.

Kleins: we may have to review who receives public transport discounts in Riga

Considering the complicated financial situation at Rīgas satiksme public transport company, it may be necessary to review which groups of people receive discounts and benefits, said Riga City Council’s vice-chairman Druvis Kleins in an interview to Latvijas Radio on Wednesday, 4 December.

Latvian pupils’ mathematics score above average among OECD member states

Latvian pupils’ mathematics skills are reportedly higher than average among member states of the Organization for Economic Cooperation and Development, according to results of OECD PISA 2018.

Environment Ministry to decide on Riga City Council’s dismissal this week

Latvia’s Environment Protection and Regional Development Ministry’s lawyers will prepare a report this week on whether or not it is necessary to initiate dismissal of Riga City Council, as journalists were told by Environment Protection Minister Juris Pūce on Tuesday, 3 December.

Turkey upholds veto against NATO Baltic defence plans; Lithuania hopes for compromise

Ankara has reiterated its stance of blocking the adoption of updated Baltic defence plans in NATO as a bargaining chip in its attempts to label Kurdish groups in Syria as terrorists, according to the Turkish policy.

In spite of suspicions of fraud in VID, government promotes Kaspars Podiņš to general

Although multiple objections have been voiced in regards to Kaspars Podiņš’s work as chief of State Revenue Service’s Tax and Customs Office, Latvia’s Cabinet of Ministers has nevertheless decided to promote him to general.

Estonian pupils – best among European nations in PISA education test

Estonian pupils’ skills have topped the list of European nations in the latest ranking of average education results of the survey of Programme for International Student Assessment carried out by the OECD in 79 countries and economies.

Latvia’s ruling coalition officially agrees on Kazāks as chosen Bank of Latvia governor

Parties of the ruling coalition in Latvia have agreed to pick the central bank’s council member Mārtiņš Kazāks as their chosen candidate for the posting of governor of the Bank of Latvia, politicians told journalists on Tuesday, 3 December after a meeting of ruling parties.


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