bnn.lv Latviski   bnn-news.com English   bnn-news.ru По-русски
Ceturtdiena 19.07.2018 | Name days: Jautrīte, Kamila, Digna
LatviaLatvia

Economic Diary. Big money give-away season

FaceBook
Twitter
Draugiem
print
(No Ratings Yet)

Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RU9 areas of high priority are planned to be funded as part of the European equality policy in the next 7 years in Latvia. Among those directions are the initiatives to develop small and medium business, technology, environmental protection, employment and other important aspects. The list has been compiled in a form of an official document. This documents has been submitted for review by state secretaries.

Enough for everyone

All European funds that are involved in equalisation policy will allocate EUR 4.4 billion for Latvia throughout 2014-2020. The Finance Ministry sent a report to the state secretaries last week. The plan includes activities that will be funded by this money. 29.5% of the amount (LVL 1.35 billion) is proposed to be used for long-term transport development. This includes the development of Riga International airport, the development of port and railway infrastructure and maintenance of state roads.

Another important development direction is the support of small and medium businesses. Raising the competitiveness of businesses is a direction for development in its own right. A total of EUR 368.94 million is planned to be allocated for this. Municipalities will be allocated EUR 252.28 million for the following goals: 800 ha of reconstructed or created industrial areas, 9,000 preserved or created jobs, dozens of attracted private investors.

The Finance Ministry had previously sent the same list of priorities to the European Commission. This was done unofficially, so that all conflicting matters would be resolved when it is time to sign official agreements with Brussels. There are, of course, conflicting matters: the EU authorities believe Latvia should reduce the share planned to be allocated for roads and allocate more money for other priorities.

How to compensate losses?

Latvia seems to give with one hand and take with the other one. The head of the Finance Ministry Andris Vilks mentioned this week that the question regarding the possibility of increasing VAT could be discussed again. The minister’s idea is simple: if we stick to the notion that PIT should be 20% and social insurance fees are to be reduced, this reduction of revenue should be compensated somehow. The ministry believes this compensation will be provided at the expense of the reduction of the shadow economy. Nevertheless, this does not mean VAT will be increased in 2014. The minister believes this issue should be discussed as part of budget planning for 2015.

VAT has been changed many times throughout the history of modern Latvia. The rate of this tax was recalculated four times in the second half of the 2000s.

Paying the debts of others

It should be said, however, that the state of Latvia is prepared for sacrifices as well. But not for all. For many the news about Latvia paying the debt of Liepājas metalurgs (LVL 47.414 million) to the Italian UniCredit S.p.A. came as a shock. Why should the state pay the debts of a private company? And why aren’t other entrepreneurs eligible for this kind of support?

The Latvian Cabinet of Ministers reviewed the report regarding the state of Liepājas metalurgs this week. Karlis Krasting, consultant of Prudentia, told the government that the plant is likely to function with profit in the near future. LM will require funds for the first two months, however. As soon as the solvency restoration plan is complete, it will be known who will provide the money.

Everything indicates that the future of LM depends on the creditors’ decisions, not shareholders. The Finance Ministry hopes that a good and sustainable plan for legal defence will allow the company to restore function and reach an agreement regarding the payment of debts.

As for the co-owners of the plant, they continue to gradually lose control over the enterprise. The largest shareholder of LM Sergei Zakharin (49%) was not re-elected into the council this week. Guntis Vilnitis was elected in his place. Ilya Segal (21.03%) has left the Board of LM altogether. The State Police had previously prohibited Zakharin and Segal to take managing positions in LM due to the criminal proceedings initiated against them. Kirov Lipman (23.47%) has decided to leave the newly elected council because the last meeting was held without him.

Meanwhile, ex-finance minister Einars Repse claims the state has a good chance of getting out of the whole Liepaja situation with profits. He believes the money is not lost. All that needs to be done is take over the plant, reorganize it and sell to some investor. As simple as that.

Ref: 017.109.109.8429


Leave a reply

  1. Ilmars says:

    Re : Big Money Give Away Season
    As the eurozone goes down the economic gurgler ,and European citizens get pissed off with incompetent management , then we can expect more bullshit stories like this .Instead of public relations stunts like this , they would be better off sacking the head of the ECB , stopping the inflation first policies , and adopt the policies of the Americans that have proven to lower unemployment and improve the economy .

    • Anonymous says:

      Yeah, no thanks. The last time American policies reduced unemployment and improved the country’s economy was during World War II. I think we all know the means by which the American government implemented these improvements…no thanks

  2. Ilmars says:

    The last time American policies dropped unemployment is like right now. In the last 3 years , since the global financial crisis , the American unemployment rate has dropped from over 10% to 7.4% this month . In the same period , the eurozone unemployment rate has gone up from 8% to over 12% , including a disgraceful 40% youth unemployment rate. Go figure.

House arrest of Russian theatre director Serebrennikov extended

A court in Russia prolonged the house arrest of Kirill Serebrennikov, a leading Russian theatre and cinema director, until August 22 as he waits for a criminal trial charged with of embezzlement of state funds.

NCP picks Jurašs, Strīķe, Bordāns, Feldmanis and Šuplinska as its headliners

Latvia’s New Conservative Party has picked Juris Jurašs, Juta Strīķe, Jānis Bordāns, Krišjānis Feldmanis and Ilga Šuplinska as its headliner candidates for Saeima elections.

Bank: residents spend an average of 50 to 100 euros on health every quarter

84% of residents aged 18 to 74 have used medical services in the past three months. Only 5% of all costs were covered by health insurance, according to a survey by Norvik Banka.

Countries sign third Rail Baltica co-financing agreement

Connecting Europe Facility co-financing agreement for the construction of Rail Baltica railway infrastructure was signed by participating member states on 13 July. The value of the agreement is EUR 130 million. CEF’s contribution will reach EUR 110 million, which is equal to 85% of all applicable costs, as confirmed by RB Rail communication consultant Ligita Brodiņa.

Saeima plans to increase compensations for child victims

Saeima’s Legal Affairs Committee supported for the third reading amendments that provide for increasing state compensations to child victims.

Sweden asks for help to fight wildfires behind Arctic Circle

Sweden has called for help of European Union neighbours to put out wildfires, some raging in territories behind the arctic circle.

Latvijas Krajbanka administrator recovered EUR 1,038 million in June

The administrator of the liquidated Latvijas Krajbanka recovered EUR 1,038 million in June, which is 6.9 times more than a month prior, according to the official outlook published in Latvian Herald.

Estonians warned of heat wave, high UV radiation

Weather forecasters in Estonia have warned the population of hot weather conditions, because temperatures are forecast to reach 30-31 degrees Celsius this week.

Minister says police have leads in Bunkus murder case

Police have found new leads in the murder case of former insolvency administrator Mārtiņš Bunkus, said Interior Affairs Minister Rihards Kozlovskis in an interview to 900 seconds programme of LNT.

Average EU market prices for dairy products grew in May

Compared to April, dairy product prices in Latvia did not increase in May. In the EU, however, average market prices continued growing in May, according to information compiled by Agriculture Ministry’s Market and Direct Support Department.

ECHR: Russia violated human rights in Pussy Riot and Politkovskaya cases

The European Court of Human Rights (ECHR) has found Russia guilty of human rights violations in its handling of two high-profile cases – its arrest and conviction of Pussy Riot protest group in 2012 and the investigation into journalist Anna Politkovskaya's murder.

Draft making eID card a compulsory document from 2023 onward remains inactive

Latvia’s government has yet to review the legislative draft that makes electronic ID card a compulsory personal identification document for all residents of Latvia older than 15.

Latvia imported 7% less cigarettes in five months of 2018 than it did a year ago

In the first five months of 2018, Latvia imported 1.828 billion cigarettes, which is 7% less than the amount imported in the same period of last year, according to data compiled by the State Revenue Service.

EU's largest free trade agreement signed with Japan

A free trade agreement between the European Union and Japan has been signed and is to apply to close to a third of the world's gross domestic product and the economic activity to 600 million people.

Will Latvians know who elects their president? Draft on open vote «on the move»

On Tuesday, 17 July, Saeima’s Legal Affairs Commission decided to submit for the first reading amendments to the Constitution of the Republic of Latvia that provide for holding election of the country’s president in the Saeima through an open vote, as reported by the parliament’s press-service.

Schengen information system to help prevent tractor theft cases in Latvia

Latvia’s Cabinet of Ministers has supported amendments to the Operation of the Schengen Information System developed by the Interior Affairs Ministry. The aim of those amendments is providing access to the system to ensure public order and security in member states, the ministry explains.

Ministry declares no more free plastic bags for shoppers

From 1 January 2019 onward supermarkets will no longer provide plastic bags to customers free of charge. This will not apply to very light plastic bags, as confirmed by Latvia’s Environment Protection and Regional Development Ministry.

EY auditor’s work in ABLV Bank’s liquidation will be managed by its Polish office

The work of EY work in ABLV Bank’s liquidation process will be managed by its Polish office, as confirmed by company’s representatives.

Estonia sees no geopolitical change after U.S.-Russian summit in Helsinki

Estonian Foreign Minister Sven Mikser has commented cautiously that the U.S.-Russia summit in Helsinki is unlikely to bring fundamental change in the relations between the West, NATO military alliance and Russia.

airBaltic carried record large number of passengers in June

Latvia’s national airBaltic airline carried 1,876,839 passengers to destinations in Europe, Scandinavia, Russia, CIS countries and the Middle East in the first six months of 2018. This is 20% more when compared to the same period of last year, as BNN was told by the company.

Police to investigate possible MPC fraud at Tukums DH CHP plant

One of the largest CHP plants in Kurzeme – SIA Tukums DH – may have been squandering produced heating energy for a long time, which is a serious breach of mandatory procurement component governing rules, TV3 news reports.

Estonian holidaymakers die in Ukraine, media report

Three Estonian holidaymakers in Ukraine, have been found dead in a hotel in the Black Sea resort town of Odessa last weekend, Estonian media report without identifying the three young men.

Languages «a must-have». An interview with ex-president about political market methods and communist approach

There are two ways a political market is realized during closed presidential elections: one involves approval of candidates in exchange for votes, and the other – for money. If it’s the latter, it is best for no one to know how elections are performed. Harmony, which now stays quiet about open elections, has always been against this proposal, because it does not allow for creating a political market – sale of votes in exchange for influence, which has been done before...

Migration from Baltics, Eastern Europe to UK lowest in years

Migration to the UK from the Baltics and other member states of the European Union has been the lowest it has been for nearly four years in 2017, Britain's official statistics show.

Putin in Helsinki denies U.S. election meddling, Trump doesn't object

At the Russia-U.S. summit Helsinki, a key development has been differences in the attitude by U.S. federal officials to Russian interference in the American election process. Days after Washington charged 12 Russians with hacking the computer systems of U.S. officials, U.S. President Donald Trump has accepted the denial of Russian responsibility expressed by Russian President Vladimir Putin.