bnn.lv Latviski   bnn-news.com English   bnn-news.ru По-русски
Monday 16.07.2018 | Name days: Hermīne, Estere
LatviaLatvia

Economic Diary. Latvia is the only one once again

FaceBook
Twitter
Draugiem
print
(No Ratings Yet)

Latvian officials are once again trying to widen the volume of information banks are required to provide at the request of State Tax Services. And they do this before similar requirements are set in the EU.

Premature requirements

Amendments to the Credit Institutions Law, that were announced this week, state specific cases when the State Revenue Service (SRS) can request information from banks. Particularly, information about a bank account, its owner or person allowed to manage it; the bank account’s state on the beginning and end period; the amount of taxes paid for interests for a specific period (if any); information or documents regarding some specific transactions, etc..

These proposals of the Finance Ministry caused objections in the Latvian Commercial Banks Association. One of the reasons for the objections was the description of the information SRS is allowed to request from the credit institutions for itself or at the request of its EU colleagues (or countries Latvia signed treaties with regarding exchange of such information). According to the Vice-President of the association Andris Rozentals, the point of “information and documents regarding specific transactions” seems too unspecific. According to him, the information that is to be presented according to this point is, at the very least, unclear.

Furthermore, as the association noted, the new amendments contain the formulation of “expected important information”. However, there is currently no agreement within the alliance as to what is meant under “expected important information”. The EC is still in the process of developing the form, using which the SRS will be able to compile requests to their colleagues from member-states. This is why the premature initiative of the Finance Ministry seems laughable.

Latvia is the only one once again

The outlook of GDP for 2012, according to the European Reconstruction and Development Bank, of all Baltic States seems entirely different. Latvia is the only country in the region to have its index increased from the previous value. The latest short-term perspective of the bank’s experts states that Baltic countries demonstrate flexibility and GDP growth before the signs of insignificant recession. Latvia’s achievements are noted above all else: “Latvia’s recovery turned out to be far more rapid than it was needed. The country should demonstrate the largest increase of GDP in the EU – at a level of 4.2%.”

As a result, Latvia’s outlook has been increased by 0.7% (from 3.5%) for 2012, Lithuania’s and Estonia’s outlooks have been reduced – from 2.8% to 2.7% and from 2.4% to 2.3% respectively. Local governments have also reviewed the values of Latvia’s economy: at first, the budget for 2012 was compiled with respect to GDP growth around 2.5%, this summer’s projection was raised to 4%.

A few words about trust

Survey results of GfK Custom Research Baltic and Nozare.lv, that were published this week, also turned out to be interesting. As it turned out, Latvia has the lowest level of trust towards the finance sector among Baltic States (3.9 out of 7), as well as the largest number of people who take swift credits. Estonia is one the second place in terms of trust – 4.3 points. Residents of Lithuania trust the financial sector the most – 4.5 point.

It also turned out that respondents’ attitude towards separate market segments of financial services could be better than that of the industry itself. For example, Latvians often take fast credits (22% of respondents), there are 18% of respondents in Lithuania, and 5% in Estonia.

The survey carried out throughout September – October 2 interviewed internet users age 18-65. All and all, 1802 Latvian residents, 856 Lithuanian residents, and 1 003 Estonian residents were interviewed.

Budget of strife

In conclusion, one more event that is directly related to us, even though takes place outside of Latvia. This, of course, concerns the long-term budget of the EU for 2014-2020. Cyprus has proposed to save up 50 billion EUR on European funds that stimulate the development of the poorest EU countries, including Latvia. The new budget has become a reason for strife for members of the alliance. Shortly before another summit, scheduled for November 22-23, EU donors have begun heavily criticizing the offer of the European Commission to set a large amount of budget expenses at 1.03 trillion EUR in seven years’ time.

These discussed measures can become troublesome for Latvia. Currently, ones to benefit the most from the equalizing policy are the least developed countries of the EU – mainly post-soviet countries of Eastern Europe, including Latvia. One of its main goals is growing the lacking members of the alliance for the creation of an “equal” European market. The effect the European funds have on our countries economy cannot be overestimated.

The Finance Ministry notes that GDP per capita has increased from 46% from the average European level in 2004 to 58% in 2011. 3.2 billion LVL are available to us in the current planning period (2007-2013), and this is the most significant funding resource of public funding.

State Secretary of the Environment Protection and Regional Development Ministry Alexander Antonov says: “Given that equalizing policy funds have been providing more than 90% of public investments in recent years, the possible fund reduction could have a negative effect on Latvia’s economy, because we will not be able to sustain growth at the rate we were planning.”

Ref: 017.109.109.4619


Leave a reply

French victory in World Cup celebrated by tens of thousands in Paris

After the football World Cup was won by the French national team on Sunday, an enormous crowd of people gathered in central Paris to celebrate.

Another case of African swine fever infection recorded for domestic pigs in Latvia

African swine fever infection was recorded for domestic pigs in Tērvete on Monday, 16 July. 16 pigs were liquidated because of the infection, as reported by Food and Veterinary Service.

MEP Artis Pabriks becomes political party «Attīstībai/Par!» prime minister candidate

Latvian political party «Attīstībai/Par!» has picked Daniels Pavļuts, Juris Pūce, Ilze Viņķele, Artis Pabriks and Mārtiņš Bondars as its regional candidate list leaders. Artis Pabriks will also be the party’s prime minister candidate.

Russian-U.S. presidents meet in Helsinki

U.S. President Donald Trump and Russian President Vladimir Putin are meeting on Monday in Helsinki.

Heat of up to +30° C expected in Latvia this week

Weather in Latvia will be warm and even hot at times this week, as air temperature reaches up to +30° C. At night, air temperature is not expected to go below +20° C. Many regions will likely experience thunderstorms closer to the middle of the week, Environment, Geology and Meteorology Centre reports.

Week in Lithuania. Lithuania's Tripartite Council fails to reach agreement

Lithuania's Tripartite Council on Tuesday, July 10, failed to reach agreement on raising the minimum wage. Employers are inclined to back the government's proposal to raise the minimum pay to 420 euros. Meanwhile, trade unions want it increased to 450 euros.

BNN summary of the week: NATO to increase and ABLV Bank loses its license

BNN offers a summary of this week’s topical news in a variety of categories: Future; Deal; Fight; Decline; Decision; Opinion.

SEB Bank to unite life insurance companies working in Baltic States

SEB Bank will unite life insurance companies working in Baltic States, BNN was told by SEB Bank’s representative Agnese Strazda.

Saeima deputy Askolds Kļaviņš becomes suspect in criminal case

Saeima deputy from the Union of Greens and Farmers Askolds Kļaviņš has been made a suspect in the criminal case regarding abuse of official power.

Minister: E-health system has stabilized, but improvements are still needed

Functionality of the E-health portal has stabilized. Disconnection errors have ceased. Nevertheless, we have to continue improving the system further, said Latvian Healthcare Minister Anda Čakša said in an interview to Rīta panorama programme of LTV.

Six to eight Finance and Capital Market Commission officials may work at ABLV Bank

Six to eight FCMC trusties may work at the liquidated ABLV Bank, says Finance and Capital Market Commission chairman Pēters Putniņš.

Latvia’s Cabinet of Ministers receives expanded draft on deposit system

Environment Protection and Regional Development Ministry has submitted to the Cabinet of Ministers an expanded legislative draft regarding amendments to the Packaging Law and Environment Protection Law for their review in the State Chancellery, as confirmed by the ministry’s representatives.

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.

Russia extends food product embargo until end of next year

On Thursday, 12 July, Russian President Vladimir Putin decided to extend the embargo on food product imports from countries of the European Union and other countries until the end of next year.

Heat in Latvia to remain for longer; thunderstorms and heavy rain expected, as well

Next week in Latvia will be appropriately hot for summer, as air temperature is expected to reach +30° C at times. Nevertheless, most of Latvia will experience rain and thunderstorms, as reported by State Environment, Geology and Meteorology Centre.

US President announces «tremendous amount of progress» in defence spending matter

On Thursday, 12 July, US President Donald Trump announced having achieved a great deal of progress in the NATO member states’ defence spending matter during the summit.

Providus: 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.

Study: Latvian residents rely on knowledge and hard work rather than luck

30% of Latvia’s residents believe company success formula relies on decade-long work and significant profits, as well as employee satisfaction, according to the latest Latvian Barometer study of Baltic International Bank.

Competition Council warned 34 persons for possible cartel agreements this year

In the first half-year of 2018 the Competition Council warned 34 persons about possible cartel agreements in six possible violation episodes. Affected companies work in three sectors – burial, security and driving school services.

European Commission predicts 9% lower wheat harvest for Latvia this year

According to estimates from the European Commission, Latvia’s wheat harvest is likely to be 9% below that of last year, according to information from Agriculture Ministry’s Market and Direct Support Department.

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.

US President asks allies to increase defence expenditures to 4% of GDP

During NATO summit in Brussels US President Donald Trump told leaders of participating member states that they have to increase their expenditures on defence to 4% of GDP.

NATO agrees to station multinational division North headquarters in Latvia

In accordance with an agreement reached by Denmark, Latvia and Estonia, it has been decided to station the headquarters of NATO’s multinational division North at Ādaži base, as confirmed by Latvia’s Foreign Affairs Minister Edgars Rinkēvičs.

President vetoes two bills over consecutive days, still enjoys high support

Lithuanian President Dalia Grybauskaitė has used her presidential powers in full swing this week, vetoing two bills over two consecutive days. First the head-of-state vetoed amendments paving the way for a far-reaching overhauling of the country‘s healthcare facilities. And the next day, on Wednesday, July 11, she scrapped amendments to the Referendum Law, which, if implemented, would have lowered the threshold for a dual citizenship referendum. President cautioned that the bill was potentially not in compliance with the Constitution.

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.