bnn.lv Latviski   bnn-news.com English   bnn-news.ru По-русски
Friday 22.02.2019 | Name days: Rigonda, Adrians, Ārija
LatviaLatvia

LEC: Latvia risks becoming a country with low quality of life

FaceBook
Twitter
Draugiem
print
(No Ratings Yet)

Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RU2016 is best described by events whose influence on the business environment and employers will only be possible to assess after some time, according to Latvian Employers’ Confederation’s outlook on positive trends of 2016.

Maris Kucinskis’ Cabinet of Ministers began its work this year. Even before his approval in his new post, Kucinskis and his partners agreed on common priorities. LEC urged the government to ensure the country would be able to achieve positive results next year that would contribute to GDP growth and secure quality of life standards equal to 70% of the average level in the EU. The latter has no turned out so well, unfortunately. It is likely Lithuania and Estonia will do better in this regard, LEC notes.

One of the year’s most important developments was Latvia’s joining of OECD. Joining this organization provided specific benefits and improvements – it was the main driving force behind the capital associations’ management reform and served as a stimulus for state institutions to combat bribery in international business transactions.

At the same time, it should be emphasized that joining OECD will not provide the results expected for the country’s national economy if introduction of OECD recommendations is not finished in a timely fashion, LEC notes.

To express common views and objectives, cooperation and social dialogue principles, LEC, as one of the government’s social partners, signed an agreement with the Prime Minister, Latvian Association of Local Governments, Latvian Chamber of Commerce and Industry and Latvian Science Academy on 9 August on conditions necessary to ensure national economic growth. It offers optimism and pre-conditions for necessary reforms and changing unfavourable emigration tendency, as well as increasing security of residents, says LEC director general Liga Mengelsone.

«By putting off or avoiding necessary reforms, Latvia risks becoming a country with average level of quality of life below that of the average in the EU, resulting in people leaving it in favour of looking for a better life elsewhere,» – Mengelsone continues.

It is planned to reach an agreement on one of the points next year, specifically in the context of tax policy – review of solidarity tax rate, as this year’s data showed what consequences surfaced as a result of the introduction of this tax.

«Rushed and poorly considered solidarity tax’s introduction has changed the behaviour of taxpayers and has created losses for the state budget,» – Mengelsone said. She adds that data for the tax showed that even though it had provided additional funds for the state budget, the number of large wage recipients has declined. This means the long-term impact on the state budget will be negative. It does not contribute to growth. It also makes the tax system more complicated for medium and large taxpayers.

One of the objectives LEC had proposed for the new government was working on improving indexes in Doing Business rating. In autumn, LEC came to the conclusion that this goal was successfully reached, as Latvia climbed to the 14th place among 189 countries. Unfortunately, not much progress has been achieved. On top of that, not only no progress has been reached in this rating, Latvia has also dropped to 49th place in it. «Latvia’s rating is significantly lower. This is because of the level of bureaucracy in the country’s state administration, the level of development of the country’s infrastructure, quality of healthcare and education policy, as well as tax rates and regulations associated with taxes. Because of that, Latvia’s competitiveness assessment, compared with last year’s results, is five places worse,» – Mengelsone explains.

LEC mentions Saeima’s decision for amendments to the Insolvency Law as one of the positive accomplishments of 2016. New regulations are but part of many measures on the road towards sorting out insolvency process. Businessmen expect work will continue to create legal and safe business environment for investments.

In spite of certain exceptions, the year can be described with the word ‘cooperation’. Although LEC believes recent decisions in budget and tax affairs are not very good, businessmen emphasize that it has been possible to establish active, mutually beneficial dialogue with Kucinskis’ government.

It is highly important to continue the dialogue, find common ground and reach agreements on the tax policy strategy next year. Results will demonstrates whether or not interests of businessmen have been taken into account and whether or not government representatives understand tax policy is a good tool for development of the national economy.

LEC and LCCI have already prepared their proposals for the medium-term tax policy to ensure the creation of a great business environment and accomplish economic breakthrough. Some of the most important principles are stability and predictability.

In the context of a better tax policy, it is important to resolve the matter regarding employees’ social security, as keeping this matter unresolved could potentially cause very unpleasant consequences in the future and increase pressure on residents’ social protection. LEC believes it is also important to add mandatory health insurance components in the current social tax rate.

In the context of national economy development, one of the most important objectives for next year is reviewing the mandatory procurement component for electricity, considering the current MPC for large producer companies is currently too high. This does not contribute to overall competitiveness of those companies and only serves to reduce the ability of industry participants to invest and ensure wage increase.

Ref: 102.109.109.5797


Leave a reply

Latvia’s inflation was higher than the average in EU and Eurozone and January

In January 2019, inflation in Latvia was higher than average inflation in the European Union and Eurozone, according to data from Eurostat.

Suicide rates among Baltic youngsters are the highest in Europe

Suicide rates among youngsters in Baltic States are the highest among European Union member states, according to results of a study on the welfare of youngsters in the Baltic States.

Unemployment in Latvia was 7.4% in 2018

72.8 thousand people were unemployed in 2018. Compared to 2017, number of unemployed persons dropped by 12.6 thousand or 14.8 %. Last year, Latvian unemployment rate constituted 7.4 %, which is 1.3 percentage points lower than in 2017.

Employment in Latvia reached 64.5% in 2018

909.4 thousand or 64.5 % of Latvia population aged 15–74 were employed in 2018. Compared to 2017, employment rate grew by 1.6 percentage points and number of employed persons by 14.6 thousand.

Anti-fraud activist Browder to submit criminal complaint over Swedbank

British investor and activist against Russia-related money laundering, Bill Browder, has voiced plans to submit a criminal complaint against Swedbank to Swedish authorities over its involvement in alleged money laundering transactions in the Baltics.

Latvian police assist German colleagues with «Russian Laundromat» case

German law enforcement institutions have finished investigating the ‘Russian Laundromat’ case. Latvian Economic Crime Enforcement Department assisted their German colleagues with the investigation, as reported by Latvian State Police.

Pilot's mistake found as cause of Estonia missile firing

The missile accidentally released over Estonia in 2018 was fired because of a mistake of the pilot of the Spanish NATO Baltic Air Policing aircraft, according to an investigation concluded by Estonia.

Grass-burning season in Latvia commences with six separate fires

On Thursday, 21 February, Latvian firefighters were called in to deal with the first grass fires this year. This first such fire this year was put out in Ugāle, where last year’s grass was burning on an area close to half a hectare.

UK backing down on demands to re-open Brexit agreement

London seemed to soften its stance in Brexit negotiations with the European Union from fruitless attempts to re-open the withdrawal agreement to securing new guarantees to reassure eurosceptic members of the British parliament over the time frame of the temporary Northern Ireland border rules.

Spanish train manufacturer appeals Latvian procurement outcome in court

Spanish train manufacturer Talgo has appealed the decision made by Latvian Procurement Monitoring Bureau on re-assessment of results of the procurement of electric trains, saying that PMB has made big mistakes and wrong conclusions, which resulted in an illegal decision, Talgo representatives say.

Mass rallies held in Slovakia on murder anniversary of Slovak journalist

Large rallies have been held in Slovakia on the first anniversary of the murder of investigative journalist Ján Kuciak and his fiancee that brought down the country's government, but still has not been solved.

Minister: PUC’s and Competition Council’s functions should be expanded

There is no need to merge Public Utilities Commission and Competition Council. It would be better to expand their respective functions, said Latvian Economy Minister Ralfs Nemiro.

Nights to become chilly in Latvia, whereas days will become warmer soon

The centre of an anticyclone is currently above Scandinavia. This anticyclone will start gradually moving south-west on Friday, 22 February. It will also dictate weather in Latvia – the sky will become clear but air will remain chilly, promises Latvian Environment, Geology and Meteorology Centre.

Lithuanian law enforcers bust high-profile judges and attorneys

In an unprecedented move yet, Lithuania’s law enforcers busted this week what it may be an organised, yet impenetrable until now ring of the country’s some A-tier judges and lawyers. Some of the big names have deliberated high-profile legal cases implicating some of Lithuania’s most heinous criminal gangs.

Latvian Saeima rejects proposal to reduce number of ministries

On Thursday, 21 February, the Saeima rejected a proposal from the opposition and several KPV LV deputies on reduction of ministries.

Latvian Saeima supports legislative draft on people’s rights after Brexit

Saeima has supported Foreign Affairs Committee’s legislative draft intended to ensure better legislative cooperation and protection of people’s rights during the transition period after the United Kingdom’s exit from the European Union, as confirmed by the parliament’s press-service.

Study: Latvian residents worried the most about traffic accidents when travelling

When travelling abroad, Latvian residents are afraid the most of ending up in a traffic accident (56%), fall ill (54%) or become injured (53%), according to results of a study performed by If Insurance.

Producer price level in industry in Latvia grew 0.1% in January

Compared to December 2018, the level of producer prices in Latvian industry rose by 0.1 % in January 2019. Prices of products sold on the domestic market grew by 0.4 %, but prices of exported products reduced by 0.2 %.

Twitter introduces special political ad policy with EU election in mind

The world's leading microblogging site Twitter on Tuesday presented tools in the European Union to simplify identification of political campaign ads before the European Parliament elections in May.

Latvian Saeima supports in second reading sale of tobacco products using price lists

On Thursday, 21 February, the Saeima supported in the second reading amendments to the Law on the Handling of Tobacco Products. These changes state stores will no longer be allowed showcase tobacco products on shelves. Instead tobacco products will be sold using price lists, as reported by Saeima’s press-service.

Minister: there are several options for acquiring Gazprom’s shares in Conexus

There are several acquisition options for the shares Russian gas concern Gazprom owns in AS Conexus Baltic Grid, says Latvian Economy Minister Ralfs Nemiro.

Parliamentary election begins in Estonia with online voting

With Estonia's signature online voting the 2019 parliamentary election has begun on Thursday, offering a variety of advance voting options in the period until the real election day, March 3.

LIZDA: we only want what was promised to us before elections

«We only want what was promised to us before elections,» said Latvian Trade Union of Education and Science Employees chairperson Inga Vanaga in an interview to LTV on Thursday, 21 February, commenting the talks held with government representatives the previous day.

EU-British talks «constructive», while May's party shrinks in UK parliament

Following three British MPs leaving the ruling Conservative Party amid Brexit impasse, British head of government held more talks with the European Union that were constructive according to both Pirme Minister Theresea May and European Commission President Jean-Claude Juncker.

Selection term of CEC chairman’s candidate to be extended

Politicians of the ruling coalition in Latvia have agreed to extend the candidate selection process of the head of Central Election Commission by two weeks.