Latviski English По-русски
Sunday 15.12.2019 | Name days: Jana, Johanna, Hanna

Prime Minister: persuasion of lenders still ahead

(+2 rating, 2 votes)

Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RU, Valdis Dombrovskis

The Prime Minister Valdis Dombrovskis

The international lenders will still have to be assured about the government’s commitment to include higher revenues from shadow economy combat into the additional consolidation measures, says the Prime Minister Valdis Dombrovskis.

The Prime Minister emphasized that currently the key factor in the negotiations with lenders is the inclusion of the shadow economy combat plan in the required consolidation of 50 million lats.

This year’s state budget already contains the scheduled 15 million lats in revenues from the shadow economy reduction, of which the lenders approve measures of nine million lats. Similarly, the budget also provides for additional revenues of 60 million lats.

We have a plan with concrete measures. The question is how many of these measures and the planned fiscal effect can be included in these 50 million lats. The Finance Ministry’s proposal is 12.8 million lats, explains the Prime Minister.

The Prime Minister did not project the lenders objections to the proposed state administration cuts, the excise duty changes and the non-banking sector’s taxation, although, regarding the non-banking sector, the Finance Ministry is currently aligning this issue and conducting calculations on the possible tax rates.

A specific time-limit for the implementation of budget consolidation has not been set yet; however, the sooner it happens, the more positive effect will it have. Financial markets would reflect this.

The key issue is the lenders’ consent, because we ourselves did not need these 50 million lats cuts. The budget deficit forms 5.4% of GDP, falling below the limit set in the loan programme. The lenders disposition is what matters, giving a positive signal to the financial markets, emphasizes Dombrovskis.

Once the initial positive agreement with the lenders is reached, the report mission will come to Latvia.

As reported, the approved additional consolidation measures of 39.5 million lats, supported by the government’s coalition, are planned at the expense of income and tax rise, according to the information compiled by the Finance Ministry.

Currently, the measures concerning revenue form 36 255 688 lats, but regarding expenditure – a decrease of 3 324 468 lats is expected.

An agreement was reached on the revocation of VAT reduced rate for natural gas from 12% to 22% from this year’s July 1, bringing 4 000 000 lats in revenue in 2012. It is emphasized that the reduced rate is applied only to households, while heat producers will not be subject to it.

Also from July 1, it is intended to reduce the current excise rate for natural gas (15.6 lats per 1 000 cubic meters) to the EU’s minimum level (for example, 10 lats per 1 000 cubic meters) and remove all unnecessary reliefs. This would secure 980 000 lats in revenues.

It is scheduled to obtain 12 800 000 lats from the shadow economy combat measures, 8 380 000 lats from the special permit (license) for consumer lending service provision and the state re-registration duty, while from the raise of excise duty on fuel by two santims – 10 500 000 lats in addition.

Also, the planned gambling tax revision is likely to generate additional 2 000 000 lats.

With regard to expenditure, local governments’ earmarked subsidies (from September 1, 2011) for the provision of general education will be cut by 700 000, given the drop in the number of schoolchildren in line with the demographic trends. Also, the infrastructure maintenance cost reduction by 226 447 lats is intended, as well as the National Armed Forces funding cuts of 2% for expenses on goods and services (excluding current liabilities)– by 396 086 lats.

Similarly, state administration jobs will be cut by 10% and it is also planned to reduce expenses on claims by 5%, resulting in 2 001 935 lats smaller expenditure.

Leave a reply

Aivars Lembergs leaves his post in Latvian Olympic Committee

On Friday, 13 December, individual member of Latvian Olympic Committee and member of its Executive Committee Aivars Lembergs announced to LOK board his decision to leave the organization, BNN was told by LOK press-secretary Mārtiņš Mālmeisters.

Ralfs Kļaviņš and Edvīns Bērziņš leave the board of Latvian Transit Business Association

Chairman of Riga Commercial Port Ralfs Kļaviņš and ex-chairman of Latvian Railway Edvīns Bērziņš have left the board of Latvian Transit Business Association, according to information from

US sanctions will not affect companies in which Lembergs no longer has any influence

The sanctions introduced by USA against Lembergs will not affect the companies over which he no longer has control thanks to a ruling of the court.

Liquidation of discount fares on multiple RMS routes would help save money for Rīgas satiksme

By liquidating multiple discounts for passenger fares on multiple LLC Rīgas mikroautobusu satiksme routes, LLC Rīgas satiksme public transport company hopes to save approximately EUR 1.75 million a year.

Tallinn region GDP portion decreases in Estonian economy

In 2018, 65% of the Estonian gross value added was created in Harju county, while the rest of the country is inching closed with Harju county, the official statistics of the Baltic country showed.

EU prolongs targeted sanctions against Russia over Ukraine

The European Union has extended for another six months its sanctions against Russia’s energy, finance and military sectors. The continued restrictive measures are said to remain in full until Minsk peace deal is implemented.

Local government representatives will no longer work at Riga and Ventspils freeport

Following the coming into force of amendments to the Law on Ports, representatives of Riga City Council and Ventspils City Council will lose their respective posts in the board of Riga Freeport and Ventspils Freeport, the law states.

Total tax debts in Latvia at December’s beginning – EUR 869.4 million

At the beginning of December, total tax debts in Latvia, including outstanding, halted and extended debts, were equal to EUR 869.367 million, which is 1.9% less than a month prior, according to data from the State Revenue Service.

In UK’s Brexit election, Conservatives win comfortable majority

In the British snap parliamentary election aimed at breaking the Brexit impasse, the ruling Conservative Party has won gaining a comfortable majority, according to close to complete results.

Riga City Council’s interim administration may be entrusted to VARAM state secretary Balševics

If the Saeima votes in favour of dismissing Riga City Council, the interim municipal administration may be entrusted to Environment Protection and Regional Ministry’s state secretary Edvīns Balševics, according to the ministry’s Riga City Council dismissal legislative draft to be decided on by the government on 17 December.

EU member states commit to 2050 carbon neutrality, Poland opts out

European Union’s 26 members, including the Baltic states, have supported the planned political course to considerably reduce the greenhouse gas emissions to net-zero by 2050. Coal-powered Poland said it could not reach the goal and opted out.

Latvia’s prime minister forms a work group to ensure Ventspils Freeport’s operations

On Thursday, 12 December, Latvia’s Prime Minister Krišjānis Kariņš has issued an order on formation of a work group under Transport Minister Tālis Linkaits in order to ensure undisrupted operations at Ventspils Freeport, as reported by the prime minister’s press-secretary Sandris Sabajevs.

Ministry: to prevent damaging Latvian sports sector’s reputation, Lembergs should leave LOK

To avoid letting US sanctions negatively affect Latvian Olympic Committee and spread to the reputation of the country’s sports sector, the ministry can only ask Aivars Lembergs step down as member of LOK Executive Committee, BNN was told by Education and Science Ministry.

Budget Committee declines residents’ request to postpone increasing funding for parties

Saeima’s Budget and Finance Committee has rejected a public initiative signed by more than 11 000 residents. This initiative requested postponing the planned increase of funding for political parties.

Lower election threshold in Lithuania – more democracy or chaos?

The Lithuanian legislature, Seimas, has lowered this week the parliamentary election threshold to 3 per cent for political parties and 5 per cent for coalitions.

Russia expels German diplomats, retaliating to German step over Berlin murder

Russia has asked two diplomats of the German Embassy to leave the country. This is a tit-for-tat measure after Germany declared two Russian diplomats personae non grata as Berlin investigates an international murder in the German capital, TASS reported.

Riga Freeport and Liepaja Special Economic Zone to leave LTAB

Riga Freeport and Liepaja Special Economic Zone will leave Latvian Transit Business Association managed by Aivars Lembergs, as both are subjected to US sanctions.

Lembergs’ influence over Ventspils Freeport needs to end, bank supervisors say

The goal of the US sanctions is reducing Aivars Lembergs’ economic and political influence over Ventspils Freeport and other companies under his control. Sanctions are not meant to paralyse companies, rather seeing how they are used to process deals influenced by the person under sanctions – Aivars Lembergs, said Finance and Capital Market Commission head Santa Purgaile during a press-conference on Thursday, 12 December.

USD 25 million offered in Weinstein sage to 30 alleged sexual abuse victims

In the U.S. movie industry scandal surrounding sexual abuse claims against film producer Harvey Weinstein his lawyers have offered a USD 25-million settlement to more than 30 women, The Guardian reports.

Legal Affairs Committee supports lifting judge immunity for administrative violation cases

Saeima’s Legal Affairs Committee supported prior to the second reading legislative drafts to the Law on Judicial Power and Law on Judges Disciplinary Liability intended to lift the immunity of judges in administrative violation cases, as confirmed by Justice Ministry.

Estonian-Finnish gas interconnection unveiled

Estonia and Finland have held ceremonies to unveil the gas pipeline Balticconnector, built to connect the gas transmission networks of both countries separated by the Baltic Sea.

Mārtiņš Kazāks officially becomes governor of the Bank of Latvia

On Thursday, 12 December, Latvia’s Saeima officially approved Mārtiņš Kazāks as the new governor of the Bank of Latvia, as BNN was told by Saeima’s press-service.

What is Ventspils Development Agency and what will its members do now?

Among the organizations against which US Department of Treasury Office for Foreign Asset Control has adopted sanctions is also Ventspils Development Agency. In accordance with OFAC issued Global Magnitsky General Licence Nr.1, global partners have 30 days to cease all cooperation with this organization.

Israel on way to third parliamentary election in year

Israeli legislators have been unable to overcome a prolonged political crisis. The Knesset has given its initial approval to the third parliamentary election in the Middle Eastern country in a year’s time after legislators proved unable to form a majority coalition.

Social Integration Fund torn over NGO support priorities

Although sides of the Social Integration Fund have argued over priorities of the Non-Government Organizations Fund, the contest to start using funding allocated to NGOs may yet be announced this year, allows Social Integration Fund council member and Prime Minister Krišjānis Kariņš’s representative Imants Parādnieks.

Do NOT follow this link or you will be banned from the site!