bnn.lv Latviski   bnn-news.com English   bnn-news.ru По-русски
Sunday 22.07.2018 | Name days: Marija, Marika, Marina
LatviaLatvia

Vilks to Lembergs: showman’s tricks are not enough to secure a budget in the interest of society

FaceBook
Twitter
Draugiem
print
(+2 rating, 2 votes)

Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RU«Everyone knows about Baron Münchhausen, who earned world fame with his unbelievable stories, but many do not know that Latvia has its own Baron Münchhausen from Ventspils. I have talked about him in 2011. However, to make sure everyone can understand what we are talking about, I believe it is worth mentioning a few fundamental ABCs Mr Lembergs is either unaware of or uses them to manipulate public opinion,» – says Latvian Finance Minister Andris Vilks.

«First – about borrowing. All countries borrow money from either international financial markets or internal ones. However, prices differ from country to country. One of the main criteria is the country’s finances; the more disciplined the country, the lower the deficit and external debt, the cheaper the borrowing.

In 2010, the lowest point of the crisis, Latvia borrowed money from the International Monetary Fund and the European Commission, because international financial markets were not prepared to provide Latvia with finances because of the state of the country’s economic and financial systems. Now we are obligated to return this money. Thanks to the fact that our country’s finances have been sorted out and all macroeconomic indexes are positive, Latvia can afford borrowing money from international markets at rates that are lower than those of IMF and EC,» – said Vilks.

He continues: ‘Secondly, none of the countries of the European Union, including Greece, have had their debts written off by international organizations. Only part of Greece’s commercial banks’ state debts have been written off, and it was the private sector that paid the most for the country’s living in debt. Lembergs’ commentaries on this matter allow for the possibility that he finds it difficult to differentiate between state and private finances.

«Thirdly, it seems that Mr Lembergs’ understanding of state finances is based on the principle – borrow, spend and never pay back. It is the surest way towards a dead end. The foundation of economic development lies in sorted out finances and not spending more than you owe. It was the course chosen by me as the country’s Finance Minister and it is my contribution to the national economy. Let’s not forget that sorted out state finances are also a requirement for borrowing for reasonable rates.»

«As for the state debt, it seems that Mr Lembergs does not understand that even the state debt brings money. In order to pay back the loan provided by EC in 2015, Latvian State Treasury had borrowed money in external financial markets in 2014 at the lowest rates recording in Latvia’s history. So it seems what we have here is something Mr Lembergs does not know – refinancing of the state debt for the lowest rates. Had he known this term, he would have been not be so surprised when the debt had increased in 2014 and is expected to significantly decline in 2015. It should be added that even without checking the numbers mentioned by Mr Lembergs I can say that the debt’s reduction by 3.3 percentage points allows the state to save EUR 26 million in debt maintenance costs.

In an attempt to demonstrate his competence in matters of the state budget, Mr Lembergs has noted that a comparison of state expenses of 2010 and 2014 shows that revenue has increased, but he does not understand which sectors have been provided with additional finances. I can remind Mr Lembergs that the defence budget has increased 16% (EUR 31 million), the education sector has been provided with EUR 78 million in additional funding and healthcare sector will receive an additional EUR 70 million,» – said Vilks.

«In regard to Mr Lembergs’ economic skills, I will allow myself to mention that Ventspils municipal budget lost more than EUR 1.4 million in 2014 only because Mr Lembergs wanted to maintain the same level of collection of PIT.

In order to take part in the management of state finances, it is necessary to have at least basic understanding of budget-formation principles. A showman’s talent is not enough to approve a budget in the interest of society. I do not agree with anyone who encourages others to leave unreasonably high debts for Latvia’s next generations. Management of this kind is not worthy of a politician and state official,»- says Vilks.

Lembergs had previously voiced several criticisms to the minister, believing that Vilks had somehow offended him. Lembergs expressed this after Vilks, who has decided to leave politics, warned that stagnation for the new coalition would be a triumph for Lembergs.

Ref: 102.109.109.5832


Leave a reply

Week in Lithuania. Liberals ex-leader fails to recover confiscated cash

Eligijus Masiulis, a former Liberal Movement leader on trial in a major political corruption case, has failed to recover cash that was found and seized during searches of his home.

BNN summary of the week: open presidential election in Latvia and no more plastic bags for shoppers

BNN offers a summary of this week’s topical news in a variety of categories: Future; Change; Fight; Decline; Business; Progress.

SRS: cash register reform still stagnates, but has become much faster than it was last year

The cash registers reform continues stagnating. However, it has become much faster than it was a year ago, as reported by State Revenue Service.

Specialists to search for solutions to topical environmental problems in Ventspils

On Friday, 20 July, a meeting was held between Ventspils Commercial Port representatives and specialists from State Environment Service.

Children with functional disorders to receive services financed by EU funds

Child invalids will have access to social services intended to improve their social skills and mobility. More than EUR 4.2 million has been allocated for this goal from the European Social Fund, as confirmed by Latvia’s Central Financing and Contracting Agency.

Producer price level in industry up 4.3% in Latvia

Compared to June 2017, the average level of producer prices in Latvian industry increased by 4.3 % in June 2018. Prices of products sold on the domestic market rose by 4.8 % and those of exported products by 3.7 %.

Total tax debts in Latvia in July – 1.212 billion euros

At the beginning of July total tax debts in Latvia, including outstanding debts, halted debts and debts applied with repayment term extensions, accounted for EUR 1.212 billion, which is 0.8% less than a month prior, according to data from the State Revenue Service.

Survey: every third Latvian resident has received illegal loan offers

Nearly every third resident in Latvia or 31% of respondents admit having received offers to use illegal loan services, as concluded in a survey performed by Latvian Alternative Financial Services Association and SKDS.

Libya opposed to EU's idea to establish migrant centres in North Africa

Libya is against the solution of the European Union to set up migrant centres in the North African country as a means to keep migrants from arriving in the bloc and Libya would not be convinced with financial support, its Prime Minister Fayez al-Sarraj has noted.

Arrest warrant on Catalan ex-President cancelled by Spain

The Supreme Court of Spain cancelled a European arrest warrant for former Catalan regional leader Carles Puigdemont, as Germany refused to extradite him to face accusations of rebellion for declaring the independence of Spain's region, Catalonia in 2017.

Latvian government plans to allow handing expired food to charity

Latvia’s Agriculture Ministry has prepared amendments to the Law on the Supervision of the Handling of Food that provide permission to hand over certain types of food products to charity after the end of their expiry date.

Estonian industrial producer prices up 2.9% since June 2017

Estonian industrial producer price index has risen by 2.9% between June 2017 and the first summer month this year, resulting in an increase of export prices as well, Estonian statisticians have estimated.

Putin urges NATO to quit «irresponsibly» developing ties with Ukraine, Georgia

Russia's President Vladimir Putin cautioned NATO against developing deeper relations with Ukraine and Georgia, evaluating such a policy was irresponsible and would have consequences for the military alliance.

Latvian parliament not in a hurry to support president Vejonis for a second term

Political parties represented in the Saeima are not eager to support President Raimonds Vējonis for his remainder for a second term.

Weather in Latvia will remain warm and even hot at times

Weather in Latvia in the nearest couple of days will be dictated by a cyclone. Because of that the sky will be partially covered by clouds; thunderstorms are also expected, as reported by State Environment, Geology and Meteorology Centre.

Hungary sued in EU Court for criminalising help to illegal immigrants

The European Union's executive body has stated that a law in Hungary that criminalises support for illegal immigrants is in breach with EU law and Hungary has now been referred to the European Court of Justice for the alleged non-compliance.

Estonians buy alcohol in Latvia; country loses EUR 20 million in six months

Latvian stores located close to the Latvian-Estonian border have sold 1.6 million litres of strong alcoholic drinks in the first half year of 2019. This means Estonia has lost more than EUR 20 million in taxes, according to data from Association of Estonian Alcohol Producers and Importers.

Lithuania’s election watchdog slams ruling LFGU over popular TV series

Political messages can be channeled in various ways and the ruling now Lithuanian party, LFGU has chosen a very delicate way of the communications – through a TV series featuring the beauty and the ambiance of Naisiai, a picturesque settlement in Siauliai district.

Association: around 3,3000 people know of their HIV infection but receive no treatment

HIV remains a serious problem in Latvia – around 3,300 people are aware of their status but receive no treatment and continue spreading the infection. Because of that, it is necessary to act quickly for Latvia to lose its status as HIV kingdom and limit the spread of the infection, says Baltic HIV Association, informing decision-makers and responsible officials in institutions and hospitals about the HIV/AIDS situation.

Driver shortage may force reduction of international road haulage volumes

Latvia’s road haulage companies have started experiencing shortage of drivers. On top of that, if employment conditions for residents of non-EU member states do not change, it may be necessary to reduce the volume of road haulage volumes, says Latvijas auto president Valdis Trēziņš.

Lattelecom’s turnover up 9% in first half-year of 2018

Lattelecom Group’s turnover reached EUR 98.7 million in the first half-year of 2018, growing by 9% in comparison with the same period of 2017, according to unaudited financial results.

1,140 fewer births registered in Latvia in 2017

Since 2016 the number of births in Latvia is declining again. Compared to 2016, a total of 1,140 births fewer were registered in 2017. Also, the provisional number of births registered over the first six months of 2018 (9,664 children) is by 664 children smaller than that registered over the respective period of 2017.

Citadele Bank decides to reform Lithuanian subsidiary as a branch office

Citadele Bank has decided to reform its Lithuanian subsidiary as a branch office, as confirmed in the statement the bank submitted to Nasdaq Riga.

Russian pension age hike discussed amid protest outside Duma

As the Russian paliament votes on the proposal to gradually increase he pension age to 65 for men and 63 for women, some 200 people were seen protesting against the reform in Moscow.

Corruption watchdog chief says bureau has done no illegal actions

After going through Corruption Prevention and Combating Bureau’s past investigative activities, the bureau’s chief – Jēkabs Straume – found it confusing that officers often took no appropriate actions after acquiring evidence or receiving indications regarding necessary steps.