Latest 5 articles

Riga, November 03

The Latvia Minister of Finance Einars Repse has just handed in the Latvia Budget Project for year 2010 in the Parlament. The budget Project has already been approved by the Cabinet of Ministers.

Repse comments, that this budget is the hardest one in Latvia history. The budget goal this time was to consolidate 500 million lats. The goal is achieved by increasing the income by 185 million lats and decreasing expenses of 315 million lats. The decrease of the budget has affected completely all fields although there are some priority fields, which have got less decrease: social protection, health care, education and co-financing of the EU funds as well as the outside debt repayment.

The Budget Project prognoses 4.4 thousand million lats expenses and 3.7 thousand million lats income in 2010. The budget deficit is prognosed to reach 8.5% of the GDP. It is planned, that the GDP will have decrease of 4%.

Repse announces, that the Budget Project has managed to consolidate 500 million lats according to the request from the European commission without affecting the most vulnerable fields: reducing pensions, increasing the VAT tax, which would have a negative effect on the consumption and company income – therefore also on the Budget income from taxes.

There are still sharp discussions going on about the newly approved taxes: property housing tax - 0.1% of the cadastral value per year and changes in the Inhabitant Income Tax for use of the employer’s cars for private purposes. These changes define, that for each car the employee will be charged 44.90 lats per month and the employer will be charged 36.14 lats per month.

There are also other changes e.g. the untaxed minimum is being decreased to 25 lats, the unemployment benefit will be diminished and Property tax for engineering buildings will be increased. For government instances a new united payment system has been developed, which sets the Prime Minister’s salary as the highest and all government employees receive salary according to their post in the hierarchy.

The Budget Project still has to be approved by international creditors and by the Parliament. It is planned to approve the Budget in the Parliament in the beginning of December. In future the budget will have to experience futher consolidations until the budget deficit will not exceed 3% from GDP.

*****************

Riga, September 24
A major discussion has started in Latvia about changing the political system of the country from parlamentary democracy to presidental. More and more people express the opinion, that Latvia would need a political leader to bring the country out of crisis.
Three public organisations (The Political Laboratory, The Union of Employers and Producers for the Development of Latvia and Latvia – a Presidental Country) have signed a collaboration agreement to stand for the idea of a nation’s elected president and formed a core for a new political union, which could participate in the 10th Parliament election. The organisations plan to admit new members and finally to form a new political force, which will be named: „Latvia – a Presidental Country”. Their goals include to elaborate the country development strategy and a globally competitive economical system in Latvia as well as to increase the responsibility of the country officers about their decisions.
The representatives of the organisations have confirmed, that work on changes in the Constitution is started to provide the nation’s rights to elect the president. In such a case the president would be able to form and dismiss the government. To make this happen it would be necessary to change 3 points in the Constitution.
The new political force assumes, that to improve the existing situation it is not enough to use „classical methods”, that at this moment the inhabitants of the country would need a political leader and the idea of a presidental country would renew the nation’s trust.
On the other hand the political analyst Maris Zanders thinks, that wider president’s powers would not improve the existing situation. Even if the president would compose the new Cabinet of Ministers exclusively from professional candidates, it would still need the Parliament’s approval, subsequently it would still be dependent on the parties’ will and interests. So, while the political parties have not changed, the government would be still dictated by the same people as it is now. Zanders also believes, that it would be likely impossible to agree about one president’s candidate. The mass media in Latvia is very polarized and if one part would support a certain candidate, the other part would strictly disagree only because of a bare principle. It is also not certain, which media is supported by which financial resources and what are their political interests. To make the presidental country idea serious, first it would be necessary to make the president’s budget independent because at the moment it is being set by the government.
Zanders also suggests, that it is necessary to have a diverse and active society, different groups of interest to execute a fairly democratic election process. Unfortunately at the moment the most part of country inhabitants are too focused on their economical situation and too disappointed in the political processes to devote their time for active social life.
Therefore Zanders concludes, that the idea of a presidental country is seriously considerable, but preferably after some years, when hopefully the economical situation will be normalized.

*****************

 

Riga, February 23

After varied attempts to deal with the economical crisis in Latvia, the prime minister Ivars Godmanis on the 20th of February has announced his resignation to the president Valdis Zatlers. He explained, that he made such a decision because the coalition parties “Nation Party” and “Green and Farmer’s Union” were asking him to resign. Today the president is starting discussions with all the political parties of the Parliament about formation of a new Cabinet of Ministers. The president expects all parties to define their goals until the start of the discussion. Valdis Zatlers also expressed gratitude to the ex prime minister for his work and marked, that he didn’t manage to unite the political parties of the coalition.

Ivars Godmanis government was number 33 during the time of the independent Latvia Republic and number 13 after regaining the independence in year 1990. Ivars Godmanis government was approved on the 20th December 2007. During this period the country expenses have been reduced rapidly, the international loan has been formed and the administrative territory reform has been realized.

The Latvia Bank president Ilmars Rimsevics stresses, that it is necessary to form the new government at least during one week. “In this hard and responsible time for Latvia economics the wheel of the economical ship can not stay without supervising and the new government should be composed during one week. For anyone, who will take over changes in the government, it is crucial to follow the fulfillment of the European Commission and International Currency fund program at full extent by providing also the fulfillment of the criteria set for the state budget.”

The state controller’s Inguna Sudraba’s opinion is, that there is no plan in the country, how to overcome the economical crisis. Neither the coalition parties nor the opposition have a certain plan. At the moment plans of the International Currency Fund and the European commission are being realized, which are not always suitable for the specific situation. Sudraba considers, that rising the VAT tax from 18% to 21% was not a wise decision because it caused a fall of consumption and turnover. She would suggest to analyse the situation first and revise the taxes. Then it is necessary to stabilize the business so that it wouldn’t reduce and even more people wouldn’t become unemployed. She also suggests to revise the European Union programs, so that their funds would be used to stimulate the business in Latvia.

In order to stimulate the business and overcome the economical crisis the Latvia Trade and Industry Union has elaborated “Employers’ Plan for Stimulation of the Economics”. On 20th February it was discussed with the International Currency Fund. The representatives of the International Currency Fund have approved the offered proposal. The suggestions made by the Latvia Trade and Industry Union will be taken into consideration, when elaborating the International Currency Fund notification to the Latvia government. The employers’ plan includes several suggestions to stimulate the renewal of the economical development in certain areas – company liquidity, export stimulation, incorporating the European Union funds, stimulating innovations and management effectiveness.

Latvia Trade and Industry Union decided to prepare the “Employers’ Plan for Stimulation of the Economics” in the middle of December 2008 referring to the Latvia economics stabilization and development program approved by the government, which by it’s opinion doesn’t pay enough attention to stimulating the economics and there was a lack of cooperation with the employers during the elaboration of the program.

 

*****************

 

Riga, October 08
On Tuesday, October 07 the Latvia budget project for year 2009 was accepted by the Cabinet of Ministers and submitted for further examination to the Parliament. The budget project anticipates 5 461 609 066 Ls income and 5 791 293 866 Ls expenses in year 2009 and 1.85% budget deficit from GDP. To reduce the budget expenses it is planned to reduce the amount of government sector employees for 10 %, which means to dismiss 2419 government employees. The Head of the Cabinet of Ministers has also announced, that the salaries of employees working in the public sector will not be rised though the amount of the annual inflation is still high. The Latvia Bank informs, that in July the annual inflation was 16.7 %. The labour unions are still fighting to rise the salaries in the public sector, but no agreement with the Cabinet of Ministers could be achieved considering this matter. The labour unions promise to continue fighting during the examination of the budget project in the Parliament.
The prognosis in the budget project declares, that the GDP in year 2009 will have a 2 % rise, the annual inflation will be 7.6 % and the amount of unemployment will be 8.1%.
The Minister of Finance explains: „Though the economical crisis has reached a global amount in the world, it is important, what activities each country has planned to minimize the consequences of the crisis. The next years budget is composed with a deficit, which is one of fiscal instruments with a stimulating character. It is also important to continue national economy stimulating activities by tax legislation as well as to provide means for uptaking European Union funds and to retain support for investment projects. All these aspects are included in the Latvia budget project for year 2009.
One of the budget priorities for year 2009 is the uptaking of the European Union funds, which is still a support for the national economy development in future. The budget also includes a substantial increase of expenses for solving different social problems. For example, to secure a rise of the minimal salary in year 2009 from 160 to 180 Ls 2.7 million lats expenses are planned in the budget.”
During the elaboration of the budget for year 2009 the work of the government instances was analyzed and several activities were performed to improve their work effectiveness. The Ministries had to diminish their expenses for 10.67% not to exceed the maximal allowance of the total budget expenses for year 2009. The resulting saving in the budget is 136.8 million lats.

The Latvia Bank president responds to the budget project:
The Latvia Bank president announced his opinion, that the budget project is not realistic because it is based on the prognosis about the increase of the GDP for 2% comparing to this year, though the real situation is that the increase of the GDP next year can be expected only 0.1 – 1 % and the resulting budget deficit can reach 4%, which is too much and not acceptable. He expects, that the Parliament will change the budget project rapidly.
The Minister of Finance responded to the Latvia Bank president’s announcement, that the budget project was composed basing on July data and there is a risk, that it will need some changes. He also emphasized, that the situation is changing every day and it is too early to make any specific prognosis.

*****************

 

Riga, September 01 (DELFI.LV) - On Sunday, the 31st of August a show of self made aircrafts "Red Bull Flugtag Riga 2008" took place in Riga. Such an event is organized in Riga for the first time. This year "Red Bull Flugtag" competition has already taken place in Poland, Turkey, Great Britain, Australia and it will also take place in Finland, USA, Mexico and Estonia.
46 teams from different Latvia cities with their artworks were participating in the self made aircraft competition. The show was attended mainly by young people as well as families with children and some older people. The competition could be viewed from both Daugava river coasts and also from the bridges.
For the first time within 30 years in Riga there was an impressive aviation show demonstrated by 4 aeroplanes.
The first prize of the competition was won by a team from Riga called "The Squirrel". The pilot of the winner team got a prize of fully paid navigation courses to receive the private aeroplane pilot licence. The second prize was won also by a team from Riga "City Sport AirForce" and the 3rd prize went to a team from Marupe.
The spectators' prize from SMS votes was awarded to a team from Smiltene "Electroboy & Co".
The history of this selfmade aircraft competition starts in 1992, when "Red Bull Flugtag" for the first time was organized in Wien. Since then the competition has gained big popularity and it is being organized in more than 70 cities of the world.

 

*****************