Central Europe Review - Latvian News Review

A few good contributors

State Secretary for Defense Edgars Rinkevičs, together with the defense ministers of nine other NATO applicants, three new NATO members and NATO Secretary General George Robertson reviewed the first stage of the Alliance's Membership Action Plan, in the Bulgarian capital of Sofia. The forum discussed defence capacity initiatives, prospects for joint crisis management operations and cooperation in military technology.

News agencies quoted Robertson as saying after the meeting that boosting the alliance's relations with Russia was crucial to security in Europe. He also warned NATO applicants that they still have much to do before they can join the alliance. "The alliance will enlarge again when NATO is ready, when nations aspiring to membership are ready and when their membership will contribute to security and stability in Europe as a whole...NATO wants countries that can generate security, not merely consume," Robertson said.

Meanwhile, the Baltic Eagle international military exercises started at the Ādaži training grounds near Rīga to practice peacemaking operations with about 1000 troops from ten countries, including those from Nordic states, the UK and the US. The exercises are concentrating on how to achieve a ceasefire between "two hostile countries" and compliance with the demands by peace-keepers. Also, Baltic navies joined in the Amber Sea 2000 exercises in Lithuanian waters.

Are you e-ready?

A law endowing electronic documents and signatures with legal force could be introduced in one year's time, provided the required financing is received, Lithuania's chief notary, Māris Gulbis, told reporters. He plans to submit the draft law to the ministries for discussion in November, and it could be adopted as soon as the beginning of the next year.

Also, at a roundtable dissussion with IT experts from the industry and universities, the Minsters of Economy and Education concluded that the turnout of computer software experts should be increased three to six times in the next five years to ensure the development of the IT field in Latvia.

We don't need no compensation

Legislators rejected a bill that would have asked Russia to compensate Latvia for the nearly five decades of Soviet occupation. Deputies voted 14-13 against the bill. The other 73 (!) either weren't present or abstained. Only For Fatherland and Freedom eventually supported it. The proposal said claims should be made for Soviet-era repressions and environmental damage. The bill was modeled after similar legislation adopted last June by Lithuania. Lithuanians calculated the damage to be compensated at USD 20 billion.

The People's Party dropped the idea to impose a ban on wearing former Soviet decorations, and the Foreign Affairs Committee of the Saeima backed the Latvian-Australian extradition treaty, which has become topical, due to the legal pressure mounting against accused war criminal Konrāds Kalējs.

Rating Latvia

Standard and Poor's (S&P) affirmed its ratings for Latvia. These included an A- for long term local currency issuer credit and senior unsecured debt ratings, BBB foreign currency long term issuer credit and senior unsecured debt ratings, A2 local currency issuer credit and short term debt ratings and A3 foreign currency short term issuer credit rating. The outlook remains stable, S&P said.

Latvia's ratings are supported by its fiscal flexibility afforded by a moderate general government debt burden, moderate external debt burden and Latvia's progressing international integration and advancing structural reforms, S&P said. The ratings are constrained, on the other hand, by Latvia's vulnerability to external shocks and relative government instability, according to the agency.

The stable outlook reflects the authorities' strong commitment to fiscal consolidation and the continuation of market-based reforms, S&P said. An upgrade of Latvia's ratings will depend on the political environment and the ability to generate lasting governments, as well as privatizing the few remaining public companies, said the agency.

Concentrating on political power

President Vaira Vīķe-Freiberga sent the law on public service regulators, which provides for the establishment of a single agency for the supervision of state-regulated utility and communications services, back to Parliament for a revision. Interestingly, the President returned the law to the Parliament at the request of the opposition left-wing parliamentary faction For Human Rights in an Integrated Latvia.

The opposition believe that great concentration of power in the hands of public service regulators is inconsistent with power distribution principles and may threaten the national economy, in case the body in question makes some mistake in decision-making. The leftist faction suggested that comprehensive public control over the regulator's operations should be ensured.

If elections were held now...

According to the most recent poll by the Latvijas Fakti polling group, if parliamentary elections were held now:

15 percent of the voters would not participate;
25 percent would not be certain what party to vote for;
14 percent would vote for the Social Democrats, 13.9 percent for Latvia's Way, 8.9 percent for the leftist alliance, 7.5 percent for For Fatherland and Freedom and seven percent for the People's Party.

No other party would make the five percent threshold to be elected to the Parliament. However, the next general elections are not due for another two years.

And in other news...

The state's fiscal deficit will be increased even further to 3.1 percent of gross domestic product (from the planned 2.7 percent) according to government-approved ammendments to the 2000 budget.
Visiting Greek President Costis Stephanopoulos lent support to Latvia's bid to join the European Union and also expressed Greece's support for Latvia's desire to join NATO.
A Nordic and Baltic foreign ministers' meeting in Rīga approved a new three-year cooperation framework until 2002, with total funds of USD 23.5 million.
Central Bank President Einars Repše reaffirmed the bank's stance not to unpeg the LVL (Latvian lats) from the SDR currency basket until Latvia joins the EU and eventually the European Monetary Union.
Rīga Stock Exchange President Uldis Cērps was nominated to head the country's new financial and capital markets regulatory body.
Latvia's accession to the Council of Europe's 1999 criminal law anti-corruption convention was approved in the first reading by the Parliament. The ratification process was initiated as part of the anti-corruption program adopted by the Latvian government. The convention coordinates corruption-related legislation among its participants and provides for international cooperation in the fight against corruption.
German insurer Alte Leipziger acquired three Latvian insurance firms to form the second largest insurance group in Latvia. The value of the deal was not released. After merging its new acquisitions and the two other Latvian firms it already owns, the group assembled by Alte Leipziger will have a market share of 21 percent.
LUKOil Baltija, the Baltic arm of Russia's LUKOil, said it saw its 2000 crude oil reloadings through Latvia's Ventspils Nafta rising from 2.1 million tons in 1999 to between 2.7 and 2.8 million tons in 2000.
The Latvian securities market commission said on Friday it had prepared a draft investor guarantee law, in line with European Union directives. It is expected to come into force in January 2002.

Exchange Rates
As of 13 October 2000

Currency Latvian
lats
(LVL)

1 US dollar 0.62

1 British pound 0.91

1 German mark 0.27

1 euro 0.53

Daria Kulagina, 13 October 2000

Moving on:

Sources:

Diena
Reuters
Neatkarīgā Rīta Avīze
LETA
BNS
Dienas Bizness
Bizness Baltija