CER | Latvia and Russia agree on power

Signs from Russia

In an interview with Latvian radio, President Vaira Vīķe-Freiberga said that she had recently received certain signals from Russian officials "which create a positive and hopeful atmosphere and which allow us... to make certain steps in the immediate future that would help to channel [relations with Russia] into a slightly more positive direction."

She also cited recent visits of parliamentarians and Latvia's presidency of the Council of Europe as factors that have helped improve relations. "The foreign minister's visit to Moscow [in January] has, to a certain extent, paved the way to a further dialogue," Vīķe-Freiberga said. The breaking news on Friday about Vīķe-Freiberga's meeting with Putin in Austria seems to confirm the president's optimism.

Finland to increase aid

During his two-day visit to Riga, Finnish Prime Minister Paavo Lipponen said that Finland would increase its economic, political and administrative aid to Latvia to help the country prepare for membership of the European Union. Finland shares the opinion that every country is entitled to choose its own security arrangements and supports "the open door" principle adopted by NATO, Lipponen said.

At their meeting in Riga, the three Baltic prime ministers agreed to promote cooperation, particularly in five fields: integration into the EU and NATO; a common energy market; multilateral traffic infrastructure projects; and simplification of border-crossing procedures.

The three defense ministers will meet next week in Tallinn to discuss cooperation, with joint procurement of arms and equipment high on the agenda. The Baltic states have already combined their efforts to modernize antitank weaponry. Another potential field of cooperation is in purchasing of airspace monitoring radars.

Latvia joins anti-corruption convention

Latvia ratified The Criminal Law Convention on Corruption. This Council of Europe document is an instrument aiming at the coordinated criminalization of a large number of corrupt practices. It provides for improved international cooperation in the prosecution of corruption offences (see the Council of Europe website for more details).

Agreeing on power

Energy company chiefs from Lithuania, Latvia, Estonia, Russia and Belarus signed an agreement on the parallel operation of their national electricity grids. The document provides legal basis for cooperation between the electricity operators of the five countries, which share the united energy system built during the Soviet period.

Limiting the deficit

The International Monetary Fund and Latvia agreed to limit this year's budget deficit to 1.7 percent of GDP. "We agreed that the budget should be implemented as passed," Jerald Schiff, IMF mission chief for Latvia, told reporters after talks with Latvian Finance Minister Gundars Bērziņš. Bērziņš said that the government would aim to limit next year's fiscal deficit to one percent of GDP.

High-tech help

The parliament approved in the final reading a 30 percent corporate income tax break for ISO-certified high-tech and IT firms. Pharmaceuticals producers with Good Manufacturing Practice certificates also qualify for the tax break. The current corporate income tax rate is 25 percent.

Is this integration?

The Latvian government adopted the national "Integration of Society in Latvia" program, which has been in drafting for nearly three years. The program provides for "integration aimed at mutual understanding and cooperation between individuals and various groups within the legal system of the Latvian state on the basis of the Latvian language as the state language and loyalty towards the Latvian state."

A draft resolution grants LVL (Latvian lats) 200,000 (about USD 326,000) from the state budget for the implementation of the program, which will also be funded by foreign and private contributions.

Stalin-era agent freed

The Supreme Court lifted the home detention sentence of a Stalinist-era KGB agent convicted last year for sending dozens of Latvians to die in Siberian prison camps. The court ruled that Yevgeny Savenko, 86, would no longer be confined to his home for the remainder of the two-year sentence. Savenko was convicted of genocide in October 1999 for ordering the deportation of about 60 police, border guards, students and others early in the Soviet occupation of Latvia.

Monitoring food

The Latvian government announced it is setting up a regulatory body to oversee food and livestock production following a fatal dysentery outbreak in January. The new agency will combine efforts of the Agriculture and Welfare ministries to inspect sanitation at dairies, slaughterhouses, canneries and other food producers. The new agency will also draft food safety legislation that meets European Union requirements.

And in business news...

The Dutch adviser for the sale of Latvijas Kuģniecība (Latvian Shipping Company, LASCO), BDO New Markets, informed the cabinet that all potential bidders for LASCO's 68 percent stake qualify as potential strategic investors with turnover higher than USD 191 million. Russian oil concern LUKOil will not participate in privatization of LASCO, the company's spokesman said.
Russia plans to increase crude exports through Baltic terminals and Novorossiisk by eight percent in February. First quarter exports through Ventspils will rise to 1.2 million tons from 0.94 million tons.
The executive council of the fixed-line telephone monopoly Lattelekom stated that the company cannot complete digitalization of the country's network by the end of the year as stated in the agreement between the Latvian state and Tilts Communications. Tilts, controlled by Finland's Sonera, holds a 49 percent stake in Lattelekom.
Liepājas Metalurgs steel mill said it was looking to receive an annual quota for exports of 200,000 tons of "rebar" (steel re-enforcement bar) to the European Union. Metalurgs had to stop exports to Canada as of the beginning of this year, after Canada introduced an anti-dumping import tariff of 25 percent. In 2000, Metalurgs exported 15 percent of its product to Canada.
Sweden's TV3 was awarded a national terrestrial TV broadcasting license in Latvia. TV3 will thereby increase its reach from 75 percent to more than 95 percent of the households in Latvia and now will have full national terrestrial distribution in all three Baltic countries.

Daria Kulagina, 9 February 2001

Moving on:

Sources:

Diena
Reuters
Neatkarīgā Rīta Avīze
LETA
BNS
Dienas Bizness
Bizness Baltija