Books on Latvia
Update No: 284- (27/08/04)
Latvia's equivalent of Mandelson
The post of being a country's EU Commissioner is becoming more important than
ever, nowhere more so than in the UK, where EU membership itself is a very
sensitive issue. The appointment of Peter Mandelson to the job for the UK
recently has caused an immense brou-haha that some think could be Blair's fatal
last mistake, finishing off his premiership. Mandelson, Blair's closest ally and
the creator of New Labour, is detested by Old Labour and an internal revolt to
topple the prime minister in favour of Chancellor of the Exchequer Brown has
become just that bit less unlikely, although don't bet on it, given the survival
skills of Blair.
Something not wholly dissimilar is happening in Latvia. Latvia's Green Prime
Minister Indulis Emsis proposed on August 3rd parliamentary speaker and party
colleague Ingrida Udre to replace former foreign minister Sandra Kalniete as the
Baltic country's European Commissioner. "I used my right to name Ingrida
Udre," Emsis told reporters after a meeting with parties in the governing
The announcement followed a battle within the three-party minority coalition
over who should represent Latvia at the executive of the European Union, which
it joined on May 1 with nine other countries. Emsis used his right to choose
Latvia's commissioner after the three parties failed to agree on a candidate at
a meeting on August 3rd after several days of talks.
Udre, aged 45, entered politics in 1998. She entered parliament for the Greens
and Farmers party in 2002, being elected parliamentary speaker in the same year.
She has been awarded the portfolio of the Taxation and Customs Union in the
A coalition partner, the People's Party, had strongly backed Kalniete, aged 51,
who was Latvia's ambassador to France before becoming foreign minister in 2002.
Emsis' move prompted an angry reaction from members of the People's Party,
saying it would consider pulling out of the shaky coalition. "It is a very
serious situation and we will consider it," Defence Minister Atis Slakteris
of the Peoples Party said. "We cannot rule out a situation where we could
leave the coalition in the future," he said. He said the centre-right party
had started negotiations with the biggest opposition party New Era.
Emsis told reporters he doubted the appointment could destabilise government.
"It is not serious to talk now of some coalition partners leaving the
coalition," he said.
Short-lived coalition governments are common in Latvia, a Baltic former republic
which joined the European Union on May 1 and NATO on March 29.
The EU's 10 new members nominated an interim commissioner to serve in the last
few months of life of the current Commission. But since then Latvia has had a
change of government. Kalniete, who has no party affiliation, was nominated by
the former government of New Era prime minister Einars Repse.
The next commission takes over in November.
Udre speaks Latvian, English and Russian. She has an economics degree and as a
student was a passionate basketball player.
Right-wingers hold talks
The appointment of Udre had immediate repercussions right across the political
The People's Party, the largest partner in Latvia's three-party ruling
coalition, announced after talks with the opposition New Era party that it did
not rule out forming a new government, if New Era proposed better ideas than
those of Premier Emsis. New Era leader and former Prime Minister Einars Repse
told reporters that his party had offered the People's Party to form a new
right-wing government together with the nationalist Fatherland and Freedom/LNNK
at a meeting on Aug 3, the very day of the Udre appointment.
The two parties - the strongest in terms of number of seats in Parliament - will
form several expert working groups to find solutions to problems in several
spheres vital to the national interest - e.g., health care, finance and budget
policy. "It is important for the people that the government and Parliament
yield specific results and drive to improve the living standard and economic
growth," said Repse. The former prime minister said New Era would not join
Emsis' "cabinet of left-wing and pro-Moscow forces."
Atis Slakteris, leader of the People's Party, said his party has always stressed
that the best government for this Parliament would be a cabinet composed of the
People's Party and New Era. He said the People's Party would be ready to work in
a new cabinet together with New Era, if the problem solutions proposed would be
better than those proposed by Emsis' cabinet. He said the People's Party would
assess the situation.
He voiced a hope New Era might support the budget, while Repse said that, since
it was in opposition, New Era would not support the budget but would prepare its
It was not clear how Emsis' choice to back Udre for the country's European
commissioner post, despite the People's Party support of Sandra Kalniete, would
affect the People's Party decision. Repse said that forming a new government
would make sense, if it could do things better. New Era, he claimed, was capable
of doing exactly that. Nevertheless, Slakteris described the work of the current
Emsis government as very good and said the People's Party would only be ready to
form a new government if it was sure it would work better. Slakteris said the
People's Party was not set to pull out of Emsis' Cabinet at this point, but he
said a minority Cabinet had shortcomings that might make it difficult to adopt
Ryanair ready to stretch wings, take off for Riga
The UK-based budget airline Ryanair recently announced it would launch daily
flights to Riga from London, Frankfurt and Tampere as of October as part of its
long-term plan to win a part of the lucrative East European air industry, The
Baltic Times reported.
Ryanair CEO Michael O'Leary told reporters gathered at Riga International
Airport that the discount airline chose the Latvian capital over Tallinn and
Vilnius due to the government's willingness to cooperate. If the three routes to
Riga are successful, the company will schedule more to cities such as Brussels,
Rome, Barcelona, Stockholm and others.
Ticket prices for one-way travel to Riga will cost €4.99 from Tampere, £3.99
from London and €7.99 from Frankfurt plus airport taxes - though the price may
change depending on time of flight and other factors. The prices will also
depend on whether the carrier handles at least 300,000 passengers at RIA, which
is part of the government's new scheme to entice airlines to bring in more
passengers to the Latvian capital.
O'Leary said he realised the airline would not earn a profit from the routes but
for now was more interested in getting established for the long term in Eastern
Europe. Also, tickets will be sold only on the Internet by credit card and will
remain in effect until spring, after which the fares will likely increase.
Deputy Prime Minister and Transport Minister, Ainars Slesers, said Ryanair would
not receive any special discounts at RIA but that the airline's presence would
increase competition. He said he was happy that Latvia was ahead of Lithuania
and Estonia in this industry and hoped that in next five years the Riga airport
would serve 5-6m passengers annually. Slesers said the next discount airline to
start flying to Riga would be Britain's EasyJet. The government has
significantly cut airport fees and passenger taxes at RIA in an effort to entice
more airlines and boost passenger turnover.
Riga airport welcomes results
Riga International Airport registered the biggest passenger turnover in the
Baltics in the past seven months - 538,894 passengers, according to statistics
from Riga, Vilnius and Tallinn airports, New Europe reported.
Tallinn Airport's passenger turnover was 537,166 from January to July, and
Vilnius Airport's was 533,835. Riga Airport also registered the biggest increase
in passenger turnover over the respective period in 2003 - a 38.5% increase. The
figure in Tallinn was 37.8% and 32.5% in Vilnius. 15,036 flights to/from Riga
were registered in the first seven months of the year, 41.2% more than in the
respective period in 2003. The respective figures in Tallinn were 14,773 flights
(0.8% fall) and in Vilnius - 12,349 flights (16.3% increase). Riga Airport's
cargo turnover, 6,268 tonnes, has also been the biggest in the Baltics so far
this year (almost double from the respective period in 2003). Tallinn Airport's
cargo turnover has increased 6.4%, up to 3,005 tonnes, and Vilnius Airport's -
2.3%, totalling 2,994 tonnes.
S&P rates Latvia foreign currency A-
Standard & Poor's Ratings Services said recently it raised its long-term
foreign currency sovereign credit rating on Latvia to A- from BBB+, New Europe
The A- long-term local currency and A-2 short-term foreign and local currency
sovereign credit ratings on Latvia were affirmed. The outlook is stable.
Standard & Poor's credit analyst, Remy Salters, said the upgrade reflects
sustained improvements to Latvia's economic structure in the context of EU
accession, as well as solid medium-term growth prospects.
Latvijas Gaze to increase investment, build reservoir
Latvian gas concern Latvijas Gaze plans to invest 25.4m lats in 2004, which is
58.8 per cent more than in 2003, company CEO, Adrians Davis, said recently, New
A priority area for investment this year will be the construction of a new
compressor station and a reserve compressor unit at the Incukalns underground
gas reservoir (24.4 per cent of planned investment), the construction of gas
distribution pipelines and also the gasification of towns and villages, he said.
Company investment in 2003 amounted to 16m lats. Davis said that Latvijas Gaze
investment in the first half amounted to over 6m lats. The company invested in
modernising the Incukalns reservoir and in developing the pipeline system.
The company's audited net profit in 2003 increased 6.8 per cent to 13.015m lats,
with turnover up 13.3 per cent to 112.9m lats. Shareholders have approved the
2003 dividend plan that will pay 0.25 lats per share, with a par value of one
Dividend payments will total 9.975m lats or 76.6 per cent of the net profit
earned by the company last year.
The remainder of last year's net profits, or 3.04m lats, will be put into the
reserve fund, in addition to 6,138 lats in undistributed profit from the
The company paid 0.2 lats for 2002 and earlier dividends fluctuated between 0.06
and 0.17 lats. The company sold 1.63 billion cubic metres of natural gas in
2003, 3.8 per cent more than in 2002.
Itera Latvija and Gazprom each own 25 per cent of Latvijas Gaze, Ruhrgas owns
28.66 per cent and E.ON Energie owns 18.06 per cent. Charter capital is 39.9m
lats, split into 39.9m shares, par value one lat each.
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