Lettlandi er stjórnað frá Brussel

Ríkisstjórn Lettlands fær ekki heimild til að taka neinar stórar ákvarðanir um fjármál ríkisins án samþykkis frá höfuðstöðvum Evrópusambandsins annars vegar og hins vegar Alþjóðgjaldeyrissjóðnum. Þetta eru skilyrðin sem ríkisstjórnin í Riga þarf að skrifa upp á til að njóta aðstoðar Evrópusambandsins. Í reynd er lettneska ríkisstjórnin að viðurkenna að ríkið er ekki lengur fullvalda, segir Sænska dagblaðið.

EU:s fortsatta finanshjälp till Lettland villkoras med att inga större ekonomiska beslut får fattas utan att EU och IMF (Internationella valutafonden) tillfrågas först - i praktiken ett omyndigförklarande av regeringen i Riga. 

Íslenskir aðildarsinnar spyrja jafnan með þjósti hvort smáríki Evrópusambandsins séu ekki fullvalda. Svarið er komið.

Hér er umfjöllunin í Sænska dagblaðinu.

Athugasemdir

[Jón (IP-tala skráð) 21.7.2009 kl. 17:12]

Páll minn: Þú ættir að slá upp í sænskri orðabók. Lettar hafa verið sviptir fjárræði, tímabundið, þar til þeir eru búnir að koma lagi á ríkisfjármálin.

[Gísli Baldvinsson (IP-tala skráð) 21.7.2009 kl. 17:32]

Ah, Jón var aðeins á undan mér! Ekkert nýtt þarna.

[V. Jóhannsson (IP-tala skráð) 21.7.2009 kl. 17:48]

Að vera sviftur fjárræði er nánast það sama og vera sviftur sjálfstæði. Þú mátt kjósa, en getur ekki keypt þér bíl nema með leyfi stóra bróður, sem borgar. Að vísu er talað um stærri efnahagsákvarðanir, en þetta er einmitt það sem bíður íslensku þjóðarinnar, ef landið gengur í EU. Því miður!

[Ragnhildur Kolka, 21.7.2009 kl. 17:52]

Í ESB er, jú, leyfilegt að kjósa, en ef þú kýst ekki samkvæmt vilja Brussel þá kýstu bara aftur þar til þú hefur kosið rétt.

[Jón (IP-tala skráð) 21.7.2009 kl. 17:53]

Það hefur sýnt sig að Íslendingar kunna ekki fótum sínum fjárráð og ættu því að vera sviptir fjárræði líka.

[Hákon Jóhannesson (IP-tala skráð) 21.7.2009 kl. 17:54]

Páll, þegar óreiðumönnum á borð við Ottó Spokk tekst að gera bindandi samning í auðlindum landsins til 100 ára með einu pennastriki og smá aðstoð frá örfáum auðtrúa  eyjaskeggjum er nú fokið í flest skjól.

Ísland er orðinn auðveld bráð þykir mér og þarf ekki teiknaða mynd né umfjöllun í erlendum fjölmiðlum til a sjá það.

Það er oft gott að rýna í tíma gögn til að spá í framhaldið.  Sjá hvert stefnir.

Þessi 100 ára óreiðusamningur og fleiri landsölusamningar sem eru uppi á borðinu núna leggast illa í mig því þeir sýna fullkomlega hvert stefnir.

Ég er mjög orðvar maður; en mér dettur í hug orðin heimska; ræð bara ekki við það.

Ég tel að við Íslendingar hljótum að geta betur en þetta.

[Gunnar Rögnvaldsson, 21.7.2009 kl. 18:06]

Lettland 20. júní 2009

Brief Latvia EU Loan Update

by Edward Hugh

July 20, 2009

Well, there is still effectively no word from the IMF. But The EC did today release an addendum to its memorandum of understanding with Latvia identifying a number of economic and fiscal policy measures it wants the country to enact before it receives next chunk of funding. The document, which is a pretty rough-and-ready PDF photocopy, can be found here. Reading the document, one thing seems certain: the upcoming tranche of 1.2 billion euros will not now be sufficient to cover the budget deficit for 2009, since the EC requires half of the money to be set aside for the financial sector - which prompts the question, is the nationalized Parex bank really as healthy as the government and the bank’s leadership have previously said it was?

Other items of interest in the document are the proposal to raise VAT in 2010 from 21% to 23% if other forms of revenue raising cannot be identified. The impact on already very hard pressed retail sales is not too hard to imagine. The introduction of a residential real estate tax is also proposed with local authorities being empowered to increase the real estate tax to 3% of cadastral values. If implemented, this will do only one thing: further reduce Latvian real estate values which are already down 50% from their peak, and on whose bottoming-out any hope of ultimate recovery depends.

Which is another way of saying that in macro economic terms the document leaves rather a lot to be desired, and essentially it is hard to find any item which is actually going to stimulate rather than flatten a recovery.

Also worthy of note is the requirement that Latvia now has to closely coordinate policy with the EU and the IMF.

“All significant Cabinet decisions or other decisions with a fiscal impact, including on social security or any guarantee scheme, shall be announced and undertaken only after discussions with the EC and the IMF,”

The document also stipulates that the government will have to report every month on all key aspects of spending and revenue, including providing a breakdown for each ministry as well as for local governments. These performance criteria, given the now near total dependence of the country on external support - de facto, as a sovereign state Latvia has effectively ceased (at least temporarily) to exist, some 19 years or so after its foundation - are not surprising in and of themselves, but it could have been hope that the country would have been better served in terms of the kind of advice which is being offered. The document repeated that Latvia should aim to reach a budget deficit of 10 percent of gross domestic product (GDP) this year, 8.5 percent in 2010, 6 percent in 2011 and 3 percent in 2012, numbers which, if my back of the envelope calculations are not totally awry mean that Latvia’s debt to GDP will be outside the EU 60% limit by the time the deficit comes down under 3%, depending on GDP performance in 2010 and 2011. In any event it will be touch and go. So you enter by one door, only to leave by the other.

========================

 

1. Dave Says: 
   July 20th, 2009 at 6:54 pm

   Just want to say thank you for keeping us so-well informed about the rather tragic economic fate of Latvia. Let’s indeed hope for better external advice in the future for Latvia.

2. govs from Latvia Says: 
   July 20th, 2009 at 7:51 pm

   Dear Edward,

   total control is not something unknown in Latvia, we were controlled 1940-1990, and in reality the Soviet control now seems much more sane as the present total chaos where Angela wants a different toy as Nicola, and everything is becoming totally darned for smaller brothers.

   The memories of predictability and clarity of Soviet times will play an enormous role for next parliamentary elections in Latvia scheduled regularily for the Fall 2010. For EP elections most voices already were gained by the former Communist leader of Latvia Alfreds Rubiks.

   The advanced Soviet regime was somewhere depressive and too predictable and therefore boring, however, it was a paradise compared with the hell going on now in Latvia.

   There are rumours that a national catastrophe-state of emergency can be amended by the parliament to cancel the next regular general elections in 2010. Let’s see.

3. Edward Hugh Says: 
   July 20th, 2009 at 8:51 pm

   Hi govs,

   “total control is not something unknown in Latvia, we were controlled 1940-1990,”

   Well, all this talk about how people survived in the “good old days” of the USSR does highlight one of the greatest dangers in the current crisis, namely that a huge chunk of the economy simply gets driven underground.

   Since national solidarity to say yes to almost everything the EU officials (who are doling out the money, after all) ask must be at an alltime high, while national determination to act on that having said yes hits an alltime low, we should all easily be able to imagine how just all this will pan out.

4. Twitted by z49 Says: 
   July 20th, 2009 at 9:24 pm

   [...] This post was Twitted by z49 [...]

5. govs from Latvia Says: 
   July 20th, 2009 at 9:58 pm

   That happens already, retail trade and SMEs are rapidly moving underground.

   However, there is one more serious risk. It is absolutely not guaranteed that EU and IMF will have a real counterpart to deal with in the nearest future. Because the present government is becoming more and more impotent, the political parties are segregated and are running away from responsibility.

   A more powerful layer is that of higher state officials, however, the political layer is acting more and more against them.

   Early elections can lead to a total chaos, its not a solution.

   So it can be very real perspective that EU and IMF will have to talk with subjects having unclear mandate.

   One interesting point in the amendment is the asked statistics about loans converted from EUR to LVL. This seems as a path towards an exit strategy.

6. Janis Says: 
   July 21st, 2009 at 8:26 am

   Dear Govs,

   Please stop spreading incorrect information about Latvia!

   In EP elections most votes were gained by liberal nationalist Sandra Kalniete, not communist Rubiks.

   As for Soviet times comparison to nowadays, the Soviet days are still a league off in terms of living conditions, not to mention freedom of speech and movement - if you don’t like life in Latvia at the moment you are welcome to go to Ireland and live there for some time - wasn’t an option in Soviet times!

7. Edward Hugh Says: 
   July 21st, 2009 at 9:31 am

   Incidentally Dave,

   “Let’s indeed hope for better external advice in the future for Latvia.”

   In the interest of fairness and balance, and while noting that Latvia has not been receiving the soundest of advice even within the terms of reference of maintaining the peg, we should never forget that it is the Latvian’s own representatives who have been the most proactive here.

   Valdis Dombrovskis is former MEP, former Finance Minister and former employee of the Bank of Latvia (BoL). The current Finance Minister, Einars Repse, is former governor of BoL. At the head of economic policy there are thus a trio of current or former BoL people - Rimsevics (the current governor), Dombrovskis and Repse. This helps to some extent to explain why the fixed exchange rate is a mantra written in stone. In Latvia, the problem is not the “Treasury View”, but the central bank one.

8. XXl Says: 
   July 21st, 2009 at 9:59 am

   In news it jus appeared, that owners of the Parex bank, since the bailout each took out every month more than 200k $

   I cant believe whats going on, there will be a movie in 2042 , The Tradegy of Latvia, The fastest Growing Country goes Bust by couple Assholes, who are gays and are in Love with Mr President of Russia, Ouh actually he is Ex President, but you can sometimes it forget.

9. vince Says: 
   July 21st, 2009 at 10:36 am

   Janis, in 1991, Latvians were having babies. They’ve stopped, as Ed has shown.

   And going to Ireland won’t help, ’cause their economy is imploding too.

10. govs from Latvia Says: 
    July 21st, 2009 at 11:42 am

    The impact of BoL is, of course, high, however, there is an immanent incompleteness in Latvian legislation. As the Law of BoL evolved relatively lately and the final phase happenend in a period of relative stability, the independence of BoL is incomplete. Despite the fact that governor of the BoL can not be dismissed, except he dies or becomes insane (is he?), the Law of BoL itself can be changed with a simple majority, as it proved 1 month ago when profit of BoL was channelised to state budget. (Trichet was very nervous about this simplicity).

    So moving the currency board out of the BoL is not a big problem. Of course, in the new memorandum every decision of Latvian government and parliament must be approved by IMF and EU (so exteme a control did not exist even in the USSR).

    However, why should it be valid for the next parliament? The Latvian constitution does not provide for external higher powers to revise parliamentary decisions.

    
    

 

[Gunnar Rögnvaldsson, 21.7.2009 kl. 18:07]

Lettland 21. júlí 2009 14:55 

Danskebank’s EMEA Daily Latvian Quote Of The Day

by Edward Hugh

• Quote of the day: “Representatives sitting in Washington and educated at Yale do not fully understand what is going on in Latvia”, Latvian Economics Minister Kampars yesterday on the Latvian TV programme 900 sekundes.

As they point out, when the borrowers publicly criticise the lenders in this way, something must be going on.

• While Mr. Kampars might be right on his assessment of the IMF staff, it is certainly unhelpful for further negotiations (if there are to be any) to bad mouth the institution that is supposed to give Latvia a loan. In our view it increasingly looks like the IMF will not pay out the next instalment on Latvia’s loan. This not only has ramifications for Latvia, but should also be a reminder to investors that the IMF is not just a “money machine” that automatically bails out all countries with funding needs

Parex Update

The situation at Parex bank seems to be giving rise to all sorts of speculation at the moment. It has been suggested that the Banks owners have been systematically taking advantage of the bailout to line their own pockets. Some support for this view can be found in the statement of the Latvian Finance Ministry last Friday that it had asked the state prosecutor’s office to probe Parex takeover last year

RIGA, July 17 (Reuters) - Latvia’s Finance Ministry said on Friday it had asked the state prosecutor’s office to probe the state takeover last year of a major bank that helped trigger the need for the country’s IMF-led bailout.

• The IMF has delayed its latest share of lending in the bailout, though the EU has decided to give a further 1.2 billion euros. The prime minister said he would hold more talks next week with the International Monetary Fund (IMF). Some local media reports and politicians have criticised the wisdom of taking over the country’s second largest bank, Parex, and the way it was done. Most recently the media has reported that some former employees left with big handouts. Finance Minister Einars Repse said he had asked the prosecutor’s office to investigate the takeover to clear up such controversies

What the connection is (if any) between the “Parex affair” and all the other unknowns we have in our equation set at the moment still remains to be seen.

[Elvar Eyvindsson (IP-tala skráð) 21.7.2009 kl. 18:09]

Jón hér að ofan er kanski einmitt að sýna rétt andlit áhugamanna um inngöngu í ESB.  Honum finnst rétt að svifta okkur fjárræði vegna nokkurra manna sem settu allt í kalda kol.  

Ef menn vilja gefast upp og varpa stjórnun landsins í hendur annarra þá er gott að það sé á hreinu.  Ef menn treysta sér alls ekki til að stjórna landinu þá er nauðsynlegt að hafa það á hreinu.  Ef menn bjóða kanski fram heilu listana til að stjórna landinu en undir niðri telja þeir að þeir geti það ekki og landinu sé betur borgið í höndum annarra þjóða þá er til ákveðið ljótt orð yfir það á Íslensku.

[Gunnar Rögnvaldsson, 21.7.2009 kl. 18:20]

de facto, as a sovereign state Latvia has effectively ceased (at least temporarily) to exist, some 19 years or so after its foundation 

 

Verði ykkur að góðu.

 

Ísland má aldrei að stíga fæti inn í ESB. Það verður endastöðin fyrir Ísland. Verður kirkjugarður Íslands

 

[Sigurður Þórðarson, 21.7.2009 kl. 19:42]

Það verður ekki á Kæfubelginn logið

[Arnar Guðmundsson, 21.7.2009 kl. 19:45]

SAMMÁ ASIGGA HÉRNA

[Arnar Guðmundsson, 22.7.2009 kl. 00:21]

RITSKODUN RITSKODUNN Á MOGGABLOGGINU 11.,,

[Einar Guðjónsson, 22.7.2009 kl. 00:32]

En ekki hvað ?? Þeir ráða ekki við sín fjármál, ekki frekar en íslendingar og hafa kosið að viðurkenna það og leita sér hjálpar. Við ættum að gera það líka.Við ráðum ekki við að reka nokkurt fyrirtæki svo það gangi.Alveg sama hvað það er. Hefur svo verið lengi.Alveg sama þó allir séu í vinnunni alltaf það dugir bara ekki

til. Við erum alltaf síðastir meðal Norður Afríkuþjóða. 

Að þessu leyti erum við spes en ekki út af neinu öðru. 

[Hjörtur J. Guðmundsson, 22.7.2009 kl. 10:09]

Það sem er fyrst og fremst að drepa Letta efnahagslega um þessar mundir er tenging gjaldmiðilsins þeirra við evruna sem þeir eru að fórna öllu öðru fyrir með hörmulegum afleiðingum.

[Gunnar Rögnvaldsson, 22.7.2009 kl. 12:26]

Já Hjörtur

Þetta er hin efnahaglega Evru-Víetnam styrjöld Lettlands og Eystrasaltsríkjanna. Ísland næst? Auðvelt að hefja eyðilegginguna en erfitt að enda hana. Engin útgönguleið nema efnahagslegt og demografískt sjálfsmorð.

Brussel er að reyna að koma í veg fyrir að grunn hagfræðilegur raunveruleiki nái fram að ganga í Lettlandi, þ.e. að gengi gjaldmiðilsins endurspegli ástand efnahags landsins til viðskiptalanda Lettlands - þ.e. að gengið verði fellt um 30-60%. IMF gerði þau mistök að ganga með til þessa skoðana Burssel í upphafi hjálparpakkans því Brussel er hrætt við gengisfellingu vegna bankakerfa margra landa ESB sem eru mörg í mjög svo brothættu ásigkomulagi (þið hafið jú heyrt þessa röksemdafærslu áður).

Í raun er það bankaelítan í Eystrasaltsríkjunum og Brussel elítan sem hafa náð að koma í veg fyrir þessa nauðsynlegu læknisaðgerð. IMF hefur verið haft að fíflum og það vita þeir núna. Þetta er Argentína all over again inni í miðju ESB

Finnish paper: devaluation would hurt the Baltic elite

Worst of all, the government, the European Commission and the IMF seem to have no exit strategy here. Like the Vietnam war, this recession may prove to have been a lot easier to get into than it was to get out of. Hanging on in the hope of a euro entry which may never be possible is no strategy. Those who didn't want to devalue got the Latvian people into all this, now perhaps they can explain to them how to get out

The Agony Continues - Latvian GDP Falls By 18%

[Gunnar Rögnvaldsson, 22.7.2009 kl. 12:36]

Eins og sjá má á þessari mynd er bankakerfi Lettlands næstum algerlega í eigu útlendinga. Svo, hver ræður í Lettlandi núna? Er það þetta sem Íslendingar vilja?

[Páll Blöndal, 23.7.2009 kl. 01:01]

Ofdekraðir ESB andstæðingar á moggablogginu
http://pallblondal.blog.is/blog/pallblondal/entry/918743/

[Almennur borgari (IP-tala skráð) 27.7.2009 kl. 19:23]

Ófróði og röklausi Páll Blöndal í moggablogginu.