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Latvia Report Latvia Report
by Euro Reporter
2009-02-14 09:44:46
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Struggling with debt

Rising corporate debt levels in Latvia have hit businesses and individuals hard as the economy continues its downward spiral and it becomes more and more difficult for many to pay back their loans. The situation has caused a chain reaction for individuals who are in turn suffering as a result of lost work hours and unpaid wages. Loans with overdue payments reached 15 percent of the Latvian bank loan portfolio at the end of last year, growing 8.2 percentage points from late 2007, reported the Finance and Capital Market Commission (FKTK) financial watchdog. As a result of escalating debt levels, many businesses and banks are turning to debt collection agencies in a bid to recoup losses.

The number of corporate debtors has grown sharply since the fall of 2008 and looks set to rise further as Latvia struggles to emerge from a massive economic slump. Marcis Katajs, board member of Latvia’s Paus Konsults debt collection company – which counts Swedbank, SEB Banka, as well as mobile operators Tele2 and LMT and cosmetics retailer Oriflame Latvija among its biggest clients – said levels of unsettled debts had increased across all sectors, with real estate and service industries the hardest hit. Last year in Latvia the number of corporate debtors rose steeper by percentage rate, while the number of individual debtors increased numerically.

The crisis obviously hits the poorer European countries harder.


Minister’s resignation

A day of protests by Latvian farmers produced tangible results Tuesday, forcing the Baltic nation's agriculture minister to resign and producing an improved aid package for the agricultural sector from government. Sub-zero temperatures and icy roads proved to be only small obstacles to farmers as they descended on the capital, Riga, from across the country to demand financial support and the resignation of Agriculture Minister Martins Roze. Protestors set up a picket outside the agriculture ministry with their tractors and trailers parked in surrounding streets.

The mood was good-natured, but protestors insisted the farming industry needed much more support than government was offering and called on Roze to quit. Protestor Inese from Braslava in the heart of northern Latvia's farming country told Deutsche Presse-Agentur.

Traditionally farming has been the real economic force in Europe.


Court jails anti-graft officers

A Latvian court on Monday convicted two anti-corruption agents for embezzlement and abuse of office, in a case that carries vestiges of a larger political conflict. The Riga district court said it had sentenced Janis Imsa to seven years in prison, while his former superior Indra Veipa received five years.

Imsa and Veipa, who were mid-ranking officials at Latvia's anti-graft agency, the KNAB, were arrested last May at the tail end of a scandal which had spiraled into a major political battle in the Baltic state. Imsa, who pleaded guilty, was convicted of embezzling almost 83 000 lats (118 000 Euros, 152 000 dollars) in funds seized during anti-corruption investigations. Veipa pleaded not guilty to embezzlement and was acquitted on that charge but convicted of abusing her position. The court rejected defense claims that the embezzlement had been part of an alleged set up to undermine Aleksejs Loskutovs, who had been at the helm of the KNAB since 2004.

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