Latvia

Bank Run Feared After ECB Unexpectedly Pulls Plug On Latvia Largest Private Bank

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– Bank Run Feared After ECB Unexpectedly Pulls Plug On Latvia Largest Private Bank:

Last week we reported that as part of a rapidly deteriorating banking crisis in Latvia, which culminated with the detention of central bank head Ilmars Rimsevics on suspicion of accepting a bribe of more than €100,000 (which prompted both the prime minister and president to demand his resignation, something he has so far refused to do), the European Central Bank froze all payments by Latvia’s largest private bank, ABLV, following U.S. accusations the bank laundered billions in illicit funds, including for companies connected to North Korea’s banned ballistic-missile program.

Then overnight the Latvian banking crisis escalated when in a statement released early Saturday, the ECB said ABLV Bank’s liquidity had deteriorated significantly, making it unlikely to pay its debts and declaring it “failing or likely to fail.” As a result, Latvia’s third largest bank will be wound up under local laws after the European Central Bank

Following the ECB’s decision, which also included the bank’s subsidiary in Luxembourg, the WSJ reported that Europe’s banking resolution authority decided the banks didn’t represent a systemic risk for their countries or the region and should be wound up by local authorities rather than be “bailed in” under EU rules.

And so, on Saturday ABLV said it would be liquidated. In four days, the bank claimed, it had raised enough capital to meet all its depositors’ demands and keep functioning, however “Due to political considerations the bank was not given a chance to do it,” it said in a statement.

Read moreBank Run Feared After ECB Unexpectedly Pulls Plug On Latvia Largest Private Bank

Latvia completes 23km of ‘anti-migrant wall’ on Russian border

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– Latvia completes 23km of ‘anti-migrant wall’ on Russian border:

Baltic states continue bolstering their frontiers with Latvia reporting the competition of the first 23km segment of a wire fence on its 276km border with Russia, designed to prevent “illegal immigrants” from breaching the perimeter.

Latvia’s fence construction began in 2015 and the first 23km section is ready, according to local media reports, citing State Border Guards spokeswoman Evgeniya Poznyak. The Latvian government has allocated an additional €6.3 million on the construction and is seeking to build 60km of fence in 2017.

Read moreLatvia completes 23km of ‘anti-migrant wall’ on Russian border

Northern Ireland Bans GM Crops to Keep Clean and Green Image

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– Northern Ireland Bans GM Crops to Keep Clean and Green Image:

Northern Ireland has joined Scotland, France, Greece and Latvia in announcing a full ban on GM crops under the new EU opt-out regulations. Environment Minister, Mark H Durkan announced Monday that he is prohibiting the cultivation of genetically modified (GM) crops in Northern Ireland.

…

NATO & allies stage thousands-strong drills across Europe

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– NATO & allies stage thousands-strong drills across Europe (RT, May 4, 2015):

Three sets of military exercises kicked off in Europe on Monday, involving thousands of servicemen from a variety of NATO nations and their allies, amid a wave of similar action across the area.

Estonia is holding its largest-ever military drills. Named Siil-2015 (Hedgehog), the maneuvers involve about 13,000 personnel. The number includes about 7,000 reservists, along with members of the volunteer Estonian Defense League.

Siil-2015, scheduled to last until May 15, also involves forces from the US, the UK, Germany, Latvia, Lithuania, Belgium, Poland and the Netherlands. American troops, who are staying in Estonia as part of the massive training operation Atlantic Resolve, will bring four Abrams main battle tanks to the exercise. British, Belgian and German air defense units, as well as several NATO warplanes, will also take part.

Read moreNATO & allies stage thousands-strong drills across Europe

US Sends Over 100 US Tanks, Armor To Latvia As Nuland “Confirms” Russia Delivering Weapons

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Related information:

– Despite Russian Warnings, US Will Deploy A Battalion To Ukraine By The End Of The Week

– Russia Warns NATO: Any Threat In Ukraine Will See Military Response

nuland-mccain-tyahnybok

– US Sends Over 100 US Tanks, Armor To Latvia As Nuland “Confirms” Russia Delivering Weapons (ZeroHedge, March 10, 2015):

No lesser trustworthy character than Assistant Secretary of State Victoria Nuland explained this morning that the US can “confirm” new Russian weapons delivery to Ukraine and that they “can tell” when Russia sends in new weapons (though offering no explanation of this statement). This comment to the Senate Committee comes a day after the US delivered ‘lethal aid’ to Latvia – 120 armored units (including tanks) – with US Army General John O’Conner who witnessed the tanks arriving on Latvian soil said, “Freedom must be fought for, freedom must be defended.” And finally, one more shot in the eye of the germans, deputy under-secretary of Defense Brian McKeon said the US is “actively considering more weapons for Ukraine,” seemingly implying they alreadt sent some?

The rhetoric is heating up

  • *ASSISTANT SEC. OF STATE NULAND SPEAKS BEFORE SENATE COMMITTEE
  • *U.S. CAN CONFIRM NEW RUSSIAN WEAPONS DELIVERY TO UKRAINE:NULAND
  • *NULAND SAYS U.S. CAN TELL IF RUSSIA SENDS IN NEW WEAPONS
  • *NULAND SAYS UKRAINE LEADERS KNOW IN RACE TO REFORM GOVERNMENT
  • *DEPUTY UNDER SECRETARY OF DEFENSE BRIAN MCKEON SPEAKS TO SENATE
  • *U.S. ‘ACTIVELY’ CONSIDERING MORE WEAPONS FOR UKRAINE: MCKEON

And this comes a day after the US delivered lethal aid to Latvia…

As RT reports,

Latvia has confirmed more than 120 armored units, including tanks, have been delivered by the US. According to the Latvian Ministry of Defense, these include M1A2 Abrams tanks and M2A3 Bradley armored vehicles.

Read moreUS Sends Over 100 US Tanks, Armor To Latvia As Nuland “Confirms” Russia Delivering Weapons

Move your arsenal! US tanks, APCs, Humvees roll through Latvia (VIDEO, PHOTOS)

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– Move your arsenal! US tanks, APCs, Humvees roll through Latvia (VIDEO, PHOTOS) (RT, Dec 12, 2014):

A freight train carrying a whole column of American armored vehicles has been caught on camera in Latvia. Dalbe Railway Station, where the train was reportedly spotted several days ago, is less than 300km from the Russian border.

The train was carrying at least 38 vehicles and several semitrailers, including eight Bradley Fighting Vehicles, nine M113 Armored Personnel Carriers (APCs), four petrol tankers, Heavy Expanded Mobility Tactical Trucks (HEMTTs), High Mobility Multipurpose Wheeled Vehicles (HMMWVs), an M88 Hercules Armory recovery vehicle, a couple of trucks, some tactical engineering and medical vehicles, at least four containers and a pair of railcars with ammunition.

Latvian authorities have confirmed to Delfi news portal that the train spotted on December 7 was loaded with the vehicles of the 1st Cavalry Division of the US and the train was heading to Lithuania.

Read moreMove your arsenal! US tanks, APCs, Humvees roll through Latvia (VIDEO, PHOTOS)

US tanks arrive in Latvia to ward off ‘perceived’ Russian threat (VIDEO)

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U.S. soldiers deployed in Latvia sit in an Abrams tank during a drill at Adazi military base October 14, 2014

– US tanks arrive in Latvia to ward off ‘perceived’ Russian threat (VIDEO) (RT, Oct 16, 2014):

US tanks have arrived in Latvia as NATO flexes its muscles in an apparent show of strength towards Moscow. The machines are being deployed across the Baltic States and Poland over the next two weeks and will be used for training exercises.

The 1st Cavalry Division, based at Fort Hood in Texas, was deployed in Adazi, not far from the Latvian capital of Riga. 150 soldiers used five M1A2 Abrams tanks, as well as 11 Bradley Fighting Vehicles in a training demonstration.

The commander of the 1st Brigade of the 1st Cavalry Division, John Di Giambattista said, “This is more than just a training mission. This is more than just a trip across the Atlantic; this is more than a multinational training exercise. This is how we demonstrate our nations’ commitment to reassure our NATO allies,” Reuters reports

Read moreUS tanks arrive in Latvia to ward off ‘perceived’ Russian threat (VIDEO)

The Russians Are Outtahere: ‘The Cypriots Killed Their Country In One Day’

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– The Russians Are Outtahere: “The Cypriots Killed Their Country In One Day” (ZeroHedge, March 25, 2013):

It appears the Cypriots (or more clearly the European leaders) do not appreciate the extent to which Russia has propped up the local economy. “When the Russians leave who is going to stay at the Four Seasons for $500 a night? Angela Merkel?” one wealthy Russian asks rhetorically, as The FT reports, they are receiving a deluge of overseas phone calls from helpful Swiss bankers looking to swoop up the deposit transfers. “The locals should understand: as soon as the money leaves, the people who go to restaurants, buy cars and buy property leave too. The Cypriots’ means of living will disappear,” and there are signs that the locals are getting how drastic this situation is, as a large billboard has sprung up at Larnaca Airport with a Russian flag and the words “Brat’ya ne predaite nas!” – “Brothers, don’t betray us!” Many Russian businessmen appear to have one foot out of the door already and are considering whih jurisdiction to move to as they await to see if Medvedev follows through on his threat to dismantle the double tax treaty with Cyprus.

And now the rumors are that billionaire Russian tycoon Roman Abramovich, owner of Chelsea Football Club, has been arrested in the USA.

Via The FT,

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One Cypriot lawyer with Russian clients said he had already been approached by half-a-dozen European banks in locales ranging from Latvia to Switzerland to Germany, some of them promising they could open new bank accounts for his clients in under an hour.

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“The Cypriots killed their country in one day,” says Mr Mikhin, referring to Friday March 15, when President Nicos Anastasides accepted the EU’s proposal to seize €5.8bn in emergency funds from Cyprus’s local and foreign depositors.

Read moreThe Russians Are Outtahere: ‘The Cypriots Killed Their Country In One Day’

163 Dead As Cold Snap Grips Europe

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–163 dead as cold snap grips Europe (AFP, Feb. 2, 2012):

WARSAW — A cold snap kept Europe in its icy grip Thursday, pushing the death toll to 163 as countries from Ukraine to Italy struggled with temperatures that plunged to record lows in some places.

Entire villages were cut off in parts of eastern Europe, trapping thousands, while road, air and rail links were severed and gas consumption shot up during what has been the severest winter in decades in some regions.

In Ukraine, tens of thousands headed to shelters to escape the freeze that emergencies services said has killed 63 people — most of them frozen to death in the streets, some succumbing to the hypothermia later in hospitals.

Read more163 Dead As Cold Snap Grips Europe

California Now One Of The Top 10 Government Default Risks In The World

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With the liquidity crisis surrounding the rollover of Greek debt subsiding, the probability of default for that country has plummeted from nearly even odds to just over one in three.

Last Week’s Numbers: 06 May 2010

highest-default-probabilities

Meanwhile, other state and national governments are showing continued stress. Venezuela tops the list with a CDS spread of 1049 and a risk of default now over 50%. Argentina and Pakistan are also now ahead of Greece which is now only the 4th most likely government in the world to default.

Most recent numbers: 11 May 2010

highest-default-probailities-2010-05-11

The usual suspects are on the list including Dubai, Ukraine and Latvia. The one thing to notice is that California has now cracked the top ten with a 20% default probability. For California muni bond holders, this number bears watching.

Read moreCalifornia Now One Of The Top 10 Government Default Risks In The World

Latvia: Government Collapses Amid Economic Crisis

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Latvia’s coalition government has collapsed after failing to tackle a crippling economic crisis.

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Banks had been braced for Latvia’s government to collapse

The People’s Party, the largest group in a five-party coalition, walked out amid disputes over how to cope with the country’s severe problems.

Unemployment has now hit 20 per cent and the economy contracted by 18 per cent last year.

The People’s Party quit after its action plan failed to get the backing of Valdis Dombrovskis, the Latvian prime minister, who labelled it “populist”.

Read moreLatvia: Government Collapses Amid Economic Crisis

Latvia Devalues Economy, Spares Currency to Save Path to Euro – IMF Report: Economy to Shrink a Total 27 Percent

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Nov. 6 (Bloomberg) — Electronics and clothing stores at the Galerijas Centrs in Riga’s old town fly banners offering discounts of as much as 50 percent.

Liga Kalnina isn’t buying. “Many friends have problems,” said the 28-year-old, whose salary was cut 25 percent in September. “They don’t have money now and they don’t know when they will.”

Their plight is part of Latvian authorities’ plan to save the Baltic country’s currency and economy, among the worst hit in Europe during the global crisis. By ratcheting down state wages and prodding companies to do the same, policy makers are betting the resulting plunge in consumer demand will curb inflation, bring it back in line with the euro countries, whose currency Latvia is trying to join.

Latvia’s inflation rate may turn to 1 percent deflation in October, according to the median survey of six economists, when the figures are released on Nov. 9. That would be the first annual deflation since the country split from the Soviet Union in 1991 and became a market economy. It compares with a rate of 17.9 percent in May 2008.

Prime Minister Valdis Dombrovskis and Central Bank Governor Ilmars Rimsevics are resisting pressure to drop the lats out of its 2 percent trading band with the euro because a devaluation would throw Latvia off the path to joining the common currency.

Devaluation Shock

Read moreLatvia Devalues Economy, Spares Currency to Save Path to Euro – IMF Report: Economy to Shrink a Total 27 Percent

Standard & Poor’s downgrades Baltic states’ debt ratings

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The US should have been downgraded a ‘looong’ time ago:

– The Greatest Economic Collapse Is Coming:
“To give you an idea of how big a problem these deficits are, consider that the US government could tax its citizens 100% of their earnings and NOT have a balanced budget.” (!)

– Richard Fisher, president of the Dallas Federal Reserve Bank:
The“very big hole” in unfunded pension and health-care liabilities is over $99 trillion.
(Full article: Here)

– Glenn Beck: United States Debt Obligations Exceed World GDP

– Federal obligations exceed world GDP

S&P like the Obama administration is controlled by the elite behind the scenes.

The sovereign debt of Latvia and Estonia have been downgraded as the brutal slump plays havoc with public finances and tests commitment to euro currency pegs across the Baltic states.


Tallinn in Estonia, where sovereign debt has been downgraded

Standard & Poor’s, the credit-rating agency, cut Latvia’s rating to “BB” and warned that its economy will contract by a further 16pc this year. The public debt will vault from 19pc of GDP last year to 80pc by 2011. “This very fast increase in debt is unprecedented,” said Moritz Kraemer, S&P’s head of sovereign ratings.

S&P said the country is facing a “struggle” to find a path back to growth while also maintaining its currency peg, but the agency stopped short of advising whether devaluation would help.

There is an intense debate in the Baltics over whether the euro pegs are themselves causing an unnecessarily harsh adjustment, entailing salary cuts of up to 20pc. The International Monetary Fund had privately suggested a devaluation in Latvia to help cushion the blow, but this was overruled by the European Union on grounds that most of the country’s corporate and mortgage debt is in foreign currencies.

GDP has fallen 20pc in Latvia and 22pc in Lithuania over the past year – more concentrated falls than anything seen in the Great Depression. Both countries expect unemployment to peak at almost a quarter of the workforce.

Read moreStandard & Poor’s downgrades Baltic states’ debt ratings

Sweden hit by Baltic crisis plans to part-nationalise banks

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Sweden is preparing to part-nationalise banks exposed to the economic collapse in Baltic states, raising fears that a string of Western European countries could face similar fallout from rising defaults in the former Communist bloc.

swedbank
Swedish banks have lent more than $75bn (£46bn) to Latvia, Lithuania and Estonia, led by Swedbank and SEB. Photo: REUTERS

Finance Minister Anders Borg said the Swedish state will buy stakes in distressed banks if they fall deeper into trouble but will impose draconian terms.

“We want to be very clear so that people know what could happen,” he said. “If the banks come to us with big credit losses, where they have previously earned big money on lending, then shareholders will take the consequences. We’re going to be clear that insolvent banks that don’t meet legal requirements will see an injection of funds, primarily through government ownership.”

Swedish banks have lent more than $75bn (£46bn) to Latvia, Lithuania and Estonia, led by Swedbank and SEB.

Read moreSweden hit by Baltic crisis plans to part-nationalise banks

Ukraine and Lativia warn of financial disaster in the West if they are not helped

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Western European banks are exposed to over £1 trillion of eastern European debt, leading to comparisons with the subprime crisis in the United States. Austria is particularly affected, with an outstanding loan portfolio to eastern Europe of £213 billion, 71 per cent of GDP.

Even worse: ‘Toxic’ EU bank assets total £16.3 trillion (Telegraph)

Ukraine and Latvia have warned that Western Europe faces financial disaster unless it unites to help stricken countries in the former Soviet bloc.

Government officials from the two countries, which are at risk of bankruptcy as a result of the global financial crisis, told the Daily Telegraph that the European Union’s biggest powers were in danger of repeating the worst mistakes of the 1930s depression by retreating into isolationism and protectionism.

Grigory Nemyria, Ukraine’s deputy prime minister, said that the EU had to overcome bitter internal differences over how to deal with the economic crisis in eastern Europe when world leaders met next month at the G20 summit in England.

“The EU should not just be helping Ukraine because Ukraine is helpless,” Mr Nemyria said. “It should be doing so because it is in the EU’s self-interest.

“There is a high exposure in the [Western European] banking sector to Ukraine, Latvia etc that can only be addressed by acting in concert. The cost of inaction will be far greater than the cost of action.”

Read moreUkraine and Lativia warn of financial disaster in the West if they are not helped

Britain has the world’s biggest fall in property prices after only Latvia

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Britain saw some of the steepest house price falls in the world last year, collapsing by 14.7 per cent, with only Latvia performing worse, research showed yesterday.

More than three-quarters of the 42 countries surveyed recorded falls in the value of property in the final quarter of 2008, compared with just 27 per cent in 2007.

Dubai was the strongest performer, with house prices soaring by nearly 60 per cent in 2008, but much of this gain is expected to be wiped out this year.

Related article: House prices fall, leading to a record annual rate of decline, Halifax reveals (Telegraph)

Latvia saw the steepest slides on an annual and quarterly basis, with prices dropping by 16 per cent in the final quarter of the year and by 33.5 per cent during the whole of 2008.

Iceland also suffered badly, with prices falling by 14 per cent during the year. The US and Ireland were also near the top of the losers’ table with annual price drops of 12.1 per cent and 9.1 per cent respectively.

Read moreBritain has the world’s biggest fall in property prices after only Latvia

Latvian government falls

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The Latvian parliament: The president will seek a fresh governing coalition (Photo: Latvian parliament)

The Latvian prime minister and his government have resigned amid growing political and economic strife in the Baltic country.

Prime Minister Ivars Godmanis submitted his resignation to the president, Valdis Zatlers, on Friday (20 February) afternoon after the two largest parties in the ruling four-party coalition demanded he step down.

Read moreLatvian government falls

World Agenda: riots in Iceland, Latvia and Bulgaria are a sign of things to come

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Our third global political column explores the start of an age of rebellion over the financial crisis – beginning in Iceland


Icelanders vented their fury at the political class’s handling of the financial crisis by staging angry protests in Reykjavik (Halldor Kolbeins/AFP/Getty Images)

Icelanders all but stormed their Parliament last night. It was the first session of the chamber after what might appear to be an unusually long Christmas break.

Ordinary islanders were determined to vent their fury at the way that the political class had allowed the country to slip towards bankruptcy. The building was splattered with paint and yoghurt, the crowd yelled and banged pans, fired rockets at the windows and lit a bonfire in front of the main door. Riot police moved in.

Related article: Icelanders held over angry demo (BBC News)

Now in the grand sweep of the current crisis, a riot on a piece of volcanic rock in the north Atlantic may not seem to add up to much. But it is a sign of things to come: a new age of rebellion.

The financial meltdown has become part of the real economy and is now beginning to shape real politics. More and more citizens on the edge of the global crisis are taking to the streets. Bulgaria has been gripped this month by its worst riots since 1997 when street power helped to topple a Socialist government. Now Socialists are at the helm again and are having to fend off popular protests about government incompetence and corruption.

In Latvia – where growth has been in double-digit figures for years – anger is bubbling over at official mismanagement. GDP is expected to contract by 5 per cent this year; salaries will be cut; unemployment will rise. Last week, in a country where demonstrators usually just sing and then go home, 10,000 people besieged parliament.

Iceland, Bulgaria, Latvia: these are not natural protest cultures. Something is going amiss.

The LSE economist Robert Wade – addressing a protest meeting in Reykjavik’s cinema – recently warned that the world was approaching a new tipping point. Starting from March-May 2009, we can expect large-scale civil unrest, he said. “It will be caused by the rise of general awareness throughout Europe, America and Asia that hundreds of millions of people in rich and poor countries are experiencing rapidly falling consumption standards; that the crisis is getting worse not better; and that it has escaped the control of public authorities, national and international.”

Read moreWorld Agenda: riots in Iceland, Latvia and Bulgaria are a sign of things to come

Baltic Riots Spread to Lithuania in the Face of Deteriorating Economic Conditions

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Riot police officers, in front of Lithuania’s Parliament building, confronted about 7,000 demonstrators in Vilnius on Friday. Ints Kalnins/Reuters

MOSCOW – Riots broke out once again in the Baltic states on Friday, this time in the Lithuanian capital, Vilnius, where a group of 7,000 gathered to protest planned economic austerity measures. A smaller group began throwing eggs and stones through the windows of government buildings until the police moved in, using tear gas and rubber bullets to disperse the crowd.

The episode was nearly identical to one on Tuesday in Latvia, when a peaceful protest of 10,000 people erupted into violence. And on Wednesday, a gathering of 2,000 in Sofia, the Bulgarian capital, began throwing stones and snowballs at the Parliament building, calling for the nation’s leaders to resign.

In all three countries, years of steady economic growth have come to a jarring halt, and citizens are facing layoffs and cuts in wages. In each case, the authorities were left wondering whether they were facing organized activism or just the anger of people whose expectations have been disappointed. “I think this is just the beginning,” said Anders Aslund, a senior fellow at the Peterson Institute for International Economics in Washington. “We should expect this to happen in many places.”

Related articles:
– Latvia Is Shaken by Riots Over Its Weak Economy (New York Times)
– Recession sparks riots in Sofia and Riga (Irish Times)
– Protests spread in Europe amid economic crisis (Los Angeles Times)

Like its neighbor, Latvia, Lithuania has enjoyed a reputation as a “Baltic Tiger,” buoyed by foreign investment, a housing boom and annual growth rates of around 8 percent. Although Lithuania is not facing as dire an outlook as Latvia, economists predict a 5 percent drop in gross domestic product there next year, and the newly elected Parliament has announced tough austerity measures: workers in the public sector will see pay cuts of up to 15 percent, pensions will fall and an array of taxes will rise.

Read moreBaltic Riots Spread to Lithuania in the Face of Deteriorating Economic Conditions