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Vol 2, No 21
29 May 2000
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Latvian News Review News from Latvia
All the important news
since 20 May 2000

Mel Huang

Political and Foreign Affairs

Rīga hosted the annual European Bank for Reconstruction and Development (EBRD) ministerial meeting, marking the largest gathering of international dignitaries in the Baltics ever. Among the attending dignitaries was Luxembourg Prime Minister Jean-Claude Juncker, who also held bilateral meetings with various Latvian officials. Some protestors did picket outside the event locale against anything from nuclear power to globalisation, but thank goodness there was no anarchist violence like that which occurred at other recent multinational meetings.

President Vaira Vīķe-Freiberga made a working trip to France, which is seen as a start to bridging the two countries, as the Latvian President is a Francophile. President Vīķe-Freiberga discussed the promotion of bilateral ties with her counterpart, Jacques Chirac, and met with parliamentarians to discuss EU enlargement. Vīķe-Freiberga also met with business leaders to promote investments in Latvia by French companies.

A conference on EU enlargement and the Baltics was also held during the visit of President Vīķe-Freiberga. The conference was hosted by French European Affairs Minister Pierre Moscovici and was attended by ministers from Estonia, Finland, Lithuania and Sweden as well.

This comes after President Vīķe-Freiberga made a trip to Canada and the United States the previous week, to meet with US, UN and Canadian officials to discuss bilateral issues. The president also met with leaders of Jewish organisations, financiers and businessmen.

Icelandic Prime Minister Davíð Oddsson made a visit to Rīga to discuss bilateral ties. During his trip, Oddsson reminded Latvia to keep working towards NATO membership.

More problems have arisen with Latvia's diplomatic mission in Russia, after a suspected torching of a Moscow embassy official. Various Latvian diplomatic properties in Russia have been defaced and vandalised in the past few months, which has been linked by the press to Latvia's war crimes prosecution of Vasili Kononov.

Speaking of that case, Kononov has submitted a request to renounce his Latvian citizenship. This comes weeks after he was granted Russian citizenship, ironically, on the same day an appeals court freed him, due to legal questions put to the prosecution on the validity of the charges.

Head prosecutors from countries of the Baltic Sea region met in Copenhagen to discuss cases relating to war crimes, genocide and crimes against humanity. The meeting was initiated by new Latvian Prosecutor General Jānis Maizītis, who was confirmed by the Saeima earlier this month.

Vilnius hosted a conference for the nine NATO-aspirant countries, which together called on the Alliance to remain committed to eastern enlargement. NATO Secretary General Lord Robertson also attended the conference, while politicians of all walks from the US saluted the declaration. Both presidential candidates, Democrat Al Gore and Republican George W Bush, praised the move and powerful Senate Foreign Affairs Committee Chairman Jesse Helms also threw his considerable weight behind the group's aspirations. The group of nine foreign ministers (Albania and Macedonia were represented by deputies) called on NATO enlargement to occur again in 2002. Officials from NATO and member states also praised the so-called "Vilnius statement" from the meeting of the North Atlantic Council in Firenze (Florence) during the week.

The European Union provisionally closed the five "easy" chapters of negotiations with Latvia.

Economics and business

A surprising twist in the energy sector occurred, when Estonia's power utility Eesti Energia and Latvia's power company, Latvenergo, signed a protocol of intent on co-operation, which could lead to the merger of the companies. This would have grave implications for the privatisation of the companies, ongoing negotiations in Estonia for selling two power plants and the creation of the joint Baltic energy market. Regulators complained about the deal, but it has been endorsed by officials in both countries. A letter of intent was signed in Tartu by Economics Ministers Mihkel Pärnoja of Estonia and Aigars Kalvītis of Latvia.

French company Rhodia won the right to purchase the moribund Tolaram Fibres plant in the eastern town of Daugavpils at auction for USD 9.5 million. The company will officially take over on 1 July and will employ about 200 people.

Latvia and Russia began negotiations over trade, which has direct implications for Russia's bid to join the WTO. Latvia, a WTO member, wants Russia to remove discriminatory policies and can use its WTO membership as a strong negotiating lever.

Germany's Norddeutsche Landesbank signed a deal to become the strategic investor of Pirmā Latvijas Komercbanka by taking a 90 per cent stake in the revitalised bank.

Trade grew in Q1, as the economic recovery continues. Exports in Q1 grew by 11.8 per cent and imports by 10.8 per cent, compared to Q1 1999.

However, the CPI grew by 3.8 per cent, in Q1 of 2000. Public sector wages rose by 8.2 per cent in that period, which may fuel inflation into Q2.

The three Baltic stock exchanges launched their joint website this past week at www.baltic-exchanges.com. The three bourses are also in talks to join the pan-Nordic NOREX exchange.

Social and local interest

The two largest mobile phone service providers say that 12.8 per cent of Latvians use mobile phones.

And in other news...

Latvia's entry in the Eurovision song contest, "My Star" by Brain Storm, took a surprising third place, in the country's first time in the pan-European event. They even managed to get the gig to open for the Pet Shop Boys in Tallinn in early June, as they have gained lots of fans among their northern neighbours.

Latvia's national hockey team lost to the Czech Republic, who went on to win the championship, in the quarterfinals of the World Ice Hockey Championships 1:3. Latvia finished eighth overall.

Some 11 postal workers were overcome by unknown noxious fumes, and some were taken to hospital.

Exchange rates
As of 29 May 2000

currency Latvian lats (LVL)
1 US dollar 0.61
1 British pound 0.89
1 German mark 0.28
1 euro 0.55

[For continuous updates see the Bank of Latvia Exchange Rates page].

Mel Huang, 29 May 2000

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