Summed up

May 11, 2000

TWO BANKS JOIN FORCES: Latvia's Hansabanka and Ventspils ABB have merged. Ventspils ABB will now become Ventspils ABB Hansabanka. The Estonian and Latvian central banks have been given the responsibility to finalize the deal. Hansabanka has taken all responsibility for liabilities and rights from Ventspils ABB. Hansabanka's share holders all voted unanimously for the merger.

PAREX RECEIVES $23 MILLION LOAN: An international banking syndicate has agreed to grant Parex Banka in Latvia a $23 million loan to be repaid over a period of 1-2 years. The rate of interest of the loan is 1.25 percent over LIBOR. The syndicate members, representing seven countries, arranged the loan so Parex can access Western and Central European capital markets.

THE BALTICS JOIN NOREX: Riga's Stock Exchange, Tallinn's Stock Exchange and Lithuania's National Stock Exchange have all become partners with the Nordic Stock Exchange NOREX. The Baltic exchanges see this protocol agreement as an important step to reaching European standards. All four stock exchanges said this agreement will make it easier for all parties involved to invest in one another's markets. The next step is the introduction of a combined bond market.

STEADY RESULTS FOR VENTSPILS NAFTA: Latvia's VN released its quarterly report figures with turnover figures of $23,559,322 and a net profit of $10,847,457. Chairman of VN, Mamerts Vaivads, said the figures correspond to projections of the company's management and modernization and tariff policies undertaken by VN have stabilized the company. The company's profits are in line with last years' figures.

HOPS IN, BEER OUT: Lithuanian beer producers exported 14,000 decaliters (dal) of beer over the first four months of 2000, up from 12,000 dal exported in the same period in 1999, the Lithuanian Brewers' Association reported. Some 13,000 dal of the January-April volume were exported by the Siauliai-based brewery Gubernija, Vladas Miksys, the association's financial chief said. Lithuanian beer exports have shown a sharp decline in recent years: from 162,000 dal in 1998 to 53,000 dal in 1999. Gubernija sold 45,000 dal of beer in foreign markets and ranked first among Lithuanian beer exporters last year. The company is set to boost exports to 12 percent of production thanks to new contracts with Israel. Gubernija currently exports around 7 percent of production. Germany, Latvia and Russia's Kaliningrad region are the main destinations.

HOUSING HEADS LET GO: The Riga City Council board decided unanimously May 5 to suspend from work the heads of the Riga Municipal Housing Privatization Commission, until an audit of the commission's operations is completed. Dismissed were the commission head Janis Rupkus, chief accountant Iveta Aditaja and the commission member Janis Rugelis, who are all away on a business trip to Tunisia that was not approved by the Council. The Council board members Juris Mikelsons and Heinrihs Lacis doubted the feasibility of dismissing these officials and believing that commission deputy head Dags Auzuleja can continue work and provide all necessary explanations to auditors while the commission leaders are away.

LOWER TAXES? The new Latvian government is set to lower several taxes and improve their collection. According to the government declaration, the reduced tax rate will be applied to income derived from the rights to use technology. The government intends to continue reducing social insurance contributions and real estate tax and supports coordination of excise and value-added tax rates with other Baltic states. There are also plans to reduce the amount of overdue social insurance contributions by lowering the rate through an increased number of payers. The new Latvian government also intends to establish a special body which will settle tax disputes as well as to create a united tax administration information system and mechanism for control of personal income tax payments.

BALTICS' GDP THIRD OF EU'S: The Baltic states' per capita gross domestic product is among the lowest in Central and East European countries, reaching barely one third of the European Union average, the EU's statistical office said in a report on candidate countries' regions.Estonia is the leader among the Baltics with per capita GDP in 1995-1997 amounting to 34 percent of the EU average.The least well-to-do of the region's countries was Latvia whose GDP made up only 25 percent of the EU average. Lithuania's GDP per head of population for the period under review was 29 percent of the EU average.

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