Summed up

LATVIAN BUDGET DEFICIT HITS 27.3 MILLION LATS: The financial deficit of the Latvian basic budget reached 27.3 million lats ($46.3 million) on July 1, with the fiscal deficit standing at 62 million lats, Finance Ministry spokeswoman Baiba Melnace said. On June 30 the financial deficit was 15 million lats and the fiscal deficit was 47.5 million lats. The reason for the jump is that at the beginning of the month revenue funds have not yet flowed into the budget, but wages have been paid out.

RIGA CITY COUNCIL READIES FINGER FOR DIKE: The Riga City Council will prepare a plan to eliminate deficiencies in money management identified by state auditors but has not set a target date for the plan. The city council said July 1 that the Assets Department will examine the auditors' opinion. A regular audit had revealed that over seven years the Riga City Council had invested 70.3 million lats ($119.15 million) in various business companies. Most of these investments were failures, the Bizness & Baltija newspaper reported. The state auditor said that investments totaling 62,000 lats were impossible to recover. The Riga City Council had invested 9.6 million lats in companies which are not directly related to the functions of the municipality.

TRUCKERS AND GROWERS TALKING STRIKE: Latvian truck transporters and farmers are threatening to begin strikes and other protests on July 12 if the government fails to meet their demands for simplified visas for drivers from Russia and CIS, market protection and help in getting more cargo permits from Russia, Poland and other countries. Farmers demand that at least 4 percent of the national budget should be allocated for agriculture subsidies and the amount of subsidies be raised to the European level of at least 1.27 percent of the gross domestic product by 2005. Keiss said such radical steps are necessary because the truckers have not been able to get the government to meet their demands. "We have been turning to various institutions for four years with no result, and we will go on strike if these demands are not met by July 12," said Keiss.

ESTONIA'S CORPORATE TAX CUT BOGS DOWN: The Estonian government's promise to free companies of corporate income tax as of next year may be fulfilled later than planned, due to a likely budget gap. The bill, already introduced into parliamentary proceedings, calls for abolition of corporate income tax in the year 2000, but application of the bill is still questionable, Finance Minister Siim Kallas told the Baltic News Service. It is a tough job to swallow the 1.4 billion kroon ($93.6 million) gap, Kallas said.

ESTONIAN FUELERS HIKE GAS PRICES: Major Estonian fuel sellers raised the price of gasoline on July 1 by an average of 0.20 kroons a liter, reflecting the steep rise in gasoline prices on the world market and the continued high exchange rate of the dollar. Statoil triggered the price rise followed by Neste and Shell companies. The new cost of 95E gasoline is 7.50 kroons ($0.50) and 98K gasoline is 7.70 kroons a liter at Statoil, Neste and Shell service stations. There was no increase in the price of diesel.

BEER DEAL UNCAPS MILLIONAIRES: The sale of Svyturys to Denmark's Carlsberg has turned 50 employees of the Lithuanian brewery into millionaires, the daily Respublika reported on May 30. Every sixth person working at Svyturys, from management and rank-and-file, is now a millionaire. According to the daily, people who had been paid the lowest wages in the Lithuanian beer industry for years became rich in an instant as they used to get part of their pay in shares. The workers have already invested their money in apartments, houses and land.

SMALL COMPANIES YIELD GOOD NEWS: The Lithuanian economic growth in the past five years has been based on development of small companies, according to a USAID study released May 29. In 1995 to 1997, small companies, without major investments, grew at an average rate of 203 percent, while the growth of large companies with large investments was a negative 5 percent. Investment use, not size, is more important, said analyst Margarita Starkeviciute, releasing the study. Two-thirds of Lithuania's economic growth came from construction and trading development with energy and transport retarding overall growth.

LITHUANIA MAY REDUCE DAIRY SUBSIDIES: Getting all of Lithuanian farmers' milk purchased may mean a return to subsidizing fewer dairy products, Lithuanian Prime Minister Rolandas Paksas said on June 30. Subsidized products would be only four: fermented cheese and fresh, powdered and canned milk. The agriculture ministry has proposed to keep the base price of second-grade milk at 470 litas ($117.50) per ton and to raise first-grade milk to 490 litas per ton.