Latvian development through the eyes of cartoonist - April 2010

While Latvia prepares for the ''hot'' summer electioneering campaign prior autumn elections the mood is country is sombre or some might say even desperate. Noticed today that some smart folks in Russia used my previous blog entries for depicting the mood in Latvia with the help of cartoons. Another commentator quite revealingly concluded that there is enough said about Latvia these days. I cannot agree more... and here you have again a chosen set of fantastically revealing cartoons of Gatis Sluka.

P.S. Because my last entry I finished with the cartoon depicting the theme of roadworks decided to start this set with the same topic. Why? Because while in neighboring Baltic countries the EU funds were used to upgrade their road network Latvian former transport supremo and transport ministers before him were negligent enough, and allowed the Latvian road system to turn into permanent state of disrepair...



[Driving school] And now the toughest task ahead - getting around the potholes!



OPTIMIZATION
1. [Red house] Vocational school for road workers and next to it [greyish house]Technical school
2. [greyish house] ''Pothole fixer'' evening school



Please be so kind - I need something for sclerosis!



CRISIS STAGE





Yiddish Proverb: Don't spit into the well - you might drink from it later...AND Latvian Proverb: Do not cut the tree branch you are sitting on...
[Passer by] It seems that he can do both things at the same time!



Unemployed and destitute folks in front of the Latvian Cabinet November 2009 [GIVE US WORK!]-[Policeman] According to the City of Riga regulations you are not allowed to pitch tents in green area, and you must get rid of them!
LATER GIVE US WORK!



TRANSIT thru Latvia...



And what about me as the youngest son, what would I get? DEBTS!



CASH WITHDRAWAL/DOWN PAYMENT Man with the hat - devaluation of the lat? Other man - illegal payments?



PAREX BANK [Excuse us, but this play shall be staged behind closed curtains!]



HOSPITAL [If you were able to crawl here on your own then do not waste our time!]



[Latvian Economy] or better use ominous term Latvionomics (first designed by Morten Hansen)



[Tax-Ax in ''flesh'' of an economy] But my shadow shall stay forewer!



What are you doing? Social cushion was designed for different purpose [Dombrovskis government prepared in 2009 so called social cushion to alleviate hordes of unemployed]



[Books] How to stay an optimist? How to find a job? Be successful!



1966 - what is going to hapen with you? Astronaut!
2006 - who do you want to become to? A banker!
2010 - interesting, what is going to be your future profession? Debt collector!



[Work] You first! No, you first! Story about the extention of the unemployment benefits...

Bank failure in Latvia - start of the downward spiral (updated)

Photo: Delfi

There were three news coming from the Latvian cabinet on the Brivibas St. that would have sounded like a bomb in other times. In the situation when international financial markets are in disarray, TRUST is lost in the credit institutions, the news from Latvia do not surprise anymore. Decision makers around the world are busy with bigger banks and more influential economies. Also the Latvian public is used to so many scams and scandals involving different grades of civil servants and government officials, thus the latest news do not surprise anyone anymore.

First, news came about the government nationalizing the second largest bank in Latvia, the Parex Bank. Apparently several savers (officially there are around 500 000 of them) have withdrawn their savings amounting hundreds of millions of dollars. Earlier the Bank of Latvia and Chief Financial Regulator announced that Parex would have had problems of rolling over the syndicated loan in early 2009 due to strained foreign currency markets. Also the Governor of the Bank of Latvia announced that no other bank in Latvia faces such problems as Parex. Thus, the Latvian state took over the majority assets (51%) from the owners of the failed Parex paying for it symbolic Ls2, and merging it with the Latvian Mortgage Bank. In addition Db reports that the Latvian Mortgage bank had invested Ls 1,899 mlj into Lehman Brothers stocks, but that money is evaporated now.

The text in Latvian: 2006 - we have the cheapest credits in town! Here, take our money! 2008 - the highest interest rates! You have our money, thus bring it back!

Cartoon: Gatis Šļūka

Second, Latvian Minister of Economics announced that Latvian government would have to ask help from the International Monetary Fund (IMF). Kaspars Gerhards (TB/LNNK) specified that its only the question of time when government would have to act. Earlier the Head of Saeima Budget Committee Kārlis Leiškalns (TP) announced that government must balance next year fiscal budget, because otherwise the government would have to beg from IMF, and that is the least likely prospect of the present governing coalition.


Finally, the government "miraculously", just in a span of a week, found additional 320 mlj. euros to spend less in next year's budget. It means that prior the budget's second reading in the parliament government proposes now to cut the fiscal deficit from 1,87% to 1,5%.

It seems that the persistent warnings of Mr Rimšēvics have paid off, and the cabinet members have understood that problems of international financial markets would simply be amplified in Latvia due to its overblown administrative apparatus and unreformed fiscal system. The PM has started to cut the red tape already although the results are rather timid so far. Nobody has started reforming the fiscal system, and I believe that the present coalition government is incapable to perform such task, thus new government must come instead.

Updated

"Dienas Bizness (Db)" just reported that transport supremo was apparently using insider information and withdrew all his savings from the failed Parex Bank. As I wrote earlier Parex Bank was nationalized this Saturday night through merging it with the state owned Latvian Mortgage Bank. According to Db Transport supremo denies all the allegations, however, it is long known that PM is his party mate, and that the government discussed behind closed doors possible state guaranties to fledgling banks. Interesting, interesting, and if this information would not trigger the fall of the fragile coalition then what would?

The PM must work like a firefighter and deal with such heroic responsibilities as to putting off the flames to the scandal of yesterday. The task is truly challenging and neither Ivars Godmanis has learned to delegate his powers, nor he has trusted government to help him in his ordeal. His Minister of Finance resides in dreamworld, and in those times of dire straits it is too much of a waste of such an asset as the proper advice from the ministry of finance... .

The Latvian Minister of Finance Slakteris and the Prime Minister Godmanis at the press conference...


Photo: Aivars Liepiņš