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Latvian President believes country’s financial system is stable

Photo: president.lv.
«Latvia’s financial system is stable, and there is no reason to worry about possible instability of the banking system. Banks continue working as usual,» says the President of Latvia Raimonds Vējonis.

The investigation about the situation with Latvia’s financial sector must not be allowed to be influenced and should be concluded as soon as possible, said Vējonis after his meeting with Prime Minister Māris Kučinskis on Wednesday, 21 February.

«I can say that law enforcement institutions should continue working to disprove information reported about certain officials. This investigation must not be influenced and should be concluded as soon as possible, because this matter is associated with state and financial system’s reputation. Because of that, answers should come as quickly as possible.»

The president adds that law enforcement institutions should work to accomplish results and fix the problems that exist in the financial sector.

Commenting on Latvian Defence Ministry’s report, in which officials mention that the situation revolving around the arrest of the governor of the Bank of Latvia Ilmārs Rimšēvičs is being used as an attack against Latvia’s reputation, Vējonis said that Latvia exists in a state of constant hybrid war.

«We see different information campaigns being performed against Latvia on a regular basis. Their goal is misreporting different facts in an attempt to defame officials and cause sow seeds of hatred among different nationalities,» said the president, adding that the situation is already heated and a large volume of misinformation is reported almost every day.

At the same time, he proposed maintaining a cold state of mind, adding that available information is considerable and controversial. This is why special services should be allowed to work to sort the truth from lies.

Kučinskis believes that the information campaign organized in foreign countries about Latvia is continuation of the attack.

The prime minister says it was necessary to demonstrate «how it was technically possible for information ruinous for Latvia’s reputation to circle around the world». He added that it is also important to see how information is interpreted in Latvia.

«This information from Defence Ministry goes in context with what the largest shareholder of Norvik Bank Grigorijs Guselnikov has said. Neither I nor security institutions are informed of the whole picture. Information reported in the public space came from a robot. It was circulated around the world within minutes. Now it has returned to Latvia. This does not mean there is any reason to consider any threats to the state or involvement of some third country. There is reason believe someone has used resources not unlike the ones that had been used in the past,» Kučinskis said.

On 20 February, Latvia’s Defence Ministry reported information that suggested that a massive information campaign is being realized against Latvia. Considering events of the last several days in the country’s banking sector and the arrest of the governor of the Bank of Latvia – Ilmārs Rimšēvičs – it is entirely possible that someone is currently realizing a massive information operation. Its structure and execution is not unlike the one observed in USA, France and Germany during the pre-election period.

It should be said that Latvia’s Defence Minister Raimonds Bergmanis is currently away in South Korea. Nevertheless, the prime minister says the ministry is able to act and respond on its own.

When asked about Rimšēvičs’ possible dismissal, both the president and prime minister mentioned that it would be best for the country’s financial sector if the governor of the Bank of Latvia stepped down on his own.

During his press conference on Tuesday, 20 February, Rimšēvičs expressed no such desire. «This situation is incredibly complicated. This situation is quite possibly the most complicated one I have ever been in. I feel a great deal of support from people I don’t know, as well as my friends and family members. I have decided to not back down – I am innocent. The the people attacking my reputation have only one goal in mind – to have me step down,» he said.

Kučinskis plans to inform his European colleagues in the European Council about the situation in Latvia on Friday, 23 February.

He also notes that Rimšēvičs by the Corruption Prevention and Combating Bureau (CPCB) and the situation with ABLV Bank should be kept separate. The prime minister added that putting those two cases together would not benefit Latvia at all.

Kučinskis emphasized that it is necessary to demonstrate to international community that the two cases are separate and not related to one another. The official added that on 23 February he will be taking part in a meeting of the European Council. There he plans to explain the situation to his colleagues and hold several interviews. «It is highly important to emphasize that there are no threats to Latvia’s financial system or economy,» added Kučinskis.

Several political parties have already expressed concerns about Latvian prime minister’s inability to resolve problems in the financial sector. Harmony party’s leader Jānis Urbanovičs says if Kučinskis is unable to perform his duties, he should step down.

Commenting on Urbanovičs’ statements, Kučinskis explained that the opposition will demand ministers and the prime minister to step down before elections.

«This is the time when we have to stick together and be strong. I have no intention of doing that any differently just because Urbanovičs said something. We said this at the very beginning – our plans include sorting out the insolvency process and combating grey economy and corruption in the country. I never once thought to myself that it would be easy. It is not a question of a single day,» said Kučinskis.

Kučinskis is not the only one criticized by other parties. Latvia’s Finance Minister Dana Reizniece-Ozola’s behaviour has been criticized by multiple political parties. «Latvia’s Finance Minister Dana Reizniece-Ozola has failed to prevent the decision made by United States Department of the Treasury, which is ruinous for the country’s financial sector and humiliating for its reputation,» says chairman of New Conservative Party Jānis Bordāns.

Progressive party believes politicians’ reaction to Rimšēvičs’ arrest causes concerns about the division of official power.

«Suspicions are caused by the ruling politicians’ words about requests for Rimšēvičs to step down. Finance Minister Dana Reizniece-Ozola’s request for Rimšēvičs to step down coincides with Saeima speaker Ināra Mūrniece and Prime Minister Māris Kučinskis’ opinions. This request was voiced before law enforcement institutions had reported information about the situation,» the party noted.

This raises concerns about division of power, because in previous situations there was «an attempt to hide behind presumption of innocence», saying that a person accused of serious crimes can be allowed to continue performing their duties until the ruling has come into force, the party stated.

Progressive party’s board member and economic work group manager Mārtiņš Kossovičs says: «What we see in the management of Latvia’s financial system has been critical for a long time. Unfortunately, supervisory institutions have served narrow capital or bank interests, not the majority of society. The current situation reminds a rehearsed performance by the elite and brutal division of influence. Until now not a single other official has been sacrificed so easily.»

The leader of Harmony Jānis Urbanovičs believes Kučinskis is incapable of dealing with his duties in relation to problems with the financial sector and other fields. Because of that, Urbanovičs says the prime minister should step down.

Chairman of For Latvia’s Development party Juris Pūce is concerned about Reizniece-Ozola’s habit of saying different things in every interview. «What we have seen in recent days, Latvia’s financial sector has been impacted by several heavy shocks, which came as a result of the government’s uncoordinated and chaotic behaviour. The prime minister ’has disappeared’ and cannot possibly offer a clear plan to resolve the crisis. The finance minister, on the other hand, says something else in every interview. Such behaviour does not help resolve complicated situations. It also risks drowning Latvia’s financial sector in an even deeper crisis,» says Pūce.

Pūce explains that clear government communication and efforts are needed to restore trust in Latvia’s financial sector and supervisory institutions.

The governor of the Bank of Latvia Ilmārs Rimšēvičs has been applied with a prohibition to take post, said Latvian Prime Minister Māris Kučinskis after a meeting of the Cabinet of Ministers.

It should be added that Rimšēvičs is being held suspect of demanding and receiving bribes worth at least EUR 100,000.

Kučinskis says the government listened on Monday, 19 February, to the report from the Corruption Prevention and Combating Bureau on Rimšēvičs’ arrest. More detailed information on this matter will be provided by CPCB representatives.

«A security measure was applied to the governor of the Bank of Latvia on 19 February. The least we can expect is a prohibition from performing his duties,» said the prime minister.

He confirmed that the criminal process launched by CPCB is associated with Rimšēvičs’ arrest, not ABLV Bank or any other financial institution. At the same time, he mentioned that CPCB has commenced «decisive and direct efforts to combat machinations in the country’s financial sector».

Chief of CPCB Jēkabs Straume mentioned that there are two individuals involved in the criminal process – a high-ranking official of the Bank of Latvia and some other individual. The bribe in question is worth at least EUR 100,000.


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