Latvia: Left bloc wins huge vote amid austerity

[Albion]

So the Banks in USA and around the world went bankrupt in 2008 because of Russian money as well? Or Cyprus problems more recently, was it because Greek haircut deal ensured that Cyprus banks didnt get all of their money of Greek gov. bonds and vent insolvent or was it the Russian depositors, that magically made the banks fail, also insuring major losses on themselfs? I can assure you, I have no big love for Russian involvment in Latvian affairs but it had nothing to do with economic crisis at all. Our own gov. made the real estate bubble, they ensured there is no tax on real estate deals, basically people bought up property just to later sell it off for a higher price, this is a piramid scheme 101, it was not sustainable and was mostly fueled by Scandinavian banks (with Scandinavian money) not Russians, you know the same big players as in Estonia - Swedbank, DNB, Nordea. Parex was just one of many, it was a local bank so it fell on us to save it, which was wrong if you ask me. Im sorry, I just fail to see where Russian money comes into all of this? Can you give me a chain of events please and enlighten me, because so far you sound like some of our blame shifting cockroach politicians who made the crisis possible with the credit boom.

Ireland also had that problem. Britain does too, but the supply of houses is kept short by restrictive planning and high immigration meaning the bubble won't burst for a few years yet. This situation was deliberately created by our last (Labour) government. First time buyers are priced out whilst older folks make a killing and don't give a fuck about future generations because they won't be alive when the country goes to shit - that last partis basically what some older people have told me.

[Graham]

Lefty source: - See more at: http://www.greenleft.org.au/node/542....Lw7lZvYj.dpuf

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The coalition belongs to the all-European Union (EU) political bloc European United Left-Nordic Green Left, which includes the major communist-leaning coalitions and parties, such as Greece's Syriza, Germany's Die Linke, France's Left Front, Spain's United Left and Ireland's Sinn Fein, among others.

It's interesting to look at these groups & alliances that form in the EU . It describes itself as :--
https://en.wikipedia.org/wiki/Europe...dic_Green_Left

Ideology

Democratic socialism, Ecosocialism, Anticapitalism and Eurocommunism

Position

According to its 1994 constituent declaration, the group is opposed to the present European political structure, but committed to integration.That declaration sets out three aims for the construction of another Europe: the total change of institutions to make them "fully democratic"; and breaking with "neo-liberal monetarist policies"; and a policy of co-development and equitable cooperation. The group wants to disband NATO and "strengthen the OSCE".

The group is ambiguous between reformism and revolution, leaving it up to each party to decide on the manner they deem best suited to achieve these aims. As such, it has simultaneously positioned itself as "insiders" within the European institutions, enabling it to influence the decisions made by co-decision, and as "outsiders" by its willingness to seek "another Union" which would abolish the Maastricht Treaty.

[Pure ja]

So the Banks in USA and around the world went bankrupt in 2008 because of Russian money as well?

Nope. How so?
You should compare Latvia to Estonia instead.
Estonian banks did not go belly up in the 2008 crisis. Why? Because of marginally better banking regulations and oversight.

Or Cyprus problems more recently, was it because Greek haircut deal ensured that Cyprus banks didnt get all of their money of Greek gov. bonds and vent insolvent or was it the Russian depositors, that magically made the banks fail, also insuring major losses on themselfs?

Cyprus made the mistake of being dependent on both Greece and Russia - a very bad combo.

I can assure you, I have no big love for Russian involvment in Latvian affairs but it had nothing to do with economic crisis at all. Our own gov. made the real estate bubble, they ensured there is no tax on real estate deals, basically people bought up property just to later sell it off for a higher price, this is a piramid scheme 101, it was not sustainable and was mostly fueled by Scandinavian banks (with Scandinavian money) not Russians, you know the same big players as in Estonia - Swedbank, DNB, Nordea. Parex was just one of many, it was a local bank so it fell on us to save it, which was wrong if you ask me.

Part of the bubble was the "scandinavian" loan money.
The other part was the Russian money. You can't deny the influence of Russian money in Latvia. Even if it lurks behind the backs of latvian nationals.

Im sorry, I just fail to see where Russian money comes into all of this? Can you give me a chain of events please and enlighten me, because so far you sound like some of our blame shifting cockroach politicians who made the crisis possible with the credit boom.

I took a long midsummer break, while shifting through old newspapers (Postimees mostly).
All I can come up with is this (in estonian language):

http://www.postimees.ee/48055/kas-mo...-pankade-katte

I am unable to unearth the article about pulling out Russian money right before the crash. You should be able to recall such articles by yourself.

Just by googleing: Läti Vene raha
brings up a huge heap of results (in estonian, again).

My suspicions rise immediately concerning any "latvian" who denies the influence of Russian money in the Baltics. Comparisons with cockroaches does not help here, because cockroaches were reintroduced en masse to Estonia in 1939-40 by the soviet colonists.

[Pure ja]

When giving its verdict on eurozone accession EC takes public opinion and latest elections in account, if you read their statements about Latvia, its clear they fallow this up and are well informed about it.

They are well informed and they will continue to ignore it and will accept Latvia to the Eurozone with open arms.

On the other hand, they need some foolish country to demonstrate that Euro is still something states want to have.

There you have it.

We dont have this, EU citizens can vote in municipalities if they live for a certain period but Latvian aliens (nonecitizens) cant.

Don't have what, differing elections results in local and state elections?

[Pure ja]

No, that is not how it works here. Municipalities have their own budget, if they have debt it goes into "central government debt" but usually people are talking about "central government debt" which is also one of Maastricht criteria. The revenue for municipalities comes mostly from taxes, mainly individual income tax, where 80% goes into municipality and 20% to the central gov. During crisis this was actually changed in favor for the central gov. I dont recall what where the numbers before 85% to municipality I think. So basically central gov. was the one which went bankrupt and took money off Riga and other cities. Of course Riga gers subsidies from central gov. but all of those where heavily slashed during crisis. So saying that Riga was living rich because it got the money from central. gov is just ridicilous in this case.

You are messing up what I meant.
You did not state that Riga hadn't taken any new loans. If Riga had taken new loans, then that inevitably affects the "state debt balance" and thus also affects the state budget.

I claimed that Riga didn't get money from the central government, but from thin air, and because of that, central government had to take that additional debt into account while trying to achieve budget balance.

Nothing special goes on, you should come and visit, Riga is fun.

That coming from a centre radical, I have my doubts
But maybe I will.

[Pure ja]

I think treaty like that is a reduction of states sovereignty.

Well, apparently it should be mandatory for Eurozone member states.
EU membership IS a reduction of states sovereignty.

Thats like suggesting to buy a house with cash in hand or start a business without taking a loan. There is no problem with borrowing money if you invest it wisely and in the end it turns in more profit than original loan + interest.

While that sounds beautiful in theory, in practice several questions arise:
1. Why in the end? What is the end? The very end?
2. The scarcity of examples of states who have actually invested loans wisely and profited from it and paid it back with interest. Finland comes to mind. Maybe Germany. And basically that's it. The others have used any derivative of a pyramid scheme. (edit: both Finland and Germany are deep in debt by now)

And btw, a state can always take a loan from its own citizens and later pay it back with interest. Why take it from outside?

Was it a failed state prior to the crisis? I think the EU failed it. Being in eurozone seriously restricted its maneuvering during the crisis.

Yes, it was already a failed state before the crisis, it was just not evident yet.
And yes, Greece would have had it easier being outside of the Eurozone.

I bet there is pretty big shadow economy in Estonia as well. Might be just as big as Greece.

EU stats claim that greeks work longer than estonians. Yeah, sure. Greece statistics.
I very much doubt that Estonian shadow economy is as large as that in Greece.

[Pure ja]

I dont fallow, I understand that Russia is a military backer for Armenia, which prevents any conflict between Armenia and Azarbaijan over Nagorni-Karabah area, but what it has to do with it. Russia clearly has good bilateral relations with both Azarbaijan and Armenia, they both are even part of CIS, Georgia used to be part of CIS too. I can give some other examples, Belarus, Kazahstan and so on.

Russia uses the "divide and rule" principle in CIS.
Armenia has Azerbaijan. Georgia has South-Ossetia and Abkhazia.
Russia is not part of the solution, Russia is part of the problem.

I recall late 90's and early 2000 as much better period than 2004 onwards with EU crap.

That is because of the easy border crossings within the EU. Schengen Area, etc.

[Citizen]

Nope. How so?
You should compare Latvia to Estonia instead.
Estonian banks did not go belly up in the 2008 crisis. Why? Because of marginally better banking regulations and oversight.

Eesti didn't had big local banks. Scandinavian banks suffered and had to be helped by their parent banks same as here. Parex didn't had this option so it went bust.

Cyprus made the mistake of being dependent on both Greece and Russia - a very bad combo.

Only mistake it made was joining euro, same we are about to make as well.

Part of the bubble was the "scandinavian" loan money.
The other part was the Russian money. You can't deny the influence of Russian money in Latvia. Even if it lurks behind the backs of latvian nationals.

What do you mean by influence, of course Russians, same as Scandinavians invest in Baltics. Im not denying that there are no Russian owned bisinesses in Latvia. But they had nothing to do with crisis, crisis came from US, it was not engineered by FSB or something, that is just tinfoil hat thinking.

I took a long midsummer break, while shifting through old newspapers (Postimees mostly).
All I can come up with is this (in estonian language):

http://www.postimees.ee/48055/kas-mo...-pankade-katte

I am unable to unearth the article about pulling out Russian money right before the crash. You should be able to recall such articles by yourself.

Just by googleing: Läti Vene raha
brings up a huge heap of results (in estonian, again).

My suspicions rise immediately concerning any "latvian" who denies the influence of Russian money in the Baltics. Comparisons with cockroaches does not help here, because cockroaches were reintroduced en masse to Estonia in 1939-40 by the soviet colonists.

You know its called a bank run, if I had money during that time in Parex I would take it out too. You would not take out money from a bank if you hear that its about to go bust? Also why Latvian in " "?

They are well informed and they will continue to ignore it and will accept Latvia to the Eurozone with open arms.

There you have it.

Which further proves my point that EU is both undemocratic and is all about defending the interests of big players there, mostly Germany and France.

Don't have what, differing elections results in local and state elections?

No, the aliens (noncitizens) which you also have, I know for sure, have no rights to vote in both municipality and parliament. So the election results are pretty much the same if you look at municipalities elections or parliament, the reason why Harmony Center isnt in power in parliament and gets around 35% usually is that parliament takes accaunt whole Latvia and not just Riga city or Daugavpils.

You are messing up what I meant.
You did not state that Riga hadn't taken any new loans. If Riga had taken new loans, then that inevitably affects the "state debt balance" and thus also affects the state budget.

I claimed that Riga didn't get money from the central government, but from thin air, and because of that, central government had to take that additional debt into account while trying to achieve budget balance.

No Riga gets its money from the cirizens of Riga, trough individual income tax of those who are registered there. 80% of this goes to the city budget and 20% to the central gov. So they both have separate budgets. In 2010 (high point of crisis) Riga had a 4% proficit so it spent less that it earned and took no debt at all. Both budgets are completely separate .

That coming from a centre radical, I have my doubts
But maybe I will.

Gimme a message if you do! Also why would I be a radical?

Well, apparently it should be mandatory for Eurozone member states.
EU membership IS a reduction of states sovereignty.

Which is the reason why we should have stayed out of it.

While that sounds beautiful in theory, in practice several questions arise:
1. Why in the end? What is the end? The very end?
2. The scarcity of examples of states who have actually invested loans wisely and profited from it and paid it back with interest. Finland comes to mind. Maybe Germany. And basically that's it. The others have used any derivative of a pyramid scheme. (edit: both Finland and Germany are deep in debt by now)

60% of GDP is not deep in debt. Japan has a debt of 210% of GDP and it can sustain it while Greece has half of that and is in recession for 6 years now. Greece is now in austerity vicious circle, austerity causes recession which makes it borrow more which Greece can't do and has to do more austerity to pay its citizens and around it goes for 6 years now. It has nothing to do with failed state.

And btw, a state can always take a loan from its own citizens and later pay it back with interest. Why take it from outside?

Can you in Eesti? We couldn't so far, it was introduced this year but the rates they give are low only 0.3% in a year long LR gov. bond, doesn't even cover inflation.
https://www.krajobligacijas.lv/

Yes, it was already a failed state before the crisis, it was just not evident yet.
And yes, Greece would have had it easier being outside of the Eurozone.

Is USA and Japan also failed states, they both have bigger debt to GDP ratios. Also tax avoidance in USA is pretty big as indicated by recent Apple case, where its both the biggest tax payer and avoider in USA.

EU stats claim that greeks work longer than estonians. Yeah, sure. Greece statistics.
I very much doubt that Estonian shadow economy is as large as that in Greece.

Its eurostat. Also talking to some of my Greek friends I realized that out tax avoidance is bigger than in Greece, in Latvia almost everyone buys stuff on company to avoid taxes, almost all cars are bought like that. Also you have no friend how works in the grey sector, earns minimal or no salary officially and gets paid under table? Really no one?

Russia uses the "divide and rule" principle in CIS.
Armenia has Azerbaijan. Georgia has South-Ossetia and Abkhazia.
Russia is not part of the solution, Russia is part of the problem.

Same could be said about EU and Germany/France.

That is because of the easy border crossings within the EU. Schengen Area, etc.

What? I dont fallow.

[RussiaPrussia]

[Pure ja]

Eesti didn't had big local banks. Scandinavian banks suffered and had to be helped by their parent banks same as here. Parex didn't had this option so it went bust.

If Parex was the biggest bank in Latvia, then obviously the local Scandinavian banks (which used to be the brances of Estonian banks before they became scandinavian in Latvia) did NOT have the largest impact in creating the bubble.

And the Scandinavian banks did not suffer considerably. One could say that what they reaped in the Baltics as untaxed profits, they invested in Lehman Brothers. So IF those reserves had still been the reserves of Estonian Hansabank, for example, then perhaps nothing bad would have happened. There was overextending going on during the bubble, with branches in the Ukraine and in St. Petersburg, but overall the reserves produced by local Baltic branches were large enough. The Baltics had been insanely profitable for the Swedish banks before the 2008 crisis, much larger profits than what was lost during the 2008 crisis. And it is again already. On the other hand, what the Swedish and Finnish and Danish banks (and their pensioners as shareholders) take from the Baltics as untaxed profits, they pay it back via EU subsidies. For now.

Only mistake it made was joining euro, same we are about to make as well.

If that is the only mistake you see, then, well, look again.

What do you mean by influence, of course Russians, same as Scandinavians invest in Baltics. Im not denying that there are no Russian owned bisinesses in Latvia. But they had nothing to do with crisis, crisis came from US, it was not engineered by FSB or something, that is just tinfoil hat thinking.

You are deliberately mixing up global crisis with local crisis.
And even the global crisis was only triggered by the US, not entirely caused by it. I am not blaming FSB for creating the global crisis.

I am blaming the mesh of Russian oligarchs / mafia / FSB / Kremlin money, which infiltrated the Latvian banks (including Parex) and caused a considerable part of the local bubble (and some of it was pulled out right before the LOCAL crash). Mind you, the local bubble was later and larger in Latvia than in Estonia. Estonia was cooling down already in 2007. That was again partly the result of the different share of Russian money in action. Estonia continues to be ahead of Latvia in the economic cycle. Estonia's cycle is more aligned with those of Sweden, Finland and Germany, while Latvia's economic cycle is more aligned with that of Russia. I wonder why?

You know its called a bank run, if I had money during that time in Parex I would take it out too. You would not take out money from a bank if you hear that its about to go bust?

I actually divided my reserves into 3 banks and soon invested it into a real estate.

But the point was that some of the Russian origin money was pulled out either right before the restrictions by using inside information, or AGAINST the already imposed restrictions. At least that is what I remember to have read in the newspapers of that time. Both would be illegal.

Also why Latvian in " "?

For several reasons.
Maybe I have read the wrong signals, but to me it seems that you are:
1. supporting the russian-latvian mixed government of Riga.
2. downplaying the influence of Russian money in Latvia
3. being generally anti-EU and anti-Latvian government
4. For some obscure reason stressing you being the Citizen (of Latvia, I assume). Native latvians would not need to stress that.
5. supporting the so-called "centrist" political side. FYI, "centrist" in politics is just a cunning labeling to prevent being called a radical extremist. There are no left and right, really. The parties reside all over the place in a multidimensional issue space. And the "far right" and the "far left" are often closer together than to the centre. So, in a two dimensional space one could envision a circle, with no wings - but in that case that brings the next question where is the centre of a circle? Perhaps the "centrists" are really the wingmen?

And that is why I am labeling "centrists" as "centre radicals" - because that is what they are trying to hide.

There are "centrists" in Estonia. Very few native estonians support them. About 80% of Estonian russians support them. So I guess you get the hint. You are either among the 80% or among the "very few".

Which further proves my point that EU is both undemocratic and is all about defending the interests of big players there, mostly Germany and France.

But it also further proves MY point that local elections results have very little to do with joining the Eurozone.

No Riga gets its money from the cirizens of Riga, trough individual income tax of those who are registered there. 80% of this goes to the city budget and 20% to the central gov. So they both have separate budgets. In 2010 (high point of crisis) Riga had a 4% proficit so it spent less that it earned and took no debt at all. Both budgets are completely separate .

That is just for 2010. What about 2008, 2009, 2011, 2012?
Both budgets being separate does not negate the fact that they are summed up by EU and international financial institutions to get the big picture. That is what the EU 3% budget deficit cap is all about.

Which is the reason why we should have stayed out of it.

I agree that the question of whether to be in or out should always be kept alive.

60% of GDP is not deep in debt. Japan has a debt of 210% of GDP and it can sustain it while Greece has half of that and is in recession for 6 years now.

Japan is largely in debt to its own citizens. Not so with Greece or Portugal.
And even Japan cannot really sustain that, not considering the declining population and even less after Fukushima. Why do you think the Japanese government keeps lying to its citizens about the real ramifications of the Fukushima accident? Because admitting the truth would immediately collapse the Japanese economy as we know it.

Greece is now in austerity vicious circle, austerity causes recession which makes it borrow more which Greece can't do and has to do more austerity to pay its citizens and around it goes for 6 years now. It has nothing to do with failed state.

I haven't heard Greece paying back any loans, let alone interests. Therefore Greece is not really in austerity mode yet. Greece has to borrow more money precisely because it is not in austerity mode yet - it goes around and around for 6 years now. It has everything to do with being a failed state.

Can you in Eesti? We couldn't so far, it was introduced this year but the rates they give are low only 0.3% in a year long LR gov. bond, doesn't even cover inflation.
https://www.krajobligacijas.lv/

Estonia has not introduced any government bonds yet.
But Japan has, a lot.

Is USA and Japan also failed states, they both have bigger debt to GDP ratios.

Again, a large part of the debt (esp in Japan) is to their own citizens.
And the Jupiter (USA) can afford what the ox (Greece / Latvia / Estonia) cannot.
USA can bend the very space-time fabric of the financial universe, to the extent, so far, but not for much longer.
And yes, many consider Japan and USA as already failed states - the so-called living dead.

Its eurostat. Also talking to some of my Greek friends I realized that out tax avoidance is bigger than in Greece, in Latvia almost everyone buys stuff on company to avoid taxes, almost all cars are bought like that.

Even that would not make Greeks paying more taxes than Latvians.

Same could be said about EU and Germany/France.

France is definitely part of the problem.
Germany does not want to be a problem, but others insist.

What? I dont fallow.

EU border crossings and a common job market are too laxed, EU convergence process is too slow and the EU common market is too restricted.