PLANTS ARE BEING MASSIVELY SHUT DOWN IN LATVIA

The decision of the Latvian authorities, which limited the activity of business during a pandemic, may lead to a massive shutdown of the enterprises, if not to a complete collapse. It is noted that the criteria, established by the state for receiving assistance during a pandemic, have prevented businesses from receiving real support. The situation in other EU countries, as well as in neighboring Lithuania and Estonia, turned out to be much better.

 Experts have already pointed out that the industries that has survived in Latvia, may not survive without an export orientation, the situation with which is very difficult. The relatively low level of wages and the need to reduce costs in energy consumption was also a brake on the normal functioning of industrial production.

The decisions of the authorities during the pandemic became a “final blow” for industrial enterprises in Latvia.

One of the victims was a fish processing plant in Liepaja. Instead of the bailout that had been promised by the authorities, the company fell into bankruptcy. The owner of the plant, Igor Krupnik, handed over the reins of management to the so-called “insolvency administrators”, appointed by the creditor bank (Trast komercbank). The work of the enterprise was suspended, and only guards from neighboring Riga appeared on the territory of the plant.

The owner of the company, who has both Russian and Israeli passports, plans to move to Israel, since it was not possible to make an agreement with the bank on the restructuring of the credit obligations.

The employees of the company have been at the labor exchange since the end of spring.

It was not possible to obtain guarantees of the possibility of work until June 2021 from the bank's management - the fact is that the creditor bank itself turned out to be bankrupt in 2016.

The similar situation exists at another enterprise, located not far from the plant. Lauma Fabrics textile factory was on the verge of complete shutdown back in May this year. Experts note that there is no motivation for the administrators, appointed in the process of bankruptcy, to keep the companies working.

According to the data of LAT (Latvian Trade Association), only 2% of 35,000 trade companies and about 12% of public catering companies received state support during the coronavirus crisis. No more than 5% of enterprises in the republic received real help, while 40% of trade companies, 65% of service companies and 80% of catering enterprises were closed. It should be noted that many simply did not have time to submit the necessary documents to receive state support within a short period of time set by the state.