SHOPPING MALLS OF LATVIA ARE PREPARING FOR BANKRUPTCIES AND UNEMPLOYMENT

The owners of the largest shopping malls in the Baltic republic have addressed the Prime Minister of Latvia and representatives of the branch ministries with an open letter, in which they announced the crisis in trade. According to the business owners, the only way to save the industry from a wave of bankruptcies and unemployment may be a system of the state financial assistance to cover rental obligations.

The bankruptcies of small tenants, inevitable in the absence of government support, will result in the loss of hundreds of millions of dollars in tax revenues and massive unemployment, say the authors of the letter. What will be the reaction of the Prime Minister Krisjanis Karins is still unknown. However, it will be difficult not to pay attention to the appeal of representatives of ten largest shopping malls of the republic.

Before the onset of the Covid-19 pandemic, the Latvian trade sector employed 133,369 people who, in the current situation, may be left without sources of income.

However, the closure of Alfa, Mols, Spice, Domina Shopping, Ozols, Galleria Riga and other shopping malls due to the coronavirus led to disastrous consequences. According to their owners, in such a situation, compensation for losses incurred by the entrepreneurs is necessary.

Compared to the other countries of EU, Latvian entrepreneurs consider the support provided by the state to be insufficiently effective. The complex and fragmented forms of support that the state was previously forced to provide the business with do not cover the needs, being insufficiently operational and purposeful.

At the moment, Latvia is one of the three European countries with the highest unemployment rate among the working-age population (9.8%).

Six months ago, the Latvian Association of Trade (LAT) warned that many trade enterprises were on the verge of ruin. About 40% of shops and pavilions were closed, and out of 35,000 companies, only 840 enterprises (2% of the total) received real support. The reason was bureaucratic obstacles and criteria for receiving financial support from the country's budget, which make the organization of state support in Latvia different from other countries of the European Union.