Sunday, 27 November 2011

Memos from Member States

Belgium: Political stalemate to end?
Moves were made to put an end to the political stalemate in Belgium this week, with Elio di Rupo as the likely candidate to become the next prime minister after the King asked the French speaking socialist leader to form a new government.

The move comes after the political parties reached a deal on the 2012 budget in which Belgium commits to reduce its deficit to 2.8 per cent of GDP. The agreement symbolises an important step towards to the formation of a new government more than 18 months after elections were held.

Pressure was building on Belgium to act after Standard and Poors downgraded the country’s credit rating stating the government’s inability to respond to economic pressures as one of the principal factors contributing to the downgrade.

Latvia: Latvijas Krajbanka goes bust
The Latvian financial watchdog Finansu un Kapitala Tirgus Komisija (FKTK) announced this week that the troubled Latvian bank Latvijas Krajbanka had no further deposit availability, meaning that the bank is no longer able to function.

The Latvian government has announced that there will be no state bail out for Latvijas Krajbanka, of which the Lithuanian government is the majority shareholder. The Latvian government has instead urged Lithuania to bail out the bank.

Krajbanka's clients will receive their state-guaranteed compensations for their deposits up to the sum of LVL 70,000 (EUR 100,000) within 20 days. Deposits beyond that sum will be lost if no takers are found to bail out the bank. Several Latvian state institutions have much larger deposits in Krajbanka.

While the majority of deposits in Latvijas Krajbanka – LVL 343 million altogether – is private individuals' money, small and medium-sized enterprises, corporate entities, and state-owned companies are also entitled to receive the state-guaranteed compensation. Despite the much larger size of their deposits however, these companies and intuitions will only receive a maximum of LVL 70,000 each, the same sum as individual investors.

Germany: Neo-nazi activities to be investigated
The east-German authorities faced scrutiny this week over whether official protection was afforded to a trio of neo-Nazis who murdered members of minority groups – mostly Turkish store owners but also one German police officer – between 2000 and 2007.

Two male members of the far-right group called the ‘National Socialist Underground’ were found dead this month, in suspected suicide cases.

Investigations are currently being undertaken to ascertain whether the killers benefited from sympathy from the German information services. All unsolved cases with a possible racist motive since 1998 were reopened this week.

By Sonia Jordan