Financial Services, Latvia, Legislation

The university professor was detained in connection with the opinion that he had expressed during a debate about the development of the Latvian economy and the future of the banking and credit system of Latvia, which was published in Ventspils' local newspaper Ventas Balss. The Mayor of Ventspils Aivars Lembergs also participated in the discussion.

During the discussion, which was published in the newspaper on October 2, Smirnovs said: "The U.S. problems are trifling, compared to what awaits us. They have now reached the bottom and will start to recover. Problems in the European Union have only just begun and we may be hit by a crisis that is ten or maybe twenty times worse than that in the United States. The Swedish banks will no longer be able to offer inexpensive loans through their subsidiary banks in Latvia. They will tell us to pay back the debts! How will we pay them – with the real estate? We have no assets to pay back the debts! [..] The pyramid has been built and now we have to wait until it collapses. [..] The only thing I can suggest now: first of all, do not keep your money in banks, second: do not save money in lats, as it is very dangerous at the moment."

The Security Police have declined to comment.

Kristine Apse-Krumina, aide to the Security Police chief, said though: "The detainee is not a press representative, but the detention was carried out in connection with a publication in one of Latvia's newspapers. [..] He was kept in custody for two days."

Representatives of Ventas Balss, in turn, said that the Security Police started inquiring about the newspaper article a few days after it was published.

"What happened is absurd. We wanted to find out an expert's opinion. He is competent and courageous, he has a degree, the knowledge and the experience," Imants Viksne of Ventas Balss commented on the detention of Smirnovs.

The Security Police are currently investigating two criminal cases on possible attempts to destabilize the financial situation in Latvia. The Security Police stated that no further information about the investigation in these cases will be released for the time being so as not to impede the investigation.

As reported, the rumors about the possible devaluation of the lat influenced an increased interest from the side of residents to exchange lats to euros. In an interview to LNT television's broadcast, Prime Minister Ivars Godmanis (Latvia's First Party/Latvia's Way) underlined that these rumors were totally ungrounded.