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Previously the economic effect from revision of the ministries’ basic expenditure was estimated at EUR 50 million.

The finance minister said that the wishes and needs of the ministries exceeded the capacity of the 2017 national budget but the additional EUR 64 million would make it possible to implement certain vital measures planned next year.

The falling energy prices had been one of the factors that helped to reduce expenditure, and every ministry had proposed own measures to economize on expenses, she said.

Reizniece-Ozola said that the ministries’ requests for a total of EUR 400 million additional financing in 2017 did not signal the return to the extravagant practices of the time of the economic boom. The ministers do not ask for the money for their personal expenses, they seek extra financing in order to raise salaries to teachers, medical personnel, police officers etc., she said.

”But the budget capacity is limited, and we will have to choose from this wide array which needs are most urgent and must be financed next year and which needs will have to be put off until a later time,” the finance minister said.

She said that, in the context of the next year’s budget, the ministries will be required to plan not only their expenditure, but also revenue.

Prime Minister Maris Kucinskis (Greens/Farmers) told the press after the Cabinet meeting that today the government had completed an important phase in the budget drafting process. After this meeting, fiscal space had started to take shape and the government could plan and approve the priorities in the next year’s budget.

"I am glad that an obligation has been imposed on the ministries to look for additional finances in order to implement the budget priorities such as reforms in education, health care and security,” he said.

The ministers had agreed to the priorities at the meeting today but they will be free to propose the new policy initiatives and apply for the necessary financing, the prime minister said, adding that the budget capacity was limited and it would not be possible to finance activities not included in the government’s action plan.

The Latvian government discussed the matters pertaining to the national budget in 2017 and in the medium term.