Budget, Financial Services, Latvia

Vaira Vike-Freiberga.

In Vike-Freiberga's view, further budget cuts will only encourage economic downturn, increase unemployment and, as a result, increase the burden on the state budget. "We are in a downward spiral," Vike-Freiberga said.

She underlined that Latvia lacks exports support programs and incentives for warming up the economy, reports LETA.

"The government has no choice in the sense that we were wasteful and now we are insolvent," the ex-president said.

In Vike-Freiberga's opinion, it is important not to sell off the valuable assets of the state due to the crisis. For example, selling municipal properties now, when the prices are low, would be very risky.

As reported, Prime Minister Valdis Dombrovskis (New Era) announced on Monday that next year's state budget expenditure would have to be cut by another LVL 55 to LVL 60 million.