Budget, Financial Services, Latvia, Markets and Companies

Zatlers said after the meeting that the government and the social partners have different opinions about the 2010 state budget, writes LETA.

According to Zatlers, the priorities for the National Trilateral Cooperation Council now will include employment, continuation of structural reforms and further work on support for small and medium-sized enterprises, both in the government and in Saeima.

Latvian Employers Confederation's head Vitalijs Gavrilovs told reporters, the information that the social partners wished to halt their dialog with the government was unfounded. "We cannot stop the dialog," said Gavrilovs.

On the other hand, the Employers' Confederation Director General Elina Egle said that even though social partners have no influence on the 2010 state budget, the meeting with Zatlers and Dombrovskis was important. Egle also said that the dialog with the government would continue.

Later in the evening, participating in the talk show "Kas notiek Latvija?" (What's Happening in Latvia?) Dombrovskis said that the government and the social partners would continue discussions on the priorities named by Zatlers, both before and after the budget review in Saeima.

Dombrovskis said that, in his opinion, the 2010 budget would make it possible to stabilize the Latvian economy because Latvia would continue to receive money from international lenders, furthermore, pensions and salaries would not be reduced anymore. The budget though will inevitably limit domestic consumption, which is not good for economic recovery.

Egle said that, during the talks with the government, employers had made concessions, but no the government. Specifically, the Employers' Confederation is dissatisfied with the government's decision to increase personal income tax rate to 26%.

Free Trade Union Confederation of Latvia head Peteris Krigers stressed that the unions still do not support the 2010 budget. Krigers believes that budget consolidation was only done "on paper", and budget revenue will not actually increase.

Krigers also criticized the ruling coalition for not doing enough to implement structural reforms, to which Dombrovskis responded that the government had actually implemented unprecedented reforms within a very short period of time.

As reported, at the National Trilateral Council's meeting Wednesday morning, social partners harshly criticized the budget bill and the planned tax hikes.

Social partners stressed that higher taxes are unacceptable to business community, and called the current budget "anti-social".

Gavrilovs, who had none of his questions answered regarding how exactly the budget will bring about economic recovery and growth, said at the meeting that social partners would not support the 2010 budget.