Budget, Financial Services, Latvia, Legislation

It is likely that budget requests from ministries will increase further by the July 26 deadline, but that it is already clear that ministries will only receive much smaller increases in their financing, as the Finance Ministry previously stated that only an additional LVL 50 to 60 million above the current budget base will be available next year.

As reported, Finance Minister Andris Vilks (Unity) believes that there will be heated discussion on next year's budget.

Vilks said that budget talks this summer will be ''especially hot'' and dramatic, as budget requests from ministries exceeds eight-fold budget possibilities. ''Budget possibilities are eight times less than what has been requested,'' the minister said.

He explained that approximately LVL 50 to 60 million is available above the current budget base, but that priority areas also need additional financing. He also allowed for the possibility of a small economic ''miracle'', which would see Latvia's economy grow six% in the second half of the year, allowing for additional budget revenue.

Vilks explained to LETA that budget talks will be very heated, as ministries have high ambitions. Currently, additional budget requests from ministries have exceeded LVL 450 million.

''I understand these ambitions, but they are very unreasonable,'' the minister said. He added that even the most reasonable requests from ministries will most likely not be met in full.

The minister reminded that the government is committed to reducing the budget deficit, and a return to the days if irresponsible spending by previous governments cannot be allowed.

The minister also connected the large budget requests from ministries with next year's Saeima elections, as each political party wishes to show itself in a positive light. According to him, the pre-election period has already started.