Latvia’s Prime Minister Krišjānis Kariņš is not ready to name the exact amounts of money planned to be saved by having ministries review their budget expenditures. However, information available for previous years indicates ministries are left with an average of EUR 100 million of unused budget funds every year.
In his interview to TV3, Kariņš said the main objective of his second government for the first 100 days of term was to ensure quick approval of the state budget. This was accomplished in the end, but there are still hopes to find additional funds to divert towards healthcare and education. The politician is confident it is necessary to perform simultaneous school and hospital reforms. Both should be submitted to the government for approval in the coming weeks.
Additionally, all ministries are ordered to review expenditures to find necessary additional funding for healthcare and education.
Kariņš did not mention any specific amounts intended to be acquired through this measure. He did say that about EUR 100 million of budget funds is left unused every year. This amount could be diverted towards healthcare and education.
The PM mentioned that until now ministries focused more on the distribution of budget funds and less of looking for ways to save money.
According to him, there are only two alternatives – raising taxes or borrowing more money. Kariņš called both these options economically undesirable. The government did try to save money in budgets of various ministries. Unfortunately, too often these attempts ended up with statements from those ministries that it is not possible to save any money in their budgets.
As for the topic of banking operations, Kariņš once again said banks in Latvia do not provide sufficient lending to the national economy and households. He also said Latvia has the highest loan and the lowest deposit rates in the European Union.
According to him, the government’s objective is not adopting a new fee for banks, rather making sure they better perform their duties.
Banks should review their policy and lower interest rates to balance them with the interest rate paid by the government, said Kariņš, adding that «the solidarity tax is on the table».
As previously reported, Kariņš has ordered all ministries to review their expenditures to find the necessary additional funding for healthcare and education.
«The state budget is approved. Both the Ministry of Health and Minister of Education and Science are committed to implementing major changes to their respective fields in order to make both systems more efficient and allow them to provide accessible services of appropriate quality to our residents. We have plans for the reorganisation of the school network and grading of hospitals,» stresses Kariņš.
«To find additional funding for both these priority sectors, I have ordered all ministries to review their respective budget expenditures. This information will be submitted to the Ministry of Finance, which will then compile it and submit in a report to the government,» said the PM.
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