Ministers need to pull themselves together and properly plan meetings with stakeholders regarding state budget cuts, said Prime Minister Evika Siliņa (New Unity) to journalists today.
President of the Latvian Employers’ Confederation (LDDK), Andris Bite, noted this week on social media that LDDK, as a government social partner, had been invited to attend cost-cutting meetings at the Ministry of Finance with each ministry individually. However, some ministries have been regularly postponing or even canceling these meetings at the last minute.
Siliņa admitted that such practices are not constructive and that it is unacceptable to reschedule these meetings so frequently. She stated that she has instructed ministers not to schedule other events on Tuesdays, when Cabinet meetings take place. However, she also acknowledged the difficulty in coordinating ministerial calendars. Still, the prime minister emphasized that repeatedly postponing meetings is unacceptable.
“I don’t think this is good governance. Ministers need to pull themselves together!”
she said.
As previously reported, the Ministry of Finance is expected to present proposals in June for reducing state expenditure.
During June, the Ministry of Finance must prepare proposals to reduce state spending by at least €150 million to free up funds for defense, education, and demographic policy.
Finance Minister Arvils Ašeradens (New Unity) has previously stated that there is a potential to identify €450 million in savings within public administration over the next few years to fund the defense sector. This would be a reallocation of resources to other priorities, without changing the overall size of the budget.
The minister explained that two scenarios are possible: a “flat” scenario, in which all ministries and sectors are required to cut spending by 5% and determine independently how to achieve it, or a structural scenario, in which savings are found in specific areas or through targeted reforms.
In an extraordinary Saeima session on the 2025 Progress Report of Latvia’s Fiscal Structural Plan for 2025–2028, Ašeradens said that fiscal policy in the coming years must ensure that public debt does not exceed 55% of GDP.
At the same time, the budget deficit must be reduced to 1.5% of GDP by 2029, which means significant reductions
and efficiency improvements in public spending will be required over the next three years.
Ašeradens emphasized that the public sector must save at least €450 million in the coming years. This will require downsizing public administration, eliminating certain functions, merging some state institutions, and possibly even merging some ministries.
The minister also reported that tax revenues in the first quarter exceeded projections by €54 million, but he acknowledged that total tax revenue collection this year might only reach 99% of the projected amount.
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