RIGA - After six-hours of parliamentary debates on Nov. 14, the government's much awaited 2009 budget was passed. The new budget includes a GDP deficit of 1.5 percent.
The budget was adopted with 53 votes for to 42 against.
Government budget revenues are projected to be 5.32 billion lats (7.5 billion euros) while expenditures are projected at 5.57 billion lats. The new budget will run a deficit of 247 million lats.
Revenues are expected to grow by 1.1 percent and expenditures by 6 percent.
The second draft of the budget differs considerably from the first budget draft. Revenues were reduced by 145 million lats and expenditures reduced by 227.7 million lats. The planned deficit was also cut by 82.5 million lats.
The projected GDP growth was also changed, down from 2 percent to 1.1 percent.
While working on the 2009 government budget and after closely following the world's economic development 's and the downward economic spiral 's several significant measures to increase efficiency of state administration institutions have already been carried out.
The ministries have cut all their budgets by 10.67 percent of the adjusted expenditures planned for the 2009 budget. By July 2009, the number of employees in state administration will be cut by 10 percent, and wages will be reduced by 5 percent.
The budget projects that the maximum government debt at the end of 2009 will be 2.82 billion lats.
DISCONTENT
However, not everyone is pleased with the new budget. The Free Trade Union Confederation of Latvia (LBAS) said that the 2009 budget draft was unbalanced both financially and socially, and it doesn't bode well for policemen and healthcare workers.
"The trade unions are well aware of the economic situation in Latvia and the wider world, but are critical of the way the national budget was drawn up and adopted, without informing or consulting social partners and the public in general," said LBAS spokeswoman Sanita Lorence.
Peteris Krigers, head of LBAS, said that the government kept information about the budget secure, making it impossible to know the progress and information regarding the budget.
"Unfortunately, even if we had wanted to, we would have been unable to follow the drafting of the budget. Information has never been so tightly guarded from social partners as this year. It seems that the government tried to gradually accustom us to the gravity of the situation, but with this attitude to social partners we will never arrive at good quality, and most importantly, timely decisions on the national budget," LBAS chairman Peteris Krigers said.
However, not all news was bad for workers. LBAS also said that they were satisfied by the increasing collaboration between the government and workers, which resulted in last minute changes for the 2009 budget. Minimum monthly wages were raised from 160 lats (227 euros) to 180 lats.
A total of 510 proposals had been submitted for a second reading of the bill.
