RIGA - At least three of Latvia's government ministries have announced plans to take the first steps in a massive round of government layoffs aimed at helping to balance the budget.
The layoffs came in response to a call from Prime Minister Ivars Godmanis for each ministry to reduce its staff by at least 5 percent. That decision mirrored the need for drastic cuts to the national budget in the wake of reduced income from taxes and near-zero economic growth in the first half of the year.
"This is an ambitious target, but job cuts are necessary," Finance Minister Atis Slakteris said following the July 1 announcement that the cuts would be necessary. Slakteris said the number of government positions had grown too high and needed to be cut anyway.
Each ministry was ordered to submit a plan to the finance ministry outlining how they will reduce staff while maintaining efficiency. The finance ministry is set to release a summary of the plans on Sept. 1.
So far, the Defense Ministry has announced the most drastic plan for layoffs. The ministry will cut some 184 staff members 's 9.85 percent of its total number of employees.
The Defense Ministry layoffs will include both employees of the ministry itself and some of the institutions and agencies headed by the ministry. The ministry has also canned a plan to increase the number of officers serving in the army and the border guard by 200 people.
Six high-ranking officials will be included in the ministry's staff cuts. Ministry representatives said that any further reduction in the amount of staff would seriously hamper the ministry's effectiveness.
The Foreign Ministry, meanwhile, is planning to cut 25 staff members 's approximately 6 percent of its 404 staff members. Ministry representatives said told the Baltic News Service that the cuts would primarily come from central management personnel.
The Transport Ministry has announced that it will cut the bare minimum number of employees necessary to make the 5 percent mark. The ministry plans to lay off 16 of its 314 employees 's a total of 5.1 percent of ministry staff. The Transport Ministry has not yet specified which positions will be cut.
Godmanis had previously said that cutting each ministry's staff by 5 percent would lead to an extra 45 million lats in the state budget 's less than one-third of the total amount that would need to be cut in order to balance the budget.
The prime minister also raised the possibility of some ministries being consolidated or eliminated altogether.
Slakteris had previously said, however, that the staff cuts would not have a direct effect on the 2008 budget. The finance minister said that the effects would not become apparent until the 2009 budget.
Economic growth in Latvia slowed to 0.2 percent of GDP in the second quarter of 2008. The sharp drop in growth 's down from over 10 percent last year 's translated into a decline in retail sales and ultimately less money collected in taxes.
On July 15 the government agreed to try to maintain a 0.05 percent budget surplus, a goal which would require cutting some 169 million lats in expenditures.