Latvia passes budget with deficit

Prime Minister Ivars Godmanis told reporters after the six-hour parliamentary session that the budget was the most difficult to pass since 1995.

The prime minister underscored that it is also important to follow next year's budget. "We can come up with amendments only in an extraordinary situation," he said.

The budget was approved by a vote of 53 to 42.

Revenues to the government budget are projected to reach 5.32 billion lats (7.5 billion euros) and expenditures to hit 5.57 billion lats 's the budget deficit is planned at 247 million lats or 1.5 percent of GDP. Revenues to next year's budget are expected to grow by 1.1 percent as compared to 2008, and expenditures by 6 percent.

The 2009 draft budget saw considerable changes between the first and second readings 's revenues to consolidated budget have been reduced by 145 million lats, and expenditures by 227.7 million lats, while the planned deficit to the consolidated budget has been cut by 82.5 million lats.

The ministries had to cut their budgets by 10.67 percent of the adjusted expenditures planned for 2009 budget. By July next year, the number of employees in state administration has to be cut by 10 percent, and wages have to be reduced by 5 percent.

The move has left many public sector workers upset about the amount of money allotted to salaries.

"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 thus 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," Free Trade Union Confederation of Latvia Chairman Peteris Krigers was quoted by the Baltic News Service as saying.