Structural reform proposals in disarray

  • 2011-01-20
  • From wire reports

RIGA - Saeima European Affairs Committee members on Jan. 17 reached a compromise on the Finance Ministry’s report to the European Council meeting of ministers of finance (ECOFIN), during which the ministers will be informed on planned structural reforms in Latvia that will be carried out in addition to budget consolidation measures, reports news agency LETA. The report will be reviewed at the Jan. 18 ECOFIN meeting. However, though the government approved the measures, the Greens/Farmers Union (ZZS) objected to the report, particularly to the planned structural reforms in education and social areas.
ZZS Saeima faction leader Augusts Brigmanis emphasized on Jan. 17 that ZZS does not support further reforms of social benefits and will only express its support if the benefits are increased. ZZS also objects to “the higher education reform as currently planned,” said Brigmanis.

He also pointed out that ZZS ministers did not really know what they were voting for, and did so without the party’s consent.
Prime Minister Valdis Dombrovskis (Unity) emphasized after the coalition partners’ meeting on Jan. 17 that the higher education and social benefit reforms were already mentioned as possible directions for structural reforms in 2011. He added that some of the planned structural reforms could be included in the 50 million lats (71.4 million euro) budget consolidation plan.
Later in the day, Saeima European Affairs Committee members finally reached a compromise and Latvia’s position was adjusted by generalizing the planned structural reforms in social and education areas as a “continuation of structural reforms.”
The Finance Ministry’s task force, led by Finance Minister Andris Vilks, will prepare budget consolidation proposals by the beginning of February. In order to consolidate the budget, the task force is working in two directions - discussing budget cuts in every program, and possible structural reforms.

This year’s budget, adopted by Saeima on Dec. 20, went into effect as of Jan. 1, though additional consolidation measures were urged by the international lending group.