RIGA - Financially, we are very well positioned in this crisis, Prime Minister Krisjanis Karins (New Unity) said in an interview to Latvian Television on Wednesday.
The prime minister indicated that when the crisis broke out the Treasury already had EUR 1 billion that could be used as a budget deficit to cope with the crisis impact, but by Tuesday evening that amount had increased to EUR 2.6 billion. "We have continued to successfully borrow in international markets on very low interest rates of 0.2 and 0.4 percent," Karins said.
The prime minister said that this money will be spent on protective products, hospital equipment, business support, downtime benefits and also on fueling the economy when it "starts to reopen".
"We are already discussing how to do it better and more effectively," Karins said.
He noted that unlike in other European countries, in Latvia money or financial instrument guarantees make up more than 10 percent of the country's GDP, which can be used to stimulate the economy. "Most European countries are not in such a situation. In that respect, we are very well positioned in this crisis," the prime minister said.
Asked to comment on the situations where employees are denied downtime pay because of their employers' tax debts, Karins said that entrepreneurs should reach agreements with the State Revenue Service on paying off their outstanding tax debts within three years.
The prime minister stressed that all those who have been paying their taxes are eligible to claim downtime benefits during the crisis. This situation, he said, reveals that there are quite a few people in Latvia who have not been paying their taxes. "This is a serious fault we have to correct by adjusting our tax system so that everyone is included in the system," the prime minister said.
Karins did not deny that there is a great difference between supporting those who have been paying their taxes and those who haven't. "We are not going to exclude anyone, but one must realize that those who have not been paying their taxes for years must wait a bit while the government takes care of those who have been paying taxes," the prime minister said.
As for those who have been cheating to secure downtime pay, Karins promised tough penalties, warning that providing false information to the State Revenue Service is a criminal offense. "Such actions are unforgivable at a time when so many are in need of money... Essentially, this is stealing money from Latvia's residents" Karins said, promising tough punishments.
Commenting on commercial banks' reportedly dishonest activities in this situation, Karins said that authorities are talking with the banks and a solution will be found. "We have various tools in Latvia. I would like to remind banks that the state is here for a long run, and if the banks want good relations with the state, they have to think twice before thinking narrowly and in the short-term," he said.