Government Official Siliņa Urges Ministries to Propose Surcharge-cutting Measures
Latvian Finance Minister Seeks €150 Million in Public Spending Cuts
Latvian Finance Minister Arvils Ašeradens has called on sectoral ministries to propose savings of at least €150 million for the 2026 budget, as part of government efforts to manage economic challenges and increasing debt servicing costs.
The call for proposals comes as Latvia aims to balance growing defense spending with economic constraints. Defense is a priority, with plans to increase spending to 4% of GDP in 2026 and 5% by 2028. This necessitates efficiency savings in other areas to manage budget deficits.
The Ministry of Finance has tasked various ministries to submit proposals with combined savings of €150 million to improve fiscal stability. However, specific proposals for defense, education, and demographic-related spending have not been fully disclosed in public sources.
Public sector wages, pensions, and state-owned enterprises are also under review to support fiscal consolidation. Despite these efforts, no detailed public breakdown of cuts specifically for these sectors has been published.
The emphasis is on overall savings across sectors, with defense and pension systems under particular scrutiny due to their size and growth pressures.
In a meeting with the LETA news agency present, Ašeradens encouraged ministries to be proactive and come up with their own proposals for possible savings. He also emphasized that this approach would allow for a more balanced solution.
Ašeradens is expected to present a concrete proposal at the government meeting, according to Prime Minister Māris Kariņš's advisor Silina. Active work and consultations with several ministries are ongoing to find a solution to secure the necessary €150 million. The first stage of negotiations regarding budget reallocation has already been completed, with the second stage currently underway.
The proposed reductions in public spending aim to strengthen Latvia's fiscal stability and ensure long-term economic growth amid challenging economic conditions. The meeting's topic was the budget reallocation, and the issues discussed were reported by the LETA news agency.
The Latvian Finance Minister, Arvils Ašeradens, is seeking proposals from sectoral ministries to secure €150 million in savings for the 2026 budget, as the government looks to balance economic challenges and increasing debt servicing costs. This is part of an attempt to negotiate with the European Union (EU) on financial matters related to business and economic stability.
To manage budget deficits and support fiscal consolidation, various ministries have been tasked to submit proposals with combined savings of €150 million. These proposals may affect public sector wages, pensions, state-owned enterprises, as well as defense and education spending, although specific details have not been fully disclosed in public sources.
