Latvian Political Monitor

Yes, the menu has several sections. One of them is about tax policy. The IMF, for example, doesn't believe that you can cut expenses. They offer only that. In the Ministry of Finance, we put several sections in the menu - expenditure reduction, reforms (merging institutions), and also a tax section. Then all of that can be combined in different ways like Lego bricks. However, a deficit-free budget cannot be achieved without taxes. That is because we spend on defense in something like a half-war mode. And in other countries it is exactly the same, the same problem with the budget. My idea is to aim for a 'normalized deficit-free budget'. If you don't take into account the increase in defense spending from 2% to 5%, and accept those 3% as above normal and don't compensate for them, then you can achieve a normalized deficit-free budget. As for taxes, they are relatively low compared to GDP. And that is also why, for example, the health sector cannot be funded as much as we want (currently below the OECD average relative to GDP). So everything is about desires. If you want to fund education, health, etc. as much as in OECD countries, then the tax burden must be correspondingly higher. So what do we want? We have to choose. In the coming years, the tax burden, by the way, with unchanged policy, will continue to decline relative to GDP, which also needs to be taken into account.

🇱🇻 In these photos my son grows. And in a sense, so does our Latvia. Valters and I have a tradition. At every election, one photo at the ballot box. Always together. In the first photos he is very small - still in my arms. Later he is already standing next to me. Today he is already 14. And this time, looking at our old photos, one thought struck me: these are the last Saeima elections in which Valters is still standing next to me. In the next ones he will make his choice himself. With his own conviction and his own hand. Perhaps that is how time is best measured. Not in years, but in how the child we once carried in our arms grows into a person who will have to take responsibility for our Latvian state. Today I also made my choice - for people and a team that I trust and am convinced can solve the accumulated problems in security, economy, finance, education, health and other matters - for list No. 7, the United List @Apvienotais_ and the prime minister - Andris Kulbergs! @AndrisKulbergs 🌼 But regardless of what your choice is, go and make it. Because election day is not only about politicians. It is about all of us Latvian patriots, our families and Latvia, which one day we will fully hand over to our children's hands. Today our hands are still together at the ballot box. Next time - everyone will already have their own voice. 🇱🇻

Day No. 90 in the prime minister's chair (Thursday, Oct 1) – SPECIAL ANNOUNCEMENT TO ALL ILL-WISHERS – 80% of the government's work HAS BEEN DONE! A decision on RailBaltica has also been adopted; 📊 79% of the ministers' TOP3 priority tasks — DONE. Today we reviewed the results of the first four months of the government's work. Of the 61 priority major TOP3 tasks of ministers, 48 have been completed — 79%. Of the 106 planned smaller tasks, 88, or 83%, have been achieved. In the remaining month the government will work, we will complete the remaining 20%. Among what has been done since the last meeting this month: - 4 ministers have completed their tasks 100% o @VARAM_Latvija @Edgars_T main achievement = the election system has been developed and handed over – the mark for the work done will be given by voters on October 3. o KEM @JanisVitenbergs main task is the launch of the heat market overhaul – the Rīgas Siltums tariff rectification plan with 12 points and clear deadlines. o @Tieslietas @EdvardsSmiltens prepared the law on the status of 30,000 Ukrainians in Latvia, so they can work and stay after March 1, 2027. o @EM_gov_lv @valainis completed the simplified construction process (bureaucracy genuinely reduced); fast-track coordination for street vendors and businesses introduced. ✅7 ministers have almost completed their Top3, just 1 completed task short as of today o @Finmin @MarisKucinskis almost completed all tasks with Tuesday's Finance Ministry report and cost-control measures already by the end of 2026. o FinMin completed an important task – all procurements will be published from the first €, done ahead of the 2028 date set in law. o @Iekslietas @janisdombrava submitted a revised migration report and an immigration-fighting plan. ✅Remaining tasks – ministers still have a month left, until November 3: o 4 tasks require a political decision to be completed; o 2 tasks depend on the adoption of the new EU MFF multiannual budget; o 1 task - @veselibasmin @H_AbuMeri the unified appointment system will be completed within a month, once the cybersecurity tests are finished. Tasks completed in 4 months, in addition to the government declaration: ✅The problem of NGO money-wasting and opaque funding allocation has been brought to the fore. The Finance Ministry has been tasked with developing a clear funding allocation procedure, with an efficiency assessment and the application of an open competition. ✅Suspension of the TET/LMT non-commercial transaction, preparation of a new, transparent solution that meets state interests. ✅Cooperation with FRANCE achieved to strengthen Latvia's security. ✅At the Eastern flank prime ministers' level, support achieved for the €7 billion initiative from the new EU MFF budget, where the justification is to be sought in the impact from the aggressor state in the East and the war in Ukraine. ✅Construction of the 6th stage launched at the airport – the new terminal that had been delayed for years. ✅Cybersecurity – requirements for the security rules of critical infrastructure data centres adopted, work that had not been done for 2.5 years; in this government we did it in 1 month. o Cybersecurity monitoring equipment installed for 15 critical IT systems https://t.co/3UE7BCYahN for infrastructure protection/monitoring. ✅ICT moratorium – with the support of the European Public Prosecutor's Office, a cartel in state IT procurement has been halted. The imposed procurement moratorium stopped corruption, saved €21 million in the state budget and forced ICT projects worth €130 million to be reassessed, whose usefulness must be evaluated from zero. ✅A historic decision on the centralisation of ICT systems achieved; ✅Operation "VILKATIS" made it possible to neutralise a Russia-organised hybrid attack of illegal migration through Belarus, combining the border guard, the state police, the national armed forces and KVC. ✅OCTA regulation – I have personally been driving amendments in the Saeima for 3 years, so that a traffic accident victim is protected by an insurance guarantee fund if the guilty party flees the scene. In addition, it will be decided that an OCTA accident victim can turn to their own insurer instead of the guilty party as today. This will finally change the historic mistake, shifting the emphasis from the cheapest price to quality. The government's work is not finished. Until the end of the government's mandate, we will not slow down the pace. More on #RailBaltica in the next post 1/2

Day No. 85 in the prime minister's chair (Monday) – 💰 Parties — who promises more? 📊 Budget scenarios; 🇳🇵 News from Nepal The day was spent working with @MarisKucinskis, @Finmin and @Valstskase officials and managers, analysing state finances, economic forecasts, saving opportunities and various scenarios. 📊 Figures, data and facts: ➖ The financial policy and spending management of previous governments have long been irresponsible — the budget deficit has been kept at the maximum possible limit, regularly borrowing money also for everyday spending. Such an approach had become the norm, and the whole Latvian society and sectors have become accustomed to this model. ➖ In 2028, the largest budget deficit is forecast — €2.7 billion, or 5.4%! ➖ Just servicing the state debt, i.e. interest payments, will already cost €681 million next year. This money will have to be found somewhere — so somewhere less will have to be spent. Debt servicing costs have risen from €155 million in 2021 to €681 million in 2027, because the price of money has become significantly higher. ➖ By 2030, the budget plans adopted by New Unity's finance ministers and prime minister provide for a deficit of around €2 billion every year. That is not safe and sustainable management of state finances. ➖ The Siliņa government (JV) left behind decisions adopted in the Cabinet of Ministers or laws worth €421 million in 2027, and this amount rises to €663 million in 2030 — WITHOUT ANY FINANCIAL COVERAGE. Of which: 🏥 €264 million — for health care 👩‍🏫 €56 million — for teachers' salaries ➖ Latvia's current and forecast economic growth is stagnatingly low — around +2% a year, but its contribution to the budget is largely eaten up by forecast annual inflation of +3.5%. ➖ The largest increase in budget expenditure is for defence and security — +32%, amounting to around €2 billion a year. ➖ The state has long been programmed to live at the maximum permissible budget deficit, without reviewing existing expenditure and on top of that adding another +1.5% of borrowing for security, which the 🇪🇺EU allows to be additionally included in the deficit for three years. Conclusion? 👉We do not review existing budget expenditure. 👉We continue to live on debt. 👉And we borrow even more, because we are allowed to do so. That is not right. ➖ Also noteworthy is the manoeuvre of E. Siliņa's (JV) government, borrowing 1% from the 2nd pension level. That too will have to be paid back into the budget — an impact of around €280 million in 2029. ➖ Also in 2029, the term expires for the additional tax imposed on banks, i.e. the windfall tax. As a result, the state budget will also lose these additional revenues. ➖ One of the biggest problems in budget planning is politically adopted decisions to "tie" spending in specific sectors to a certain percentage — for example, 6% of GDP for health care — or to automatically index wages. If a budget expenditure is tied to a specific %, the whole expenditure part automatically increases as GDP or another variable grows — without any new government or Saeima decision. ✅ There is also good news. The Ministry of Finance and @kucinskis have been working since July, reviewing the ministries' base expenditure, and have already found €214 million in savings in the 2027 budget base. That is a step in the right direction, but there is still a lot of work to do. We must continue to optimise expenditure so that there is money to cover already planned and adopted commitments for which no revenues have been identified. 📕 One thing is clear to me — the next government will have to adopt an iron-fisted "2027–2030 FISCAL STABILITY AND REFORM PLAN", more precisely — a special law, similar to during Covid. The way out of this financial situation is not a simple spending-cutting plan. That will not be enough this time. 📈 The economy and budget revenues must be grown rapidly, with the main emphasis on the opportunities of export-capable companies. I believe this is possible, because such slow economic growth can and should be increased by at least +1.5 percentage points a year. That would give the budget an additional around €300 million in revenue. 💶 But we need to save already today — already for 2027. That is why the ministers agreed: ⛔ To stop the typical DECEMBER waste — meaninglessly spending the balances of ministries and institutions at the end of the year. ⛔ From 1 October, to suspend the conclusion of any new contracts and commitments. A similar moratorium as in the ICT area — if something is truly necessary, the need and usefulness must be proven. 🧊 To freeze salaries at the 2025 level. ⛔ To stop paying DECEMBER bonuses and extra payments — an exception may be allowed only for special achievements and with a manager's justification. ⛔ To stop unnecessary events, seminars, conferences, consultations and studies, as well as office and equipment renewal, IT and other investments that are not critically necessary. 🔍 Ministers must take political responsibility and, together with state secretaries and heads of institutions, review and justify any budget expenditure above €50,000. 🗳️ PARTIES — WHO PROMISES MORE? Given this stark budget reality and the legacy left in state finances, where even borrowing up to the maximum 🇪🇺EU-permitted budget deficit limit is not enough, the pre-election promises of political parties stand out in particular. They can no longer be measured in hundreds of millions — they are already measured in billions of euros, moreover without financial coverage and without a real economic growth offer. I have analysed the programmes of several political parties and summarised each party's promises in monetary terms for the period from 2027 to 2030. 🏆 The political "Promisers" record-holders for the next four years: 🥇 No.1 — Suverēnā Vara / Jaunlatvieši (Stepaņenko wants to give benefits, cut VAT, raise wages): +€3.61 billion 🥈 No.2 — @LatvijaPirmaja (@SlesersAinars – we lower VAT on everything): +€2.87 billion 🥉 No.3 — @ZZS_ (@ViktorsValainis — promising to abolish VAT): +€2.47 billion 4️⃣ @Progresivie (@suvajevs — because money grows on trees): +€2.1 billion 5️⃣ @Jauna_Vienotiba (@aseradens — we continue to borrow endlessly): +€1.56 billion 6️⃣ @tblv Nacionālā Apvienība — (wants to fund language, education, culture and fight illegal migration, without thinking about the ECONOMY): +€1.55 billion 7️⃣ @Apvienotais_ — main emphasis on education, which will pay off in the future, with a justification of where we will get the funding: +€763 million 🇳🇵 NEPAL In the Nepalese context — all those belonging to Latvia are still in the status of missing persons. According to the Civil Law, one must wait until April 2027 to change this status and relatives can start arranging the necessary documents. Until then — hope dies last. The Latvian government is ready to help in every possible way, if such a need arises.

Finally a correct decision... conflict of interest at RīgasSiltums, husband wins tenders, very poor corporate governance, wastefulness in procurement... it is not normal that the VIP nursing home for state-owned company management continues its usual practice. Thanks to Hossam for the decision https://t.co/tT4d1dZ4Ai

What are you going to purge? Well, then say it! Lay off the army, police, doctors, or teachers? They are all in the public sector. At all levels, you can barely scrape together 100 million from civil servants. Not billions by any means. Then, whether you like it or not, you will have to answer to those who will be elected. If you are so eager for power, realize that it will be you who will have to do something like that, and then your own brothers and sisters will cut off your head. That is exactly what happened to the French with that revolution. After all, you too are revolutionaries?

I will please my ill-wishers. I feel this bad for the first time in these months. Spending millions pointlessly in one day is very, very bleak. I see every day how difficult it is to scrape together even a few million for a good initiative (recently we gave a few more million for palliative care), but like this... and everything goes to waste in one go. Damn😏

@GirtsKarnitis @realNepareizais We really spend relatively little against GDP, and GDP is also relatively small. But budget revenues are also smaller, even on average relative to GDP. Six of one, half a dozen of the other.

Logically written, but my emphasis is elsewhere. People's way of thinking is not rational; practically no one reasons that way. They reason like this - I pay taxes, where's my free euro-renovation service for nothing! For example, the very availability of health services. The question is, first of all, about how much and what of our paid taxes we can realistically afford? Declaratively this service is 'free'. But practically it is available only to those who can stand (and for a long time) in queues. And overall in the health system, the state allocates 2 euros, we pay 1 euro from our own pocket (out of pocket expenses). That too is the service in the quality and volume we can afford. But shouting doesn't help - it's promised to be free. And here's another thing. We are a relatively poor EU country. But medical equipment costs the same everywhere. Yes, salaries are lower, but that doesn't compensate for the rest. And we will be able to afford even less if now again before the elections they drop the excise duty on fuel (realistically). But that doesn't stop people from shouting - where's my Lenin log!

I'm already talking about the same thing. I haven't seen free medicine myself, but I know that pensioners stand in those lines and someone already gets it. And I'm not complaining, that's how the system works, and I don't feel sorry. In the country overall, 2 euros for medicine come from the budget, and each person adds 1 euro on average. The out-of-pocket expense indicator is around 30%. Probably even more, because not everything goes through the register.

Two questions for the Leninists. In communism everything is free. Where is my free education and health quotas? The state 'must provide for me', where is it? A super popular thesis. Half a year ago the Leninists demanded the pension money back. Logically - pensions are paid by the state, so it's free! I was annoyed. Today the Leninists demand to pour fuel cheaper. For each and every one, in a united pioneer row. Clear. Now I am extremely annoyed. But I always try to understand, so two questions. 1) what is 1+1? 2) where did you grow up like this? I saw the Soviet Union, that 'free' thing. I am old. But I have never demanded anything from the state for free. I know that now I pay taxes for other people's pensions and also health quotas go to others. I have never seen 'free' for myself. Neither in collective farm times (then it was through blat, which is not free), nor now. Again, where did you screamers grow up?🫠

Shut up, communist. The state is not a milk cow. These are expenditures for defense, health, education. All from VAT and excise.

In France, 11% of fuel stations have no fuel at all. There are many more where either diesel or petrol is missing. And the price in the rest is already approaching €2.50. Meanwhile, local activists think even worse than excel. We'll reduce taxes, take from hospitals, and fuel will appear in gas stations cheaply. As Brezhnev said, the economy must be economical.

@GintsVilgerts Saeima deputies do not have insurance policies; I myself bought one for myself.

Life in the regions. Life with children... https://t.co/gxNRUgzopA

Currently it has been reduced by 4 cents. The state budget already has a hole, which reduces the possibilities to finance even the health sector. Next year and the next 3 years, the budget hole is in several billion euros, someone will have to cut it off. The minus only gets bigger. Riches, believe? Those 4 cents do not solve anything individually, the rise in fuel prices is determined mainly by global processes. Can be torn down further, can even divide the country into Lenin's logs. What will we gain, where are we going? Quo vadis? Me, me and mine!