Latvian Political Monitor

Kulbergs explained why the US did not invite Latvia to the NATO meeting in Poland.

Kulbergs explains why the US did not invite Latvia to the NATO meeting in Poland (1)

The government has rapidly shrunk the list of unfinished work - Kulbergs highlights the best ministers

Russian pressure will not change Latvia's and Estonia's support for Ukraine, minister stresses.

Kulbergs explains why Latvia was not invited to NATO's future discussions in Poland.

Russian pressure will not change Latvia's and Estonia's support for Ukraine - minister

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.

There are currently no signs that Russia could directly invade any NATO member state, Rinkēvičs announces (4)

Latvia currently has no facts that Russia could directly invade any NATO member state, says Rinkēvičs

BNN in Focus | Review of political parties: “United List” – is the “Kulbergs effect” at work?

Soft power seeping back in through the side door can cost very dearly.

Is it true that others also feed off security funding; why by 2030 the budget must be balanced so that borrowing would only be needed for defense - conversation with Finance Minister Māris Kučinskis and Procurement Monitoring Bureau head Artis Lapiņš: https://t.co/IBZZgJiWum https://t.co/F6isT83Bvm

At present, Latvia has no evidence that Russia might directly invade any of NATO member states - Rinkevics

Kulbergs on the upcoming budget deficit: in 2027 Latvia will have to "find" EUR 421 million somewhere

Promises are expensive, money is not enough – Kulbergs reveals how big a hole awaits next year's budget

How is cooperation going, and why were soldiers and border guards not allowed to swim in the same pool – a conversation with Saeima Defense, Internal Affairs and Corruption Prevention Committee Chairman Raimonds Bergmanis (AS) and Interior Minister Jānis Dombrava (NA): https://t.co/5eGt8At73t https://t.co/QJxDMc4O2C

VIDEO. Why a Latvian soldier and a Latvian border guard were not allowed to swim in the same pool

Politics / Public participation