Minister of Economics advocates for trimming down public administration procedures
Latvia's Ministry of Economics Proposes Public Sector Reforms for Cost Savings
In a bid to reduce budget deficit and public debt pressures projected through 2026–2028, the Ministry of Economics in Latvia has proposed several changes in the public sector. These proposals are part of a broader effort by government ministries to cut public spending.
The Ministry of Economics has suggested abandoning planned water meter replacements as one of the measures to reduce expenditure. This move implies a halt or reconsideration of capital or operational investments related to water infrastructure metering.
Additionally, the Ministry has expressed a desire to reconsider functions connected to the Society Integration Foundation and the real estate surveying function. While specifics are not yet clear, these appear to be potential targets for efficiency improvements, budget cuts, or restructuring under the public sector reforms.
The Minister of Economic Affairs, Viktors Valainis, believes that the Society Integration Foundation's activities are unnecessary and can be saved by introducing a new system. He also suggests abolishing the Society Integration Foundation. However, Inese Kalvāne, the head of the Society Integration Foundation, has stated that they have not been informed that the foundation is redundant or performing poorly. Kalvāne emphasizes that the Society Integration Fund has a specific task and performs necessary functions.
Valainis also believes that the accusations against the Society Integration Foundation are not based on transparency issues in the organization and supervision of the foundation's work. He expresses concern about the potential politicization of decision-making if the tasks or functions of the Society Integration Foundation are transferred to the supervision of a ministry.
The Ministry of Economics will propose things to abandon in the public sector, with the aim of achieving total expected savings of €850 million. The government emphasizes that savings should not impact benefits, education for children and youth, health services, or welfare and security.
These proposals are still ongoing, with discussions taking place with various ministries and autonomous state entities, which require parliamentary approval for any changes. The Ministry of Finance has received over 250 suggestions from various ministries aimed at cost reductions across remuneration, subsidies, goods and services, and other expenditures, which could collectively reduce public sector spending by around €150 million in 2026, with cumulative savings possibly reaching €450 million over three years.
- The Ministry of Economics' proposals for public sector reforms suggest a reevaluation of the European Union's funding for the Society Integration Foundation, which may lead to budget cuts or restructuring in this area.
- In an effort to achieve the targeted €850 million in savings, the Latvian government is encouraging business growth, potentially by offering incentives to strengthen the private sector and stimulate economic activity.
- In light of Latvia's plan to integrate further with EU economic policies, the government is exploring ways of addressing the financial implications of business operations, considering possible adjustments to taxation and investment strategies in order to remain competitive within the EU market.
