RIGA — Latvia’s Minister of Finance Einars Repše has reacted coolly to the World Bank’s tough recommendations for the 2011 budget by calling on the Latvia’s political and social leaders to draft alternative proposals.

While not criticizing the World Bank’s recommendations outright, Repše on Thursday appealed to all ministries, political parties, business organizations and so-called social partners to “offer the appraisal of the World Bank proposals” and to [private_supervisor]“prepare high-quality, well-considered draft proposals” for next year’s budget.

On Wednesday a group of World Bank analysts, after having spent several days in Latvia studying the situation, drafted a number of seemingly harsh recommendations for trimming next year’s budget expenditures. Proposed measures include lowering the non-taxable minimum for pensions, slashing the number of bureaucrats, and cutting financial aid to university students.

If implemented, World Bank analysts claim the recommendations would help consolidate the 2011 budget some 500 million lats (€700 million) — the amount Latvia needs to save next year in order to comply with international lenders’ demands.

Speculation about the 2011 budget is particularly acute given that there are elections in October, and for several months Latvia’s political elite will ostensibly be too busy slinging dirt at one another to worry about drafting the most important legislation of the year.

Therefore the president, the central bank chief, and even the opposition are calling on the minority government to speed up preparation on the budget.

For his part, Prime Minister Valdis Dombrovskis said Wednesday that the World Bank recommendations need to be taken with caution and that, while Latvia cannot refuse to cut next year’s budget deficit, the government also needed to be mindful of how to reinvigorate the country’s moribund economy.

The World Bank has pledged €400 million of the €7.5 billion bailout package agreed upon with international lenders in Dec. 2008. The first half of the World Bank loan, approved last September is aimed at strengthening the banking sector, while the second will help “protect vulnerable groups during the economic contraction through the government’s social safety net program, and in the medium term, lay the foundation for structural reforms in the social sectors and public administration,” according to the bank’s website. [/private_supervisor] [private_subscription 1 month]“prepare high-quality, well-considered draft proposals” for next year’s budget.

On Wednesday a group of World Bank analysts, after having spent several days in Latvia studying the situation, drafted a number of seemingly harsh recommendations for trimming next year’s budget expenditures. Proposed measures include lowering the non-taxable minimum for pensions, slashing the number of bureaucrats, and cutting financial aid to university students.

If implemented, World Bank analysts claim the recommendations would help consolidate the 2011 budget some 500 million lats (€700 million) — the amount Latvia needs to save next year in order to comply with international lenders’ demands.

Speculation about the 2011 budget is particularly acute given that there are elections in October, and for several months Latvia’s political elite will ostensibly be too busy slinging dirt at one another to worry about drafting the most important legislation of the year.

Therefore the president, the central bank chief, and even the opposition are calling on the minority government to speed up preparation on the budget.

For his part, Prime Minister Valdis Dombrovskis said Wednesday that the World Bank recommendations need to be taken with caution and that, while Latvia cannot refuse to cut next year’s budget deficit, the government also needed to be mindful of how to reinvigorate the country’s moribund economy.

The World Bank has pledged €400 million of the €7.5 billion bailout package agreed upon with international lenders in Dec. 2008. The first half of the World Bank loan, approved last September is aimed at strengthening the banking sector, while the second will help “protect vulnerable groups during the economic contraction through the government’s social safety net program, and in the medium term, lay the foundation for structural reforms in the social sectors and public administration,” according to the bank’s website. [/private_subscription 1 month] [private_subscription 4 months]“prepare high-quality, well-considered draft proposals” for next year’s budget.

On Wednesday a group of World Bank analysts, after having spent several days in Latvia studying the situation, drafted a number of seemingly harsh recommendations for trimming next year’s budget expenditures. Proposed measures include lowering the non-taxable minimum for pensions, slashing the number of bureaucrats, and cutting financial aid to university students.

If implemented, World Bank analysts claim the recommendations would help consolidate the 2011 budget some 500 million lats (€700 million) — the amount Latvia needs to save next year in order to comply with international lenders’ demands.

Speculation about the 2011 budget is particularly acute given that there are elections in October, and for several months Latvia’s political elite will ostensibly be too busy slinging dirt at one another to worry about drafting the most important legislation of the year.

Therefore the president, the central bank chief, and even the opposition are calling on the minority government to speed up preparation on the budget.

For his part, Prime Minister Valdis Dombrovskis said Wednesday that the World Bank recommendations need to be taken with caution and that, while Latvia cannot refuse to cut next year’s budget deficit, the government also needed to be mindful of how to reinvigorate the country’s moribund economy.

The World Bank has pledged €400 million of the €7.5 billion bailout package agreed upon with international lenders in Dec. 2008. The first half of the World Bank loan, approved last September is aimed at strengthening the banking sector, while the second will help “protect vulnerable groups during the economic contraction through the government’s social safety net program, and in the medium term, lay the foundation for structural reforms in the social sectors and public administration,” according to the bank’s website. [/private_subscription 4 months] [private_subscription 1 year]“prepare high-quality, well-considered draft proposals” for next year’s budget.

On Wednesday a group of World Bank analysts, after having spent several days in Latvia studying the situation, drafted a number of seemingly harsh recommendations for trimming next year’s budget expenditures. Proposed measures include lowering the non-taxable minimum for pensions, slashing the number of bureaucrats, and cutting financial aid to university students.

If implemented, World Bank analysts claim the recommendations would help consolidate the 2011 budget some 500 million lats (€700 million) — the amount Latvia needs to save next year in order to comply with international lenders’ demands.

Speculation about the 2011 budget is particularly acute given that there are elections in October, and for several months Latvia’s political elite will ostensibly be too busy slinging dirt at one another to worry about drafting the most important legislation of the year.

Therefore the president, the central bank chief, and even the opposition are calling on the minority government to speed up preparation on the budget.

For his part, Prime Minister Valdis Dombrovskis said Wednesday that the World Bank recommendations need to be taken with caution and that, while Latvia cannot refuse to cut next year’s budget deficit, the government also needed to be mindful of how to reinvigorate the country’s moribund economy.

The World Bank has pledged €400 million of the €7.5 billion bailout package agreed upon with international lenders in Dec. 2008. The first half of the World Bank loan, approved last September is aimed at strengthening the banking sector, while the second will help “protect vulnerable groups during the economic contraction through the government’s social safety net program, and in the medium term, lay the foundation for structural reforms in the social sectors and public administration,” according to the bank’s website. [/private_subscription 1 year]

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