RIGA — Prime Minister Valdis Dombrovskis has said that the current government will last until the October elections, a statement seemingly aimed at assuring both Latvians and international creditors weary of the country’s political infighting.

“The government will work until elections,” Dombrovskis told Latvian Radio Wednesday morning.

“How the upcoming election campaign will reflect on parties and the ability to compromise is another question. Many will cave into [private_supervisor]populism,” he added.

Dombrovskis’ forecast comes after a productive meeting with the Union of Greens and Farmers, whose leader expressed confidence in the prime minister, and a sudden decision to postpone a meeting with Andris Šķēle, leader of the People’s Party.

Formally, Dombrovskis had to push back the tete-a-tete with Šķēle due to a busy schedule, but there is speculation that the People’s Party’s effort to cooperate with the opposition and ram through a tax decrease, at a time when a mission from the IMF is in town, has irked the prime minister.

The People’s Party is working with the pro-business Latvia’s Way/Latvia’s First Party, led by Riga Deputy Mayor Ainars Šlesers, to approve a decrease in the value-added tax for the hospitality industry.

The finance ministry, led by Dombrovskis’ New Era, is against the move since it will deprive the budget of some 7 million lats (€10 million), revenue Latvia can ill-afford to lose.

Proponents of the tax cut argue that Latvia will ultimately benefit from cheaper hotel rooms before the upcoming tourist season, which, given the decline in manufacturing, is increasingly vital for the economy.

The tax cut is also seen as a test case for closer cooperation, possibly even a merger, between the People’s Party and Latvia’s First/Latvia’s Way, whose ratings are low and whose leaders are fighting for political survival.

Meanwhile, IMF representatives are carefully studying compliance with the agreement signed by the government. Reports indicate that excise revenues are significantly short of target — forcing Dombrovskis to call an emergency meeting with customs officials, which makes any tax cut, however sensible, very risky.

Armands Krauklis, head of the People’s Party faction in Parliament, met with IMF officials on Monday and presented the tax cut proposal for the hospitality industry. He was later quoted as saying that the officials did not object to a cut per se but hinted that singling out certain industries might not be the best policy.

The tax proposal passed the Saeima’s budgetary committee on Tuesday and will likely go to the floor next week for a final vote. [/private_supervisor] [private_subscription 1 month]populism,” he added.

Dombrovskis’ forecast comes after a productive meeting with the Union of Greens and Farmers, whose leader expressed confidence in the prime minister, and a sudden decision to postpone a meeting with Andris Šķēle, leader of the People’s Party.

Formally, Dombrovskis had to push back the tete-a-tete with Šķēle due to a busy schedule, but there is speculation that the People’s Party’s effort to cooperate with the opposition and ram through a tax decrease, at a time when a mission from the IMF is in town, has irked the prime minister.

The People’s Party is working with the pro-business Latvia’s Way/Latvia’s First Party, led by Riga Deputy Mayor Ainars Šlesers, to approve a decrease in the value-added tax for the hospitality industry.

The finance ministry, led by Dombrovskis’ New Era, is against the move since it will deprive the budget of some 7 million lats (€10 million), revenue Latvia can ill-afford to lose.

Proponents of the tax cut argue that Latvia will ultimately benefit from cheaper hotel rooms before the upcoming tourist season, which, given the decline in manufacturing, is increasingly vital for the economy.

The tax cut is also seen as a test case for closer cooperation, possibly even a merger, between the People’s Party and Latvia’s First/Latvia’s Way, whose ratings are low and whose leaders are fighting for political survival.

Meanwhile, IMF representatives are carefully studying compliance with the agreement signed by the government. Reports indicate that excise revenues are significantly short of target — forcing Dombrovskis to call an emergency meeting with customs officials, which makes any tax cut, however sensible, very risky.

Armands Krauklis, head of the People’s Party faction in Parliament, met with IMF officials on Monday and presented the tax cut proposal for the hospitality industry. He was later quoted as saying that the officials did not object to a cut per se but hinted that singling out certain industries might not be the best policy.

The tax proposal passed the Saeima’s budgetary committee on Tuesday and will likely go to the floor next week for a final vote. [/private_subscription 1 month] [private_subscription 4 months]populism,” he added.

Dombrovskis’ forecast comes after a productive meeting with the Union of Greens and Farmers, whose leader expressed confidence in the prime minister, and a sudden decision to postpone a meeting with Andris Šķēle, leader of the People’s Party.

Formally, Dombrovskis had to push back the tete-a-tete with Šķēle due to a busy schedule, but there is speculation that the People’s Party’s effort to cooperate with the opposition and ram through a tax decrease, at a time when a mission from the IMF is in town, has irked the prime minister.

The People’s Party is working with the pro-business Latvia’s Way/Latvia’s First Party, led by Riga Deputy Mayor Ainars Šlesers, to approve a decrease in the value-added tax for the hospitality industry.

The finance ministry, led by Dombrovskis’ New Era, is against the move since it will deprive the budget of some 7 million lats (€10 million), revenue Latvia can ill-afford to lose.

Proponents of the tax cut argue that Latvia will ultimately benefit from cheaper hotel rooms before the upcoming tourist season, which, given the decline in manufacturing, is increasingly vital for the economy.

The tax cut is also seen as a test case for closer cooperation, possibly even a merger, between the People’s Party and Latvia’s First/Latvia’s Way, whose ratings are low and whose leaders are fighting for political survival.

Meanwhile, IMF representatives are carefully studying compliance with the agreement signed by the government. Reports indicate that excise revenues are significantly short of target — forcing Dombrovskis to call an emergency meeting with customs officials, which makes any tax cut, however sensible, very risky.

Armands Krauklis, head of the People’s Party faction in Parliament, met with IMF officials on Monday and presented the tax cut proposal for the hospitality industry. He was later quoted as saying that the officials did not object to a cut per se but hinted that singling out certain industries might not be the best policy.

The tax proposal passed the Saeima’s budgetary committee on Tuesday and will likely go to the floor next week for a final vote. [/private_subscription 4 months] [private_subscription 1 year]populism,” he added.

Dombrovskis’ forecast comes after a productive meeting with the Union of Greens and Farmers, whose leader expressed confidence in the prime minister, and a sudden decision to postpone a meeting with Andris Šķēle, leader of the People’s Party.

Formally, Dombrovskis had to push back the tete-a-tete with Šķēle due to a busy schedule, but there is speculation that the People’s Party’s effort to cooperate with the opposition and ram through a tax decrease, at a time when a mission from the IMF is in town, has irked the prime minister.

The People’s Party is working with the pro-business Latvia’s Way/Latvia’s First Party, led by Riga Deputy Mayor Ainars Šlesers, to approve a decrease in the value-added tax for the hospitality industry.

The finance ministry, led by Dombrovskis’ New Era, is against the move since it will deprive the budget of some 7 million lats (€10 million), revenue Latvia can ill-afford to lose.

Proponents of the tax cut argue that Latvia will ultimately benefit from cheaper hotel rooms before the upcoming tourist season, which, given the decline in manufacturing, is increasingly vital for the economy.

The tax cut is also seen as a test case for closer cooperation, possibly even a merger, between the People’s Party and Latvia’s First/Latvia’s Way, whose ratings are low and whose leaders are fighting for political survival.

Meanwhile, IMF representatives are carefully studying compliance with the agreement signed by the government. Reports indicate that excise revenues are significantly short of target — forcing Dombrovskis to call an emergency meeting with customs officials, which makes any tax cut, however sensible, very risky.

Armands Krauklis, head of the People’s Party faction in Parliament, met with IMF officials on Monday and presented the tax cut proposal for the hospitality industry. He was later quoted as saying that the officials did not object to a cut per se but hinted that singling out certain industries might not be the best policy.

The tax proposal passed the Saeima’s budgetary committee on Tuesday and will likely go to the floor next week for a final vote. [/private_subscription 1 year]

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