OREANDA-NEWS. On June 30, 2009 the Cabinet of Ministers made a decision to draft a law on fiscal discipline. As stressed by Valdis Dombrovskis, Prime Minister of the Republic of Latvia: “the current economic situation in our country and Latvia’s political environment characterised by short-term and fragmented coalitions, make additional “pressures” on the Government in the period of various upcoming elections, thus increasing additional budgetary expenditures. Therefore, in order to ensure country’s ability to avoid similar problems in the future, the law should clearly stipulate both the amount of budget deficit and the respective amount of expenditures”, reported the Official website mk.gov.lv.

The Government assigned the Ministry of Finance in cooperation with the Ministry of Regional Development and Local Governments, the Ministry of Justice and the State Chancellery to draft a law on fiscal discipline. The draft law should be prepared by 15 December 2009.

The Prime Minister noted that such draft law is needed for ensuring transfer of good practice in the area of fiscal discipline and economic growth by determining the most important structural elements – creation of a balanced budget at all levels, allocation of revenue increase, competence of involved institutions, responsibility of budgetary institutions, provision on providing information about budget expenditures and public involvement.

The law should define competence of the Saeima (Parliament), other institutions, and local governments, in order to ensure enforcement of fiscal discipline at all levels of public administration.