OREANDA-NEWS. On July 12, 2007 Minister of Finance Oskars Spurdzins and European Union (EU) Commissioner for Economic and Monetary Affairs had a business lunch and discussed national economy development prospective of Latvia. Officials of Ministry of Finance and Ministry of Economics, as well as European Commission representatives were also involved in the discussion, reported the press-centre of Ministry of Finance of Latvia.

At the beginning of the meeting O.Spurdzins informed the Commissioner about the current situation in the economy of Latvia; underlining the fact that now the government of Latvia faces a difficult task – to cool down the overheated economy without interference to the speed of economic development. The Minister of Finance admitted that people in Latvia want to leave better, which explains the high demand for loans or travelling abroad to gain profit to help their families in Latvia, thus increasing the amount of money flowing back to Latvia.   

The Commissioner J.Almunia admitted that although the Baltic States, Bulgaria, Romania and Slovakia have set a clear goal to join the euro area in the coming years, at the moment it is not an easy task. To reach the goal governments of these states shall be able to stabilize the development of their national economy – they have to decrease the inflation, achieve sustainable and stable growth of GDP. He stressed that the economical situation in the new EU member states will be monitored by the International Monetary Fund, international rating agencies, as well as banks and investors. J.Alminua underlined that he is not so much concerned about the speed at which each of these member states will come closer to the euro area, but more about their ability to increase the economic stability and decrease potential risks to their economic development.    
      
As the main problems of Latvia EU Commissioner mentioned the high increase in wages which is incommensurable with the productivity, high level of inflation and too high increase in loans. He also expressed concerns about the alarming increase in energy resource consumption. J.Almunia encouraged O.Spurdzns to implement more stringent fiscal policy to end the year with a surplus budget, rather than a balanced budget, thus decreasing the internal demand.   
    
O.Spurdzins, in turn, stressed the importance of the Anti-Inflation Plan which is developed and partly implemented by the government to stabilize the economy. He also assumed that in case of successful implementation of the Plan the level of inflation could be decreased by 1,5-2% each year, thus enabling Latvia to comply with all the Maastricht criteria, including inflation, in 2011 and thus creating basis for joining the euro area. Also O.Spurdzins mentioned other important problems, such as insufficient competition among retailers, rapid increase in wages and insufficient development of production, especially, regarding goods with a high added value.        

As a guarantee for a qualitative planning and stabilization of economy the Minister of Finance mentioned the fact that from the next year for the first time Latvia will implement a medium-term budget for the next 3 years instead of a one year budget as it was before. O.Spurdzins stressed that the year 2007 could be decisive for stabilization of the economy and prevention of inflation, although the results of work in this field could be visible only at the end of this year or at the beginning of the next year.