OREANDA-NEWS  On 10 June was announced, that the Latvian Government meeting with participation of State President Valdis Zatlers, social and coalition partners took place, during which an agreement was reached on the 2009 budget amendments for the second reading, according to an agreement by all parties on additional reduction of budget in the amount of 500 million lats, and on middle-term changes in the State budget. Another agreement reached today was on creation of a government-level crisis working group with an involvement of social partners; the objective of the working group will be revision of ministries’ budgets, thus, by the extraordinary sitting of the Government, finding suggestions for reduction of state expenditures.

In a press conference, Valdis Dombrovskis, Prime Minister of the Republic of Latvia, informed about the results of the meeting:

“Dear representatives of mass media, today we together with social partners continued a discussion, which we engaged into during yesterday's meeting, on measures for ensuring country’s solvency and on ways how to gain, in the middle-term, the budget deficit of 3%. During the meeting, we reached agreement on several important issues. Firstly, the Government and social partners agreed on additional reduction of the 2009 budget by 500 million lats. Secondly, we had a broad discussion about the untaxed minimum, and during the meeting we agreed that in Latvia we conceptually move towards the introduction of a progressive income tax which is planned to be accomplished by 2010. This year, the untaxed minimum is reduced to 45 lats and an additional rate is introduced on population with high incomes. – The Ministry of Finance will prepare concrete proposals by Thursday's extraordinary sitting of the Government. The third topical issue concerned the social budget. We agreed that by the Thursday's sitting of the Government the Ministry of Welfare together with the Pensioners' Federation will also prepare proposals on how to reduce the social budget by 35 million lats. I can already say that information about reduction of pensions by 15% is not true. The fourth issue dealt with continued state co-financing in the acquisition of the European Union funds as it remains as the most essential instrument for revival of the economic growth. Of course, many accorded decisions were made, for instance, on reduction of minimum wage from 180 to 140 lats, on additional reduction of salaries of public administration employees by 120 million lats, which is from 320 million lats allocated for this purpose in the other half-year.”