Latvia could up budget deficit to aid healthcare reform

The 2017 budget deficit could be raised to one percent to help finance reforms in the healthcare sector, Finance Minister Dana Reizniece-Ozola (Greens/Farmers) told LETA Tuesday.

According to the minister, an additional EUR 9 million could be available next year for new initiatives, which, taking into account the necessity to finance reforms in both the healthcare and education sectors, is too little.

Latvia will request a green light from the European Commission to increase the budget deficit in order to carry out structural reforms in the healthcare sector, which the minister believes will benefit the whole Latvian economy.

''We hope that the European Commission will allow us to raise the budget deficit so that we could help finance the healthcare system with an additional EUR 44 million. Next year's budget deficit is planned at 0.9 percent, but if the EC okays we will raise the budget deficit to one percent,'' the finance minister said.

While the Fiscal Discipline Council Wednesday issued a warning about budget deficit growth as there's risk of running out of reserves during an economic downturn. 

The council told the press that Latvia is currently seeing "good years" as the country has one of the fastest growth rates in the EU. In such a time, "a country has to make reserves, not live on the future generations' money."

The council asked to cut next year's budget expenses by €35m, by €116 in 2018 and €106m in 2019. 

Latvia's Fiscal Discipline Council is an independent institution that oversees compliance with the rules of fiscal discipline.

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