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Dear people of Latvia,
Members of the Saeima,
Colleagues,
Participants of the sitting,
I believe that today we have a fairly important occasion to remind each of us about the fundamental values of the Latvian State - the national independence, democracy and Latvian identity. Yet, it is as important reason to remind the politicians about their responsibility for preserving those values. For the first time in the history of the independent Latvia we are forced to decide on severe economy measures in order to prevent the bankruptcy of the country.
Immature national macroeconomic policies which resulted into the overheating of our economy. Belated introduction of anti-inflation measures. Treatment of speculative transactions as non-taxable. Belated adoption of measures for imposing credit limits. Unbalanced development of the country that has increased the macroeconomic risks and intensified the impacts of global financial crisis.
Those are not only the unaccomplished tasks of the former governments; they represent causes for the overheating of the Latvian economy, the mistakes of the coalition and the opposition and the responsibility of the 9th Saeima to its electors.
Rapidly increasing unemployment, minimized business activity, loss of export competitiveness, lowered national credit rating, limited loan opportunities in the international finance market. The only possibility for financing the state budget is the loan granted by the European Commission, the International Monetary Fund and several European Union countries.
Fiscal stabilisation measures in the framework of the international loan are very sore. However, unlike other countries which during this period of global obscurity have no certainty about how to attract additional financial resources, Latvia has been given the opportunity, as presented by this loan, to plan its development several years in advance. If we manage to stabilise the state budget, we will receive further financing for covering state expenditures.
Concerns about the actual financial independence of the country may be resolved only by well-coordinated and efficient utilisation of loan resources, continuing the limitation of budgetary expenditure. That will enable us to overcome the crisis with maintaining the foundation of our economic and social system, enhancing the democracy and improving the efficiency of public administration.
Dear Members of Parliament,
I would like to pay my compliments to the State President for his confidence to form government during those difficult times. This is not favourable time for earning short-lived popularity or trying to dodge and put the difficult decision-making responsibility on somebody else's shoulders.
Politicians’ responsibility since the events of “Umbrella Revolution” has been an issue of particular importance. It is frequently stressed by both the opposition and coalition of the Saeima, the State President and our electors. In the current discussions about how to measure the politicians’ responsibility, one should not look far for the answer – the consistent implementation of the memorandum of urgent tasks for ensuring state’s solvency.
Now, we have reached an agreement with coalition partners on the following urgent tasks:
1. Reduction of budget deficit, meeting the requirements of the international creditors and;
2. Recovery of the economy, prompt and strategic support to the competitive and perspective businesses;
3. Ensuring support to the disadvantaged, and preventing the unemployment growth;
4. Cooperation with the social partners and provision of precise information about the decisions made;
5. Compliance to regulations set forth by the State President and adoption of amendments to the Satversme in the Saeima, thus providing the people of Latvia with rights to dissolve the Saeima if the public confidence in it has been lost.
Dear participants of the sitting,
Within the crisis situation it is important to ensure quick and professional decision-making. That can be achieved by involving the best specialists in their field; therefore an advisory council of experts will constitute a significant addition to the team of my government. Its objective will comprise provision of assistance to the Government in finding the best solutions for the recovery of our economy.
I would like to express my gratitude to everyone who has already involved in selfless work towards overcoming the crisis. Thanks also to those who have presented their recommendations to the declaration and urgent tasks of the Government. And finally I would also like to express appreciation to all those who have sent proposals for optimisation of resources in the public administration.
Dear colleagues,
From the previous Government I have inherited not only a difficult state budgetary situation, but also several good works that I will definitely continue carrying out. Here, for instance, I would like to mention the business support programme which was developed by the Government of Ivars Godmanis and which I am resolved to immediately introduce.
At the moment, we most acutely face the impacts of the economic crisis in Latvia, yet I must admit that practically it is a system crisis and its prevention requires fundamentally deeper approach. The state support should be provided simultaneously to three blocks. For dealing with social issues, ensuring state support to the disadvantaged. For overcoming the financial crisis – which requires support to the banking system. For supporting businesses and reviving the economic activity.
Concerning the support to businesses, I should stresses the main three aspects – the state guarantees to companies with export capacities, allocation of additional resources to the European Union funds and increasing their absorption, reduction of administrative burden. Important criteria for granting support to businesses will be the preservation of existing and creation of new ones. We need to develop the national programmes for energy and heating of residential buildings, which will equally allow us to reduce the dependency on imported energy and considerably economise the resources.
We should make full use of the advantages that have already been frequently mentioned before – geographic location, the status of a Member State in the European Union and the NATO, as well as the exit to the markets of Russia and CIS.
Dear Members of Parliament,
Unfortunately, the new Government has also come into a great lack of public confidence towards the state authority. That poses significant strain to the Government's capacity to act in the crisis conditions. The public confidence may be regained only by a hard and honest work. The objective of the new Government will be to take unpopular decisions and assure the society that those decisions are well needed. We will give honest information about the situation in the country, assume the responsibility for the forecasts and ensure results of our work.
In addition to the Government’s activities in dealing with economic issues, a significant attention will be paid to combating corruption and strengthening the rule of law. I would like to stress – "New Era" Party will also further stand up for an honest public administration and will deal with combating the corruption plague.
Work of the Corruption Prevention and Combating Bureau should be continued. It is necessary to guarantee independence of the law enforcement agencies. Recommendations of the State Audit should be implemented in order to ensure more efficient allocation and use of the state budget resources. Public procurement procedure should be open in order to ensure transparency for every Latvian lat spent. Our task is not just to ensure survival of the country at this moment but to change the current legal and political environment.
International lenders and other countries closely follow every Latvia’s move in order to find the right formula for actions during the current global economy downturn.
Responsibility of the Latvian Government reaches far beyond Latvia’s borders; this is responsibility for the impacts of the crisis on the Baltic Sea region. For instance, Latvia’s inability to overcome the downturn of the economy would threaten other Baltic States and even Sweden which by now has been a very strong economy. If we take the optimistic scenario, Latvia could become the first success story based on a painful experience of how to correct mistakes in the macro-economic development process and how to cope with a considerable budget deficit during a global financial crisis.
First five years of the EU membership brought Latvia unparalleled growth of its economy and considerably improved the living standard for thousands of Latvian families. The EU membership has ensured inflow of many billions of euros into the Latvian economy.
Unfortunately, when Latvia showed very rapid growth, the Latvian Government did not ensure a budget reserve, did not limit inflation and salary raise. Therefore, now we are forced to borrow considerable amount of funding from the European Commission and other partners. In view of the current situation in the financial sector I would like to once again point out to the advantages of Latvia’s EU membership.
Due to a number of substantial mistakes Latvia cannot promptly introduce the euro but our accession to the euro zone should be achieved as soon as possible. The single EU currency would become an important guarantee for successful overcoming of the crisis and would be a stable base for the recovery of the Latvian economy.
Nevertheless, I am optimistic about Latvia’s opportunities to recover its economy, however, support, advice and joint work of the whole society and the business sector is required.
Honourable participants of the Saeima sitting,
Latvia faces hard times. But our country has seen many crises before this one. And we have managed to overcome all of them. This time the necessary pre-conditions remain the same – political stability, sound economic policies and the capacity to implement the decisions adopted.
Political stability depends on public trust, ability of the Parliament to comply with the requirements set forth by the President of the State and on parliamentary support to the urgent measures in order to ensure the solvency of the country.
Coherent implementation of the decisions adopted directly depends on commitment of the coalition partners and their responsibility for the situation in Latvia, on whether our politicians are far-sighted enough and on performance of every member of the Government.
Honourable MPs,
Your votes for the Government and its tasks will also be a decision on how we will overcome the escalating economic and political crisis.
You are informed about my proposals concerning the actions in the current situation – the strategy, urgent tasks, Government’s team and work principles.
I invite you to vote for this Government and its tasks.
Thank you!
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