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Wednesday 21.02.2018 | Name days: Eleonora, Ariadne
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Dombrovskis wants sanctions on member states with excessive budget deficits

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Baltic news, News from Latvia, BNN-NEWS.COM, BNN-NEWS.RU, Valdis Dombrovskis

Valdis Dombrovskis

Regarding the economic governance within the euro zone, there should be specific rules dictating sanctions for member states with excessive budget deficits, believes the Prime Minister of Latvia Valdis Dombrovskis.

Clear rules are important, «so that we do not face arbitrary recommendations from the [European] Commission that don’t reflect the economic reality but probably more the bargaining power of individual member states,» he the financial news agency told Dow Jones.

«On this, we would like to see as precise algorithms as possible… this has to be rules-based,» asserted the Prime Minister.

Dombrovskis explained the government aims to use less the International Monetary Fund and the European Union loan than planned before, adding that this depends on discussions about the funds allotted for stabilizing the financial sector and the fact whether interest rates remain favorable for raising funds on the domestic debt market.

The Prime Minister assured if they succeed in reducing the earmarked funds substantially, there will even be an option not to draw additional loans at all.

Dombrovskis added his government has to start considering preparing a eurobond issue, 2012 when they will have to start to repay the international loan package is approaching.

According to the last review of the loan program in the middle of last year, Latvia could potentially obtain up to a billion euro, while Riga unlocked only 400 million euro, he informed.

«If we have sufficient resources in the treasury, there is no need to take additional loans and to pay interest on them,» he said.

The residents of Latvia support the euro introduction, however the cu rent eurozone block financial crisis makes them doubt the efficiency of the necessary consolidation measures.

«Initially when we set this target, it was a relatively easy story that the troubled economy of Latvia should seek the safe haven of the euro zone,» he told, adding that this is no longer a convincing point.


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