At the beginning of the year Latvian President Raimonds Vejonis entrusted the formation of the Cabinet of Ministers to Maris Kucinskis. The Saeima approved his government on 11 February. It was clear from the formation process that the government would not have an easy time, as reported by Nekā personīga programme of TV3.
«What is most paradoxical in this situation is that discussions were being held for years about different reforms in education, healthcare, economy and other areas, but no decisions were being made. It means the executive power lacked political will or the freedom to make brave and important decisions. As a result – we were delayed. We were delayed as a country. We got stuck in bureaucratic nuisances and the desire to please everyone,» – Kucinskis said at the 11 February Saeima meeting before the vote.
Kucinskis’ government is best described with the word boredom. Only some ministers stand out in the grey background: chess player Dana Reizniece-Ozola, probability theory specialist Karlis Sadurskis and spare time photographer Dzintars Rasnacs.
It was only possible to make Unity’s education reform active through countless trials and scandals. The healthcare reform governed by the party of the prime minister, meanwhile, is at a standstill. Guntis Belevics left the government at the beginning of summer. He left because of the scandal involving him receiving medical services outside of the proper waiting and paying order. He later lied about the whole story. Healthcare sector, meanwhile, is looking for a way out to resolve the most important matters troubling it – where to find at least EUR 700 million and how to make the system more effective. Efficiency also means narrowing down service accessibility and closure of small hospitals. Kucinskis’ government seems unable to resist municipalities’ lobby efforts. Reform has not even begun and certain regional hospitals are already promised immunity. Health is a priority in words alone, as the government is unable to allocate even a few additional millions, even if lives are at stake.
Finance Minister Dana Reizniece-Ozola is also a source of worries for the prime minister. Shortly after taking office she began a witch hunt in the State Revenue Service by creating secret lists of dishonest workers. SRS Director General Inara Petersone could not fight back and decided to step down. According to her, Kucinskis should have stepped in and stopped the destruction of SRS’ authority.
Not a single worthwhile candidate applied to replace Petersone. Because of that, Reizniece-Ozola decided to propose the director of the State Environmental Service Inga Kolegova without announcing a candidate selection process. As it turned out, Kolegova had problems with her income declaration. UGF with Kucinskis at the helm tried blaming Unity for shooting down Kolegova, but they did too much in the end – Kolegova withdrew on her own. She remains the head of SES. Meanwhile, Finance Police continues looking into her declaration.
The State Chancellery announced a new candidate selection process. This time the government decided to tempt potential candidates with promises of a larger wage. SRS is now the responsibility of Ilze Cirule. She now has to decide on lying off several hundred employees to find money for the wage reform. Other problematic matters include the merging of Finance and Customs Police offices and their mutual differences.
The situation is even worse with the search for the new head of the Corruption Prevention Combating Bureau. The selection process failed because none of the ten contenders made it to the second stage. This includes Yaroslav Strelchenok, the current head of KNAB. Kucinskis was shocked with such an outcome and ordered authorities to review the order of approval of the head of KNAB. That never happened. Instead it was decided to reduce requirements for potential candidates.
On 1 December, Maris Kucinskis sorrowfully admitted that uncertainty is the most often used criticism in relation to the country’s economy. Six days later he singlehandedly caused chaos in taxes.
Changes to the Social Tax approved one year ago are expected to come into force 1 January. These changes state that all employed people will have to pay social tax from their salary. This includes part-time workers, micro-enterprise workers and farm workers. Only at the end of the year did politicians finally understand that this change would impact a wide range of people. Micro-enterprises will lose their attractiveness and will be likely forced to lay off employees and go bankrupt.
Aija Barca’s led Social and Employment Matters Committee rushed to create a list of people who will be able to work without paying full social tax. The list turned out so large it was impossible to realize.
This week, Maris Kucinskis unexpectedly announced that the law would not come into force. Next year’s expected problems are bigger than the chaos such a decision has already caused. He blames SRS for not preparing for changes and Laimdota Straujuma’s government for not considering the consequences of this decision.
The biggest problem of this government is the decline of the rate of economic development, which could potentially lead to a crisis. Kucinskis promises growth close to 4-5% in the next couple of years. Unfortunately, nothing really points to such a scenario. GDP growth outlook has dropped to 1% this year. Next year, when an inflow of EU funds is expected in Latvia, GDP will grow by a mere 3%, Bank of Latvia predicts.
In addition, the government cannot hold back the appetite of members of its political parties. The Saeima has allocated more than EUR 20 million of budget funds for different projects seemingly unrelated to the state budget, the programme reports.