Valka agrees to begin financial stabilisation process

Valka municipality has agreed to begin a financial stabilisation process, which will place its work under Finance Ministry oversight, LSM reports. The council is expected to decide on starting the process after acknowledging it cannot resolve the situation on its own.

The Finance Ministry has described the situation in Valka as a financial crisis and an emergency. The municipality has 400,000 euros in overdue payments, while its total debt amounts to several tens of millions of euros, the ministry says.

Valka Mayor Vents Armands Krauklis says insufficient state funding is the main cause of the problems. He has also acknowledged that budget cuts will require the municipality to eliminate several jobs.

The council had previously opposed entering financial stabilisation, which involves state oversight. Krauklis said the municipality would seek a loan to clear its debts by the end of the year, adding that next year’s budget was likely to begin as a technical budget and that Valka might have to approach the government for help again.

Residents and opposition councillors have criticised the municipality’s borrowing. Iveta Markova, an opposition councillor who worked as a municipal finance specialist for 15 years, said liabilities had reached 30 million euros and the municipality was unable to repay its loans.