Kulbergs ends first talks round as Šlesers backs unpopular reforms

Latvian Prime Minister Andris Kulbergs has completed the first round of talks on forming a government, but no agreement has been reached on its composition, LSM reported. Kulbergs met representatives of the Latvia First party on Monday, and both sides agreed on the need to cut state spending and boost economic growth.

Party leader Ainārs Šlesers described Latvia’s financial situation as a sinking Titanic and pledged to support unpopular reforms. He did not directly say whether his party would support a government in which it was not represented.

Kulbergs said funding would be insufficient next year to meet commitments already made to the public and international partners. He called for substantial budget cuts, a long-term review of the number of ministries and their responsibilities, and delays to some planned initiatives until funding is available.

Both sides also agreed that spending cuts alone would not be enough, and that investment and economic activity must increase. Kulbergs said Latvia would receive less European Union funding during the transition between multiannual budgets, and proposed offsetting the shortfall with private investment and more active bank lending.

The talks also covered creating a Latvia Development Fund to bring state-owned companies under the management of a single investment fund. Kulbergs said the two sides shared a view on the need for more professional management of state assets, as well as centralised procurement and greater use of technology.