Fiscal Discipline Council (hereinafter - the Council) is an independent collegial body established to monitor the compliance with the rules of the fiscal discipline.
The Council has the responsibility for the following:
- monitor the compliance with the Fiscal Discipline Law (hereinafter - FDL) provisions in the budget framework law and the annual state budget law during their preparation, execution, and amendment;
- verify, if the fiscal balance and the expenditure growth provisions have been properly applied, including an independent assessment of the potential GDP and nominal GDP, and the calculation of the structural balance;
- monitor the compliance with the FDL conditions with the estimated summary fiscal indicators during the execution of the annual state budget law, the consolidated local government budget, and derived public person budgets;
- prepare opinion regarding the major departures from the balance condition permitted during a severe economic downturn;
- prepare an opinion on the fiscal safety reserve to counter the prevailing fiscal risks for the state;
- prepare a monitoring report for fiscal discipline and, if necessary, an irregularity report;
- prepare and submit to the Saeima and the Cabinet of Ministers opinions regarding issues of fiscal policy and macro-economic development, as necessary to ensure the compliance with the FDL;
- prepare the reports stipulated by FDL to assess and analyze the fiscal policy sustainability of the country.
Last modified : 20 November 2014
On 1 June 2016 the Fiscal discipline council, in cooperation with the Representation of the European Commission in Latvia, organised an international conference The Fiscal discipline law: The first three years and future prospects. The purpose of this conference was to improve public understanding of budget discipline by holding a public discussion before the Government commenced work on the 2017 state budget. Below is a video summary of the conference and the main issues discussed at the event.
During the meeting that took place on 2 September 2016, the Fiscal Discipline Council discussed the budget planning process, the changes in the macroeconomic environment as a result of the referendum to leave the European Union held in the United Kingdom on 23 June, and the impact of the result on the macro-fiscal environment in Latvia.
On 29 July 2016 the Ministry of Finance and the Fiscal discipline council updated the Memorandum of Understanding by adding more precise version about the obligations regarding the Fiscal discipline council recommendations (so called comply or explain principle), as well as with the assessment of deviations in accordance with the Fiscal discipline law.
On 2 August 2016, the Cabinet of Ministers approved the establishment of the Fiscal security reserve for the medium-term budget framework period (2017-2019). The Fiscal security reserve will be established in the amount of 0.1% of GDP, which is the minimum amount permitted by the Fiscal discipline law.
Fiscal Council will not approve next year budget without fiscal safety reserve. Interview with the Fiscal Council chairman Jānis Platais. More information available in Latvian at financenet.lv portal.