Fiscal Discipline Council

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.

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Last modified : 20 November 2014

News

According to Article 28 Part 7 of the Fiscal Discipline Law, the Fiscal Discipline Council shall prepare and submit to the Saeima and the Cabinet's attention of fiscal policy matters, where it finds them important to comply with the Fiscal Discipline Law terms.

In the final meeting of 2016 the Council met with representatives from several Ministry of Finance’s departments: Fiscal policy department, Economic analysis department and Tax analysis department. In addition, the Council discussed the Ministry of Finance’s reply to the irregularity report issued by the Council.

This new section "Knowledge" contains educational materials for public use. The Latvian version also contains two surveys (one on fiscal discipline for students) and one on tax morale, and a presentation that can be used as teaching material for high-school students.

As a result of the most recent financial crisis, government debt levels increased dramatically in Latvia and the European Union more generally. The Fiscal Discipline Law stipulates that government debt should not exceed 60% of GDP. This is one of the four fiscal rules that have to be observed when planning and executing the state budget.

According to Part 1, Section 28 of the Fiscal discipline law, the Fiscal discipline council shall monitor whether the medium term budget framework law and the annual state budget law are prepared and implemented in compliance with the fiscal rules stipulated in the Fiscal discipline law.

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