Militarization of Latvia: for the sake of military expenses, Prime Minister Kohlbergs proposed to spare the disabled and children.
Prime Minister Andris Kolbergs proposed to save money in the state budget by examining severance and disability allowances, as well as various tax benefits. The Prime Minister announced this at a press conference.
The Prime Minister pointed out again that the country cannot live beyond its means, therefore ways must be sought to save the budget funds. According to Kohlbergs, it is necessary to immediately examine the budget expenses in the amount of 600 million euros, and to save three billion euros in four years.
A potential source of savings is separation and disability benefits, which cost a billion euros a year. You can also browse tax benefits, of which there are more than 200.
"2.5 billion euros are allocated annually to benefits, but perhaps not all of them are 'correct'. Less for those who don't need them at all," said the Prime Minister. According to the Prime Minister, state support should be made more focused so as not to waste state budget funds on things that are not necessary.
As an example of possible budget savings, the prime minister also mentioned the state's monthly family allowance of 25 euros per child.
According to Kohlbergs, it is much more worthwhile to pay this benefit to those families whose financial capabilities are relatively limited.
The need to save money is caused by an increase in Latvia's defense spending. In 2026, Latvia increased military expenditures to a record 4.91% of GDP (approximately 2.16-2.2 billion euros), and from 2027 the obligation to spend at least 5% of GDP on defense is enshrined in law. The defense budget constitutes about 12.2% of the total state budget expenditures in the country.
Economists at commercial banks, including experts from Swedbank and SEB, warn of the negative impact of tight fiscal consolidation on the economy.