Latvian PM admits country will have to borrow money to support residents during energy crisis – Baltic News Network

The Latvian government will probably have to borrow funds in order to offer support activities to residents to overcome the energy crisis, Prime Minister Krišjānis Kariņš said in his interview with LTV program Rīta panorāma on Wednesday September 14.

The politician pointed out that the government had already approved a large package of support measures. However, this may not be enough and some form of price cap may be set. Beyond this cap, residents’ payments for energy resources will not increase. Instead, the additional costs will be covered by the state budget.

According to the Prime Minister, the government is awaiting estimates from the Ministry of Economy in order to implement the caps appropriately.

According to Kariņš, while funding for support measures is taken from the budget surplus, funding for broader support will have to be borrowed.

The Prime Minister explains the favorable budgetary situation with strong exports. The Ministry of Finance, meanwhile, admits that budget revenues are benefiting from the rapid growth of inflation.

Kariņš mentioned that the country’s debt has fallen to 43% of GDP. This provides some leeway for the government to borrow money.

Although the support measures will be extended, it will not be possible to liquidate all the consequences of the Russian war with a single government decision, Kariņš said.

When asked to explain if Latvia has enough gas to survive the winter, Kariņš replied that yes, there is enough gas.

According to him, the total volume of gas that Latvia needs to get through the winter season is estimated at 6.9 TWh. He said the volume of gas currently stored in the Inčukalns gas storage facility exceeds 7 TWh. Kariņš also said that Latvia continues to procure gas.

The problem is the price of gas, not the availability of gas, claimed Kariņš.

As for Latvijas gāze, which claims that there is not enough gas to meet residents’ needs because part of the gas stores have been sold to other users, the Prime Minister said that Latvijas gāze has the duty to supply mainly gas to residents.

Read more about this topic: Authorities to investigate Latvijas gāze’s decisions regarding the creation of gas reserves

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