RIGA, Jan. 11 (Xinhua) -- Realizing that Latvia's budget might be too small to finance all initiatives coalition partners want to include into the new government's action plan, prime minister designate Krisjanis Karins has proposed a fiscal prudence pact to prevent the country from living beyond its means.
"All policies will have to be confined to the budget framework...based on the planned economic growth," Karins told reporters at a press briefing on Friday.
The European Commission expects Latvia to keep its budget deficit at 1 percent of GDP in 2019, and Karins wants to make sure the ministers' initiatives do not exceed this mark. Karins said he would be pleased about a budget deficit of 0.8 percent or 0.9 percent of GDP, but that he would not press his ministers to achieve this target.
The prime minister designate also promised not to allow any tax hikes this year to provide money for his ministers' plans.
On Friday, Karins met with ministerial candidates to discuss the blueprint of the government's action plan and named three tasks that have been agreed already.
First of all, it is necessary to deal with all money laundering and terrorist financing risks in the financial sector to prevent Latvia's inclusion in the so-called "grey list" of the Council of Europe's Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (Moneyval).
Secondly, a territorial reform aimed at reducing the number of municipalities have to be carried out by Latvia's next local elections.
And thirdly, the Karins-led government would not back a mandatory quota system for the relocation of migrants within the European Union.
Karins is currently forming Latvia's next coalition government, which, apart from his center-right New Unity, is also expected to include the New Conservative Party, KPV LV, the right-wing National Alliance and the liberal alliance For Development/For.