International Monetary Fund (IMF) put the new Latvian harsh conditions further credit, told the Prime Minister Valdis Dombrovskis broadcast Latvian radio.
Negotiations with creditors complex, the conditions that the IMF has also quite heavy, - said Prime.
We continue to negotiate on what is, after all, are the conditions the IMF. We have agreed to terms with the European Commission, and signed an additional memorandum conciliation. If the IMF agrees to the same conditions as the EC, the case can move forward - he said.
According to him, the IMF has no objections to the conditions on which Latvia has agreed with the EC, but the fund raises new and quite difficult conditions.
Installing IMF - at the very sharp reduction in fiscal deficit, and this is actually the main criterion, which looks at the IMF. To achieve this, of course, made by different conditions and it is on these conditions, we have talks, - said Prime in Wednesday in the transfer of 900 seconds TV channel LNT.
He said that currently preparing a letter to the IMF, which will set out conditions for reducing the budget deficit and measures for its reduction.
B. Dombrovskis said that the fund was still insists on raising rates in 2010, the value added tax (VAT).
The newly updated by the IMF a possible increase of the VAT rate. We have already seen that the previous increase of the VAT rate from 18% to 21% of the expected effect has not, so it is a question of negotiations, - said Prime.
As previously reported, the Ministry of Finance of Latvia invited the Government to raise VAT from 21% to 23% and to introduce a progressive income tax on the population, but the Government has waived such measures. According to the Ministry of Finance, under-plan for the collection of taxes in the first half amounted to 156.4 million lats, including the VAT collected on 20.9% lower than plan.
Latvia signed an agreement with international lenders to increase the VAT rate to 23% when Latvia otherwise would not be able to increase revenues and reduce budget costs.
B. Dombrovskis stressed that the absence of an agreement with the IMF would hinder further negotiations with other international lenders.
On the fiscal point of view, we can live without the IMF funds. But on the other hand, it is clear that an international loan package, which form the several creditors, including the expected payment of the regular World Bank. Many of them (s - IF) look at the position of the IMF, - he said.
Joint IMF mission and the European Commission on 13 July started in Latvia. During the visit, discussed the allocation of the country the second tranche of the IMF loan of 200 million euros.
Latvia at the end of 2008, negotiated with international lenders to provide it to the loan in the amount of 7.5 billion euro (including the IMF - 1.7 billion euros) on the basis of Latvia's economic stabilization program, which provides, inter alia, a significant reduction budget deficit. In late December 2008, the IMF singled out Latvia, the first tranche of loan for 590 million euros, the EC in the first quarter of 2009 has provided 1 billion euros.
European Commission on 2 July announced the allocation of Latvia, the next tranche of international loans in the amount of 1.2 billion euros. This was preceded by an amendment to the state budget-2009 to reduce the deficit to 500 million lats. It was expected that funding will come at the end of July.
IMF has not yet provided an assessment of budget amendments, on which depends whether Latvia next tranche of the fund.
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