State support to help overcome Covid-19 crisis should have been made wider as early as 2020, said Bank of Latvia council member Andris Vilks.
“The biggest mistake Latvia committed last year was not providing sufficient support fast enough. The consequences of this are plain to see now. Covid-19 indexes are higher and people are unhappy,” said Vilks.
The Bank of Latvia council members also mentioned that state support should be more logical and focused.
“As of the end of January we had spent about EUR 1.3 billion on prevention of consequences from Covid-19. About 10% of this amount went to residents or businessmen in the form of grants. Their proportions are incomparable. That’s the reason for the uproar,” said Vilks.
According to him, the decision to pay EUR 500 per child is a sign of the government’s inability to provide support in a more focused manner.
“If the government is unable to support these groups using focused support, then there is no room to retreat. It’s as if helicopters are lined up and filled with money to fly out, apparently. It’s a sign of an inability to approach a problem objectively,” said Vilks.
He added that Latvia still had no system to refuse state support. USA is also unable to allocate support in a focused manner, but 15% of families there refuse support and 5% donate support money to charity.
Vilks also said Latvia needed to finally resolve the long-standing problems with social inequality and the relatively weak social support, not contribute to the state debt.
“While last year economic decline was 3.5% and budget deficit was about 5%, we could have made do with a bigger loan. This year, however, we can see the economy has potential to grow. We shouldn’t have to talk about a deficit that exceeds last year’s digits in a time when the economy is on a rise. We have long-standing problems with social inequality, relatively weakly focused social support. We should think about those, not expand our debts even more,” said Vilks. (BNN/Business World Magazine)
