Skip to main content
Reform Support
© EU

Supporting reforms to ensure efficient and effective revenue administration and public financial management

Funding Programme
  • 2020

Support for the Latvian fiscal discipline council

The Commission supported the Latvian Fiscal Discipline Council in making an independent evaluation of its performance. It also helped to upgrade its macrofiscal forecasting tools. The project aimed to inform the strategy and work plans of the Fiscal Discipline Council and improve the quality of its forecasts. The technical support focused on:

  • reviewing the context, inputs, outputs and impact of the work of the Fiscal Discipline Council;
  • upgrading the tools and methodologies used to calculate and forecast the output gap, the structural balance and the fiscal effort.

The project contributed to improving the independent oversight of Latvian fiscal policy.


More information about the project results


On 7 September the Commission has published the results of the independent review of the Latvian fiscal system.
Fiscal rules and independent fiscal institutions are integral elements of a sound fiscal policy, as indicated in the EU fiscal framework. That is why the European Commission has supported Latvia through the Structural Reform Support Programme (SRSP) in reviewing the functioning of its Independent Fiscal Institution (IFI), the “Latvian Fiscal Discipline Council” (FDC).

The results of the final review have been presented during a virtual event that gathered several institutions (OECD, Fiscal Council representatives, European Commission staff and experts on IFIs).

Carried-out in cooperation with the OECD as the implementing partner, the EU-funded review has produced an evaluation of the performance and functioning of the Latvian Fiscal Council. It also included recommendations to enhance accountability, sustainability and transparency of Latvia’s fiscal policy. The review focused on the mandate and on the obligations of the FDC, as a result of the EU fiscal framework. In particular, the latest EU fiscal framework has strengthened the role of national IFIs (“fiscal watchdogs”) through their analysis, assessments, and recommendations in the area of fiscal policy leading to increased accountability of policymakers and improved fiscal transparency as well as contributing to the sustainability of public finances.

According to this EU funded review the methodologies are transparent and the FDC is an independent and non-partisan institution.

The review has recommended to:

  • Further develop modelling and analytical capabilities on fiscal matters in Latvia;
  • Reduce the frequency of monitoring reports and focus more on strategic medium- and long-term fiscal issues;
  • To commit to a regular schedule for publishing long-term fiscal sustainability analysis.

To increase the level of independence, the review also recommends to amend the Fiscal Discipline Law in order to provide the FDC with a “ secretary and staff” with a dedicated multi-year budget.

The impact of the FDC could increase by making its reports more accessible and engaging for non-technical stakeholders. Finally, to assist legislators in assessing Latvia’s progress towards its fiscal objectives, the FDC should strengthen its relations with the Parliament, specifically with the Budget and Finance (Taxation) Committee and the European Affairs Committee.

Read the OECD review here