Supplementary Memorandum of Understanding between the European Community and the Republic of Latvia of 13 July 2009 and Sub-paragraph 5.2 of the Economic Stabilisation and Growth Revival Programme for Latvia adopted by the Saeima on 16 June 2009, inter alia the measures pertaining to the reduction of pension disbursements, are to be characterised as an action of the State with the aim to reduce the budget expenditures and, consequently, to be eligible for the international loan. The Cabinet of Ministers has indicated that during the negotiations the international creditors repeatedly took notice of the possibility that the sustainability of the social budget would be endangered even in the case of freezing the indexation of pensions. Yet, no evidence of this assertion – for instance, negotiation minutes – have been submitted to the Constitutional Court. It follows from the previous IMF reports that the sustainability of the social budget is endangered and the fiscal risk is caused, for example, by the excessively generous parental allowances (children benefits) and the inconsiderately regulated sickness benefits; moreover, the outflow of large amounts of the social security funds to those social groups that cannot be deemed as disadvantaged or low-income is observable (see, e.g., Sub-paragraphs 4.22-4.27 of The World Bank report Aide Memoire, Case materials, vol. 9, pp. 105f). Besides, the principle of separation of powers delimits the authority of the Cabinet of Ministers. In accordance with this principle, the Constitution confers the lawmaking powers – namely, the powers to decide the most important matters for the state – to the Saeima in particular, and, in individual cases, to full-fledged citizens of the Republic of Latvia. The other branches of power are obliged to implement these laws in practice (cf. Paragraph 1 of the Concluding Part of the Constitutional Court Judgment in the Case No. 03-05(99) passed on 1 October 1999). Determining the relations of the areas of authority of the Saeima and the Cabinet of Ministers, it was admitted that the requirement for the legislator to decide by itself all the matters of the State through legislation has become unrealistic in the complicated living conditions of the present-day society. In order to ensure that the State power be exercised more effectively, it is permissible to deviate from the requirement that the legislator decides all the matters wholly by itself. The optimum effectiveness is achieved when the legislator decides the most important matters through legislation, while delegating to the Cabinet of Ministers the drafting of more detailed regulations 48