5. The Summoned party – the Ministry of Finance – maintained that, in
conformity with Article 34, Paragraph Two of the Law on Budget and Financial
Management, the executors of the State budget, in case of the special budget – the
State Social Insurance Agency (hereinafter – SSIA) – have the rights to enter into an
agreement with the State Treasury concerning investment of the surplus balance of the
special budget as a deposit as well as to invest this balance in the Latvian State
securities. In accordance with the agreements signed with the SSIA and the State
Treasury and within the term specified in these agreements, interest income from term
deposits of the surplus balance of the special budget and income from utilization of the
positive accounts balance of the special budget are transferred to the accounts of social
insurance special budget and diverted to cover the costs in accordance with the Law on
the State Budget for the current year. State social insurance special budget funds are
placed in the State Treasury according to the rates of financial market.
The Ministry of Finance drew attention of the Constitutional Court to the fact
that the State budget fulfillment indices, including the amounts of revenues,
expenditures and financed deficit of the State special budget as well as the source of
financing this deficit, are established in the annual State Budget Law and are not
related to the actual balance of funds of the joint budget accounts of the State Treasury
in the Bank of Latvia.
The draft Disbursement Law has been prepared by the Ministry of Welfare;
therefore, the Ministry of Finance cannot provide detailed information concerning
alternative solutions, calculations of social budget economy included in the draft law
annotation as well as information about consultations with experts.
The Ministry informed that, for the eight months of 2009, the debt of taxpayers
to the State social insurance budget was LVL 108 million, i.e. by LVL 32.9 million or
43.6 percent higher than in the same period of 2008.
It was also maintained that, due to the level of credit rating of the State, the
possibilities to borrow money in financial markets were limited. Therefore
international loans are the main source for financing the budget deficit. The received
loans made it possible both to increase the volume of emission of State internal
borrowing securities, thus providing the financing necessary for the fulfillment of the
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