1. Fiscal discipline benefit management Dace Kalsone, Dr.oec., LL.M. Fiscal discipline council secretary 64th Meeting of Directors General of the European Public Administration Network Riga, 11 June 2015

2. Agenda Benefit management: crash course From the euro introduction project to continuous fiscal discipline Fiscal council benefits Fiscal discipline benefits

3. Benefit management importance(1/3) Benefit can be both quantitative and qualitative Benefit management consists of 3 main activities: 1 Benefit identification 2 Benefit management procedure development 3 Benefit transfer Why is it important? motivates to be responsible for changes ensures the provability of changes ensures common target for all stakeholders focuses on specific results proves return of investment Source: Dr.sc.ing. Renāte Strazdiņa, E&Y

4. Benefit management process(2/3) Identify benefits and indicators Create potential benefits longlist Link recommendations with benefits Agree on necessary indicators (quantitative or qualitative) for each sort of benefit Create benefit register Define base value to keep the track of progress Tracing procedure and management Identify benefit holders and agree on management procedures Finalise possible benefit qualification and file benefit register Establish monitoring procedure Overtaking benefits Identify quick-wins (benefits with immediate identification and fulfilment) Monitor changes Control benefit implementation Integrate benefits into everyday procedures Transfer benefit chain to the next benefit holder DiagnoseIdentifyDeliverCreateMaintain Source: Dr.sc.ing. Renāte Strazdiņa, E&Y

5. Benefit management principles(3/3) Source: Dr.sc.ing. Renāte Strazdiņa, E&Y Real and measurable Benefits are clearly classified and linked to the results Benefits are real and reachable Identified financial and non-financial benefits Benefits are measurable (if possible) Appointed the responsible executive Duties and obligations are facilitated with continuous benefit progress monitoring Benefits are gradually transferred from «monitoring phase» to the everyday activities Ensured regular monitoring and control Benefits associated with risks are identified and minimised Activities oriented towards benefit creation and safeguarding Sustainability of benefits based on the involvement of interested parties during the whole benefit management life- cycle

6. Agenda Benefit management: crash course From the euro introduction project to continuous fiscal discipline Fiscal council benefits Fiscal discipline benefits

7. Red lines of Maastricht criteria: o 60% public debt and o 3% budget deficit Fiscal discipline goes further: o Sustainable debt level* o Balanced budget Euro benefits include fiscal discipline * Let's talk about...public debt. European Parliament. 1/06/2015 http://europarltv.europa.eu/en/player.aspx?pid=933714b0-baad-42f3-b036-a4aa008c7e0f

8. Balanced budget theory -3% budget deficit, Maastricht red line 0% budget deficit -0,5% -1,0% if low debt Space for structural reforms deviation Source: EU Law on MTBF

9. Balanced budget practice (2013 EU MS) -3% budget deficit, Maastricht red line 0% budget deficit -0,5% -1,0% Source: EU Commission, 2015 http://ec.europa.eu/economy_finance/eu/forecasts/2015_spring_forecast_en.htm LV PT -1,5% -2,0% -2,5% ES IT FR IE UK NL BE DE CZ BG RO PL LT EEFI SE MT CY HU SK SI AT DK CR LU

10. Fiscal council – independent institute Institution acting under the Fiscal discipline law (Directive 2011/85) Monitors decisions that significantly impact fiscal development Provides an independent view on any issue concerning state finance In Latvia – since 1/01/2014

11. Fiscal council – independent institute

12. Fiscal discipline possible benefits Spending efficiency: zero-base budget every year! Positive communication: paying taxes is good! Sustainable budgeting principles: at home, at enterprise, at municipilaty, at state level

13. Thank You for Your attention! Your questions? www: http://fiscalcouncil.lvhttp://fiscalcouncil.lv Twitter: @Fiskalapadome@Fiskalapadome Facebook: fiskalapadomefiskalapadome