Latvia Unitary state

Reforms

A large-scale territorial reform undertaken in 2009 ended in the elimination of districts and the merger of a large number of municipalities.

On 1 July 2009, a major territorial reform went into effect in Latvia. All 26 districts and 586 cities and municipalities existing at the time were replaced by 119 single-level local councils: 110 municipalities and 9 republican cities. The regional level was then reorganised – after abolishing the districts, the role of regional governments was transferred to planning regions, which are implementing the role of regional governments during the transition period. According to the legislation adopted, the central government must propose a new law on regional governments until 31 December 2013. Even if the old municipalities – towns and parishes– were kept as municipal divisions, the new entities are no longer local governments as such. The goal of this reform was to simplify the territorial organisation and to create stronger municipalities with broader powers and is not connected to the financial and economic crisis.

As a result of the economic and financial crisis, local governments have been able to discern a decline in revenues. Taken alongside the unfavourable economic situation, the municipalities’ share of personal income taxes decreased from 83 to 80%.

In addition to a monitoring mission carried out by the Council of Europe’s Congress of Local and Regional Authorities (CLRAE) in November 2010, this organization expressed its regret at the absence of regional governments in the country following the 2009 reform. The CLRAE recommendation therefore advocated for the transformation of the current planning regions into proper regional authorities in their own right.

Local self-government in Latvia:

The administrative territorial reform implemented in 2009 strengthened Latvian local governments and their political autonomy. Even so, the loss of revenue due to the economic crisis and the austerity measures introduced must be monitored in order to ensure that it does not endanger municipalities’ capacity for action.

KEY REFORMS

• 2006: creation of planning regions by the law on regional development.
• 2009: major local government reforms:
  • Abolition of districts
  • Merger of many municipalities
  • Cut in the proportion of income tax paid to local governments