The government and the Ministry of Finance do not support the allocation of emergency funding to the Valka region, despite rising debts and payment delays. The Ministry of Finance believes that the municipality should address its problems through reforms and the postponement of loan payments.
The financial problems of the Valka region continue to worsen; however, the municipality is unlikely to receive additional funds from the state budget.
Finance Minister Arvils Aseradens stated at a government meeting that the situation in Valka is "unpleasant and complicated," but allocating money from emergency funds would contradict existing regulations.
According to the Ministry of Finance, the municipality has been delaying payments to creditors for a long time, falling behind on tax payments, and is forced to regularly negotiate with the State Revenue Service to extend payment deadlines.
The problems in the region, as acknowledged by the authorities, have accumulated gradually.
One of the main reasons for the crisis, according to the Ministry of Finance, is the situation with heating and water supply—tariffs do not cover the actual costs of providing services, and the municipality effectively compensates for the difference.
The ministry also indicated that in 2025, the situation temporarily improved after the sale of a boiler house; however, this did not resolve the structural problems.
Currently, Valka is urgently lacking nearly 371,000 euros, according to the Ministry of Finance, as reported by Diena.
Instead of direct financial assistance, the ministry suggests that the municipality alleviate the situation by postponing payments on state loans to a later date.
Importantly, despite the severe financial situation, the Ministry of Finance does not believe that Valka is in a worse income situation than other municipalities in the country.
According to forecasts, the region's income after the financial equalization system will grow by only 1% in 2026—one of the lowest figures among municipalities in Latvia.
An additional problem remains the debts of residents for heating and water supply. Their total amount has already exceeded one million euros.
However, the chairman of the Valka Regional Council, Vents Armands Krauklis, stated that a significant portion of these debts was incurred many years ago and is practically difficult to collect.
Krauklis also criticized the Ministry of Finance's assessment and reminded that during the administrative-territorial reform, experts warned about the weak financial sustainability of such a region.
According to him, Valka initially proposed a different model for merging municipalities, but this option was not supported.
In fact, the situation in Valka has become one of the most notable examples of how small municipalities face rising expenses, residents' debts, and limited budgetary capabilities.
After the crisis in Rezekne, Valka became the second municipality whose financial situation is being discussed at the government level.
