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Latvia's Fiscal Discipline Council, led by Jānis Priede, indicates that the country can manage a budget deficit above 3% temporarily due to rising defense expenditures, supported by the EU's exception clause until 2028. However, Priede warns that long-term fiscal stability will depend on reassessing public service expenditures and fostering economic growth.

The Council acknowledges current compliance with budget requirements but raises concerns about sustainability beyond 2028. Discussions are ongoing regarding potential spending reductions and the efficiency of state functions, emphasizing the need for careful evaluation of public services and their funding.