Valka Municipality Launches Financial Stabilisation Process

The municipality of Valka in Latvia has decided to begin a financial stabilisation process because it is no longer able to settle its payments to creditors on time. The news portal LSM has published an explainer on what the process involves.

Highest debt burden in the country

According to the Ministry of Finance, Valka has the highest debt burden among all local governments.

Unlike a private company

If a private company ended up in such a situation, its management would have to look for ways to repay its obligations or even consider liquidating the firm. A local government cannot go bankrupt, so Valka has chosen another route and started the financial stabilisation process.

LSM sets out in its analysis what exactly this process entails.