In early September, all deputies of the Valk municipality received a letter from the Ministry of Finance stating that the region is unable to balance the budget cash flow for 2026 and fully meet its obligations to creditors. As a result, the issue of initiating the financial stabilization process should be discussed at the next council meeting. The financial stabilization process is intended for municipalities that find themselves in an extremely difficult financial situation to ensure the fulfillment of legally mandated municipal functions. According to the De facto program, the financial problems of the Valk region have been discussed for several years. Back in May, the Cabinet of Ministers allowed the municipality to defer some loan payments to future years, while simultaneously requiring the submission of a revised budget and a financial restructuring plan. Additionally, the government instructed the State Audit Office to conduct an in-depth review of the financing of heating and water supply systems in Valk. The results of the audit are expected to be ready no earlier than the end of October. According to De facto, all summer long, disagreements persisted between the Valk municipality and the Ministry of Finance; however, the financial situation of the municipality did not improve. At the council meeting on September 9, opposition representatives stated that they only learned about such a serious situation after receiving the ministry's letter. For its part, the municipality's leadership rejects the Ministry of Finance's conclusions. The mayor of Valk explains the discrepancies by claiming that the ministry allegedly uses inaccurate data, while representatives of the ruling Vidzeme party link the situation to the political climate ahead of the elections. The opposition, in turn, asserts that the decision to initiate the financial stabilization process is being postponed for political reasons.
