RIGA, March 9 (Reuters) - Latvia needs to agree budget cuts and get permission to widen its budget deficit from all its international donors or it faces the risk of running out of money in June, the prime minister-designate warned on Monday.
Under a 7.5 billion euro rescue led by the International Monetary Fund (IMF) last year, Latvia was to keep its budget deficit to within 5 percent of gross domestic product this year. But the new government wants to raise it to 7 percent.
"All the international lenders have to agree (to a rise in the budget deficit)," Prime Minister-designate Valdis Dombrovskis was quoted by Baltic news agency BNS as saying after meeting the parties which intend to join his new government.
"There will not be a situation where one lender continues to lend, but the other does not agree. We need an agreement with the IMF and with the European Commission," he said, referring to the main donors in the 7.5 billion euro rescue.
He spoke after he and the other parties tried to find ways to cut spending and raise incomes. Speaking on national radio, he said the measures would be painful.
"The social impact (of the measures agreed by the coalition) will of course be very unpleasant, but even more unpleasant would be not getting any more international financing and the Treasury runs out of money in June," he added.
The finance minister in the outgoing government has also said Latvia has enough money until June.
A spokeswoman for Dombrovskis' New Era party said he hoped to get final agreement for the necessary budget cuts from the parties on Tuesday. A parliament vote to confirm the Dombrovskis government in office is due on Thursday.
He is forming a government from the four parties in the old coalition, which collapsed as a result of the economic crisis, as well as New Era and a smaller centre-right group. (Reporting by Patrick Lannin; editing by Stephen Nisbet)